China announces new rules for foreign financial media

The rules drop a requirement that foreign providers must work through a Chinese agent and reduces the amount of information they must disclose about their operations.

Beijing agreed to the changes in November to end a World Trade Organization complaint that it improperly helped the state-run Xinhua News Agency compete to supply financial data to banks, brokerages and other clients. Trade officials said the settlement would help Thomson Reuters Corp., Bloomberg LP and Dow Jones & Co.

Xinhua was replaced as the industry regulator in February with a Cabinet body, the State Council Information Office, after complaints that Xinhua should not be allowed to regulate its competitors.

Foreign providers that already operate in China must apply to the new regulator by July 1 for permission to continue, said a Cabinet statement. It said the regulator has the power to reject applications but gave no grounds on which permission might be refused.

Foreign governments and business groups complain that Chinese authorities sometimes misuse regulatory decisions to protect domestic companies from competition.

The American Embassy in Beijing referred questions to the U.S. Trade Representative's office in Washington. A spokesman for the European Union mission in Beijing said it had no immediate comment. Spokespeople for Thomson Reuters, Bloomberg and Dow Jones did not immediately respond to requests for comment.

China and its trading partners have wrangled over access to its market for financial information since 2006, when the government began requiring foreign providers to funnel data through Xinhua to banks, securities firms and other clients.

Washington and other governments complained that arrangement curbed access to the Chinese market. Beijing promised when it joined the World Trade Organization in 2001 not to close markets that it already had opened.

Foreign providers will be required to give the Cabinet office details of products, according to the regulations. It said the office would keep confidential any business secrets. That was a condition of November's settlement after companies resisted providing information to Xinhua, a potential competitor.

Xinhua, best known as the mouthpiece of the ruling Communist Party, is trying to transform itself into a competitive, profitable company but has had only limited success.

It began competing with foreign financial information providers in 2007 with the launch of its own service, “Xinhua 08.” The agency's president expressed hope it would overtake Western companies in the financial information sector.

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