November 12,2009

Hu Shuli's Exit from Caijing: Mostly over Money

By CSC staff, Shanghai

The exit of editor Hu Shuli from Caijing, China's most successful and important financial magazine, has drawn a lot of buzz in both the domestic and national media, especially as she has been followed out the door by as many as 30 of the magazine's veteran journalists and 60 sales and marketing people. The exodus comes after the exposure of a long and bitter spat with the magazine's owner, HK-listed SEEC Media, led by Wang Boming, mostly over money.

 

The magazine already has a new team in place, and the first post-Hu trial issue has been published to the apparent satisfaction of Mr. Wang. The "new" magazine is expected to focus more on issues of finance and economics, which is what "caijing" means in Chinese, and less on Hu's insistence on digging up the political and corruption scandals that plague the nation.

 

Hu Shuli, who is about to take up the post as dean of Sun Yat-Sen (Zhongshan) University's new media and design school in Guangzhou, is also readying the launch of a new media venture, with a team largely from the ranks of Caijing loyal to her.

 

She and her team had been seeking a larger stake in Caijing Magazine, which is the cash cow of SEEC, which owns a variety of other magazines and websites, mostly money-losing, including the Chinese-licensed Sports Illustrated.

 

Hu also had ambitions in the web-based news wire service business. Her team launched caijing.com.cn, a high quality financial online publication in China. The venture has been burning money and exhausting its staff and needs more resources from SEEC, which reported over HK$40 million losses for the first six months. The team, with its increasingly greater contribution to the media group, has needed greater financial incentive.

 

It has been widely rumored in financial journalistic circles that Wang Boming had made a comfortable arrangement for Hu Shuli and the core members of her team, including Wang Shuo, Hu Shuli's editing arm and the former managing editor of Caijng. Mr. Wang Boming registered a company for a few of Hu's core team members holding interest in Caijing, and Hu's annual income has been at the top among editors in China: over 1 million yuan a year.

 

The salaries for Caijing's journalists, however, have been notoriously low. Its young and talented reporters based in Beijing and Shanghai earn less than their competitors and feel even poorer given the soaring house prices, and many of them have had to leave the publication after working for a few years. The turnover of journalist talent has been high.

 

Caijing has been hailed as an independent and pioneering journalistic enterprise in China, politically and financially. But Hu's fight against the system has always been uphill. Any news publication in China must be affiliated with a bureau-level government department or government sponsored institution. When the publication is making "trouble," the party propaganda authority will call on the government supervisor, which has the power, nominally, to punish the trouble makers.

 

Hu's new venture, including a weekly that still needs to be registered and approved by the government, reportedly will be affiliated to Zhejiang Newspaper Group, flagshipped by Zhejiang Daily, the party organ of Zhejiang province. This is to be joined by a company capitalized with 1 million yuan owned by Hu and her team, taking control of about 30% of the shares, along with a few investors, including Hopu Fund, led by Fang Fenglei, the legendary investment banker-turned PE player. Goldman Sachs has US$300 million tied up in Hopu.  Liu Chuanzhi, the chairman of the Lenovo Group, and reportedly CITIC are among other potential investors.

 

Caijing under Hu has spoken in Beijing for those interested in "capitalism with Chinese characteristics": financial regulatory departments, state-owned banks, financial and investment institutions. The magazine also befriended international bankers that sometimes incurred nationalistic reactions from local media, especially amidst the financial crisis.

 

Many in China believe Hu has played her cards well in maneuvering and balancing between the different interest groups inside the government and party system, between Beijing and local governments. Time will tell.  

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