It is called Code 204. Editors at Bloomberg News append it to an article to ensure that it does not appear on Bloomberg financial data and news terminals in mainland China. Little known outside Bloomberg, the system has been in place for more than two years, and it is used regularly to keep articles on Chinese politics and social issues away from the eyes of powerful people in China who might be offended, Bloomberg employees say.
That coding is just one way that Bloomberg tries to navigate delicate issues of Chinese control of foreign news media operations here. The fact that Bloomberg L.P., the parent company and one of the world’s largest and wealthiest news organizations, sells terminals in China that publish both financial data and news articles means that Bloomberg is more than just a news-gathering agency. It is also a news distributor. And that makes Bloomberg’s relationship with the government and Communist Party especially complicated.
The Chinese government closely monitors the use of financial data terminals, a market dominated by Bloomberg and Thomson Reuters that has been the subject of political and commercial tension in China for two decades.
Worldwide, Bloomberg’s terminals are the main revenue generator for the parent company, which also operates a website and a television network. In China, Bloomberg takes a
more cautious approach to disseminating news on the terminals than on any other outlet, which explains Code 204.
“A lot of people rationalize it and say it’s not self-censorship,” one employee said. “I disagree with them.”
Ty Trippet, a Bloomberg spokesman, declined to comment.
That coding was used well before news reports about accusations that Bloomberg suppressed other articles on China emerged last week. An article in The New York Times quoted unnamed Bloomberg employees as saying that Matthew Winkler, the longtime editor in chief, indicated that he had decided not to publish two investigative articles by reporters in the Hong Kong bureau that looked at ties among Chinese tycoons, the families of political leaders and foreign banks. The Financial Times and Next Media Animation have also independently reported details of the story.
In a conference call with four journalists in Hong Kong on Oct. 29, Mr. Winkler defended his decision to withhold one of the articles by arguing that Bloomberg would be expelled from China if the article were published, employees said.
Mr. Winkler said in an email last Friday that the articles from Hong Kong “are active and not spiked.” He declined to comment on the conference call.
Bloomberg incurred the wrath of the Communist Party after it published an investigative article in June 2012 on the family wealth of Xi Jinping, the new party chief. Sales in China of Bloomberg terminal subscriptions, which cost more than $20,000 per year, slowed afterward. Chinese officials had ordered some state enterprises not to subscribe, apparently in retaliation. Bloomberg’s website has been blocked on Chinese servers since, and its news bureaus on the mainland have been unable to obtain residency visas for new journalists.
Terminal sales in China are believed to make up only a fraction of Bloomberg’s global revenues, but the company would like to increase that. Bloomberg also worries about preserving its ability to gather news and financial information in China for global subscribers who buy its terminals to track commerce in the world’s second-largest economy. Since publication of the Xi article, Bloomberg journalists have sometimes been denied access to news conferences in China, so they lag behind their competitors in issuing alerts on their terminals — in a business in which a few seconds can determine the success of a trade.
For years, Bloomberg has been careful about the news it distributes on its terminals in mainland China. Senior Bloomberg managers added Code 204 to the editing system in early 2011, around the time that Chinese officials were growing anxious over calls for Chinese citizens to start a Jasmine Revolution, which never materialized. Editors routinely apply Code 204 to coverage of Chinese politics and general news, not just investigative blockbusters. “It’s very loosely applied,” one person said. Some editors justify Code 204 by arguing that the Chinese government allows Bloomberg to publish only financial news and data on the terminals, not political articles or other information, employees said.
“Their rationale is that we’re operating under the laws of mainland China,” said one employee, who, like others at Bloomberg, spoke on the condition of anonymity for fear of being fired. The employee added that those editors defending Code 204 say Bloomberg has a license that allows the terminals to offer what is “narrowly defined as economic news.”
Like Thomson Reuters, Bloomberg has official permits from China to distribute financial information and report on a range of topics, employees said. A license from the State Council Information Office allows Bloomberg to disseminate financial information to terminal subscribers. Separately, the Foreign Ministry accredits Bloomberg’s news bureaus and journalists in China.
A central question for Bloomberg editors, then, is whether some stories written by the news bureaus should be kept off the terminals to conform with a rigid definition of the state council license. Some inside Bloomberg argue that many stories classified as Code 204 could actually be distributed on the terminals under the license because they contain information important for doing business. For example, articles about political figures and their family backgrounds or financial ties provide information that can be useful to the businesses that subscribe to the terminals.
Editors append Code 204 case by case. Those with the power to apply codes and route articles are said to be “turned on.”
But this kind of self-regulation has failed to keep Bloomberg out of trouble in China, as the fallout from the Xi family wealth article has shown.
Several current and former employees of Reuters said they were unaware of any similar function on the Reuters financial data software platform. Subscribers to a comprehensive Reuters terminal plan in China can see raw financial data as well as all the articles that appear on the Reuters news wire, which also has a Chinese-language service, employees said.
Wang Feng, the former editor of the Chinese-language service and now online editor of The South China Morning Post, a Hong Kong newspaper, said he recently discussed with former Reuters colleagues whether news articles could be coded to keep them off the Reuters terminals in mainland China. “It technically would not even have been possible to do that at Reuters,” he said.
A Reuters spokeswoman, Barb Burg, declined to comment.
Since the 1990s, the Chinese government has had an uneasy relationship with foreign financial data services, for both ideological and commercial reasons. In 1996, Xinhua, the state news agency, tried to monopolize the business by controlling or driving out Reuters and Dow Jones, then the two dominant data providers. (Bloomberg had only a small China presence then.) Reuters and Dow Jones waged an international lobbying campaign that forced Xinhua to back off in 1997, according to James McGregor, a business executive and former journalist who ran Dow Jones in China at the time. Xinhua and the Chinese government tried the same thing in 2006, but backed down after the United States and the European Union filed a complaint with the World Trade Organization.
In an interview, Mr. McGregor said the foreign financial data companies did have leverage over China and could fight intimidation, since Chinese businesses rely on the terminals for day-to-day — even second-to-second — transactions. “I think it’s impossible to push Bloomberg off the table here because they have a robust and important offering to Chinese traders, and Chinese traders want to be part of the global market,” he said.
Similarly, news agencies have some leverage, despite the visa denials and threats, he added. “Does China really not want news coverage?” he said. “China’s part of the world, and they have to be part of the news world.”