No time to comment in any detail, but an article worth a look from the Washington Post's Philip Pan:
Leading Publication Shut Down In China
Government Move Part Of Wider Crackdown

By Philip P. Pan

BEIJING, Jan. 24 -- China's ruling Communist Party on Tuesday suspended one of the premier publications in Chinese journalism, escalating a campaign to rein in the state media, part of the government's toughest crackdown on freedom of expression here in more than a decade.

The decision to shut down Freezing Point, a four-page weekly feature section of the state-run China Youth Daily that often tested the censors and challenged the party line, came less than a month after the authorities replaced the top editors of another daring newspaper, the Beijing News.

The China Youth Daily is the official newspaper of the Communist Youth League, a power base for President Hu Jintao. Because any move to punish it would almost certainly require his approval, the decision to close Freezing Point was seen as further evidence of Hu's personal support for a tightening of controls on the media that began two years ago, about a year after Hu took office.
The article recalls Freezing Point editor Li Datong's previous rail against one of the spookier episodes in China media management, a plan at parent publication China Youth Daily to provide financial incentives for journalists who's stories reaped the approval of cadres:

Reached by telephone, Li said that it was inconvenient to discuss what happened in detail but that he planned to write an essay to fight the decision. He said propaganda officials issued a notice criticizing him and the newspaper's editor in chief by name and ordering the section closed until it is "rectified and fully recognizes and corrects its mistakes."

Li, a party member and veteran journalist, stunned the propaganda authorities last summer with a lengthy letter attacking a plan to award bonuses to reporters at the newspaper who had won praise from government officials while deducting pay from reporters whose articles were criticized by officials. After the letter was leaked, the newspaper scrapped the bonus plan.

Can you imagine a scheme by which American newspapers financially rewarded journalists for writing stories that received the official blessings of the administration? I should hope newspaper offices would burn if that happened. (Not that American news organizations are immune to ideology, of course. They're not. But it seems their motivations are more prosaic, such as reaching a specific audience or satisfying an owner's politics.) But here in China the regression proceeds apace, and Party publications are certainly not immune. As generally heartened as I am by the range and liveliness of Chinese media and the energy and intelligence of the Chinese journalists I meet, every story like this is depressing. More in the full article.

Update: Via China Digital Times, the New York Times coverage.