A recent addition to the global discourse of China's interaction with developing countries has been the claim that the Chinese government exports prison labour to these countries. While no evidence is ever presented to support this claim, it has been widely circulated in international and local media, as well as on the internet. This article examines the origins of the rumour and the mechanisms of its transmission. It shows that while the rumour often originates at the grass roots in developing countries, it is promoted locally and globally by political, economic and media elites with distinct agendas that often involve building support for opposition parties, competition in obtaining contracts, or geo-strategic and ideological rivalry. We analyse the rumour's circulation in light of the larger discourse on China and developing countries, and discuss why Chinese official responses to the claim have proved to be ineffective.