Editor's note: "Cracks in the Wall" is an ongoing series about the challenges facing China's economy.
WENZHOU, China — There’s only one place to go to get the gossip on Wenzhou: Wikileaks — the local version, that is.
For years, this isolated coastal city has had its own heavily trafficked gossip website that has also become a valuable leaking ground for whistleblowers.
So naturally, when Wenzhou’s private credit market turned sour and started making international headlines, Wenzhou's Wikileaks was in a perfect position to chronicle the collapse, bit by juicy bit.
China’s most highly publicized credit collapse didn’t just blow up overnight this fall. The real story of Wenzhou’s incremental meltdown, and how it became public fodder for China and the rest of the world, is far more surprising.
Wild tales of the ruin of China’s microcosm of private lending and credit crunch — from “runaway bosses” to abandoned luxury cars, and rumored suicides to local mob hit lists — have leaked out since this spring on the site “703804.” The name, when spoken in the Wenzhou dialect, sounds something like “chitchat.”
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The site has played host to just about every dramatic detail of the credit collapse; some of it very true, though much of it speculation. It has also become an essential tip sheet in tracing what went wrong with Wenzhou’s private lending system and has provided essential insight into how locals are dealing with it.
Much of the credible information appears to come from inside sources who have posted anonymously. Many of the stories are repeated nearly word-for-word in newspapers and other media across China, eventually making their way into international news reports.
For example, there is a throwaway line in every story on Wenzhou referring to the 80 factory bosses who’ve fled the region or gone bankrupt. That morsel of information comes directly from a 33-page ongoing “runaway bosses” thread on the forum, where readers add names and financial details daily.
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Wenzhou native Ye Zhe, who does not consider himself China’s Julian Assange, helped start the forum as a gossip site in 2004, for fun. Since then, the chat site has grown into a formidable and credible source, thanks largely to whoever is leaking the most dependable information.
Ye, who works by day for the local government, says sources post on the site because they know they will reach the largest possible audience. But Ye says he doesn’t know who they are.
The site, which now employs several full-time staffers, gets about 1.2 million hits per day.
Ye says the website has been shut down at least 100 times by local censors, but each time he just moves the server and carries on, letting posters upload information, rumors and their own opinions on local matters of importance.
Somehow, censors seem to have grown more tolerant as the site gained traffic and a solid reputation — in contradiction to earlier predictions about 703804’s fate. Instead of facing more threats and pressure, Ye said officials have left him alone.
“Back in 2004-2005, they were much less tolerant with us,” said Ye. “The government was a little blind and scared, thinking public opinion should be in their hands. Eventually they figured out it would be better to guide it than block it.”
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A few things may keep the website from serious trouble. For starters, it deals only in Wenzhou information, not matters related to the central government.
Secondly, Ye says, the site is not media or journalism. It’s a non-profit business that, much like a micro-blogging service, simply allows users to upload their own knowledge and opinions. As such, it’s been less constrained in covering the crisis than local media.
Family and romance sections of 703804 have their own traffic, but of course over the past few months, the “finance” tab has been the website’s hot button as locals and Chinese people from around the world tune in to watch the private credit market meltdown.
The site first gained fame for posting accurate information during a deadly fire in 2007, when 21 people were killed. Later, leakers to the site started exposing local government corruption and posting photos that have embarrassed officials and led to action.
In interviews with China’s official media, Wenzhou residents have joked about government employees checking the site every morning to make sure they aren’t on it.