China agrees to loosen controls on news providers
By BRADLEY S. KLAPPER,Associated Press Writer AP - Friday, November 14
GENEVA - China has agreed to loosen controls on financial news providers in an out-of-court settlement of a dispute with the United States, the European Union and Canada.
China, which has since 2006 required foreign news companies to funnel their data through the state's own agency, will set up an independent regulator next year to create a level playing field for financial information providers.
Calling it a "landmark agreement," Brussels said companies such as Thomson Reuters Corp., Bloomberg LP and Dow Jones & Co. would benefit from better conditions for the sale of financial information to banks, government agencies and other customers in China.
The Chinese mission confirmed that a settlement was signed Thursday in Geneva.
U.S. Trade Representative Susan Schwab said China's commitment to establishing an independent regulator in the sector was especially important.
The U.S. and EU filed a World Trade Organization case against China in March demanding that it loosen restraints on foreign companies vying for a greater slice of the country's lucrative market for financial information. Canada made its complaint shortly after.
They said China violated its free-trade pledges by imposing rules two years ago that boost its Xinhua News Agency at the expense of foreign financial information providers by making Xinhua _ the ruling Communist Party's mouthpiece _ both a competitor and regulator to its rivals.
"I am very pleased we have been able to sign an agreement with China today to allow financial information suppliers like Bloomberg, Dow Jones and Thomson Reuters to operate in China free of unfair restrictions that threatened to place them at a serious competitive disadvantage," Schwab said. "The independence of the regulator is critical to ensuring a legal environment that is free of damaging potential conflicts of interest."
Washington said the agreement forces China to designate an independent regulator to replace Xinhua, and no longer requires foreign firms to do business in China through a local agent.
"This is critical to providing a level playing field for our businesses in China," the Office of the U.S. Trade Representative said in a statement.
The EU said China has agreed to install the new regulator by June, and will ensure that confidential information is not misused.
Xinhua has had limited success turning itself into a competitive, profitable media company. It went into direct competition with foreign financial information providers last year by launching its own service and its president has expressed hope that the so-called "Xinhua 08" will start overtaking Western companies in the financial information sector.
Chinese regulations announced in 2006 required foreign companies to funnel data, videos and photos through Xinhua-approved distributors. The only approved distributor had been a Xinhua subsidiary.
Under the terms of its 2001 WTO entry, China undertook not to close markets that it already had opened.
China's rules also formalized restrictions on The Associated Press and other foreign agencies, which had sought wider access to its market, especially ahead of the Beijing Olympics in August.
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