The confession by a handcuffed Chen Yongzhou came three days after his newspaper, New Express, published a front-page appeal for his release, The Wall Street Journal reported.
Chen said a third party, who was not named, had written the stories that alleged Zoomlion Heavy Industry Science and Technology had falsified its accounts.
Zoomlion is partially owned by the government of Hunan province.
Chen has written a series of stories over the past year accusing the construction equipment maker of inflating profits and other accounting irregularities.
Zoomlion denied any irregular accounting practices after a report by Chen in May caused trading in its stock to be temporarily suspended in Hong Kong.
The New Express said Wednesday it had found only one small mistake in 15 stories Chen had written about Zoomlion.