Media bias in China – Summary

Submitted by: Reading group 3

This study investigates that how competition in the market influenced the partisan biasness of
state-owned newspapers in China from 1981 to 2011. Because of the propaganda and
suppression of negative news, Chinese media is considered as politically biased. It needs to be
examined to what extent and why does the media diverge from the partisan bias forced by the
leader. In China, all general-interest newspapers are owned and controlled by the political parties
such as the Chinese Communist Party Committees (CCPCs). It is questioned about the politico-
economic trade-off in the Chinese Media and see whether economic prosperity be accomplished
without damaging the political goals of the leader. However, competition arises among the
newspaper owners who want to earn profit and have different values for media bias.
This study measures the political bias of newspapers and assess the underlying impacts of
competition on this bias, and gives indication on how market structure interplays with politics
to influence media bias and analyze the economic and social factors that influence content
allocation in the media and readers ‘exposure to media bias.
General-interest newspapers includes Party papers and Commercial papers. Two datasets have
been used. First, use the content of 117 general- interest newspapers published in urban areas of
China from 1999 to 2010. This database is provided by WiseNews, which contains the largest
amount of digital content of Chinese newspapers during the sample period. Second, a
comprehensive directory of around 1,000 general- interest Chinese newspapers from 1981 to
2011.
Media bias measure captures the main traits of news content that indicates the newspaper’s
loyalty to the Chinese Communist Party (CCP) journalism on one side and the extent to which it
provides to a general audience on another side. Newspaper’s coverage focuses on nine topics
capturing (i) spokesperson coverage (discussions on political leaders or citations of the CCP’s
authoritative news agency), (ii) politically sensitive or negative information (broadcasting
corruption, calamities, and mishaps and controversial issues), and (iii) commercially oriented
content (crime, sports, and entertainment).
To generate a single-dimensional measure of media bias, principal component analysis (PCA)
was used to consolidate the nine types of content above. At the provincial level, the resultant bias
index is positively correlated with the intensity of internet censorship. At the individual
newspaper level, a clear model of product differentiation occurs: some newspapers concentrate
on propaganda content, while some focus on commercial content. The bias index exhibits a
strong positive correlation with the newspaper being a Party paper and a strong negative
correlation with advertising revenue.
This paper proposes that advertisers are elastic to politically biased content. In a state where
there is freedom of media, an elastic demand will persuade competing media to accommodate to
the audience’s preferences, thus controlling the impact of political forces. In China, one political
approach is to lessen the tension between political and economic goals through product
differentiation. A CCPC can produce one highly biased Party paper that entirely stresses on
political goals and one less-biased commercial paper that mainly concentrates on economic
goals. Lowering the bias of the Party paper rises its audience at the cost of commercial paper but
has no impact on the CCPC’s aggregate profits. In the Meantime, lowering the bias of the
commercial paper does not inculcate a large political cost because the readers of the Party paper
are not influenced by the bias reduction. The presence of a commercial paper completely reduces
the Party paper of economic concerns, and the presence of the Party paper reduces the
commercial paper’s political concerns. Such a strategy is like the market-segmentation strategy
employed by profit-maximizing firms to extract the surplus from consumers who vary in their
willingness to pay for different brands or quality. CCPC introduces another competing paper
whose bias is located between Party and commercial papers. Lowering the Party paper’s bias
will steal audience from the competing paper and thus increase the owner’s aggregate profits.
Consequently, the Party paper will consider both political and economic goals; its owner’s
incentive to differentiate products decreases.
Lower-level newspapers are less biased, these county Party Dailies were likely to be less (or
more) biased than the prefectural Party (or commercial) papers. Using a difference-in-differences
approach, it is found that these lower-level Party papers significantly increased the
differentiation in the political bias of the higher-level Party and commercial papers. The results
show that competition significantly influences the political bias of the media in China. The
newspapers owned by lower-level CCPCs damage the political goals of higher-level CCPCs’
strategy of control through product differentiation. The entry of a commercial paper incurs a
political cost by decreasing the readers of Party paper and consequently attain its propaganda.
Lower-level CCPC does not care much about the political cost of reduced bias exposure because
it has geographic spillovers that are not entirely internalized by the lower-level CCPC. Thus,
CCPCs acts as a driving force to reduce Chinese readers’ exposure to political bias. Economic
prosperity cannot be achieved without conflicting with political goals.
This study analyzes the politico-economic trade-off in Chinese newspapers, demonstrating that
economic development and the market competition plays an important role in shaping media bias
and contributes to the study of market structure and media bias. It shows that media ownership
can alter the effects of market competition on media bias through product differentiation and
emphasize that competition between local governments in a decentralized or federalist system
can restrict the supply of media bias. Two main results emerge. First, the size of advertising
markets is positively associated with the number of newspapers and imply that growth in
advertising markets may have reduced readers’ exposure to media bias. Second, the political
valuation of media bias is associated positively with the entry of prefectural Party papers and
negatively with the entry of prefectural commercial papers.