With the rapid growth of the number of netizens in China, the Internet has become one of the most important parts in the lives of people who not only can get more information on the Internet, but can also express their own views. In other words, the Internet has also become a part of real-world events. Drawing on a case study about "The Boycott of Carrefour" in China during the spring of 2008, the paper first discusses the role and functions of new media during the incident. Through analyses of a story about the culture of labeling others and a conflict between burning a wrong flag in this case, the paper then explores the capriciousness of Chinese cyberspace. The author proposes an explanation on how the illusion of truth is generated on the Internet and then influences the events in the real world. The paper concludes that the Internet is not just a simple technological tool, but it is intertwined with the sociocultural contexts in which it is rooted.