Move against China's control over global financial information business
Tuesday, 11 March 2008
Mure Dickie
CHINA'S commerce ministry has reacted in unusually mild fashion to a World Trade Organisation action brought by the European Union and US over Beijing's regulation of financial news and information.
Washington and Brussels last week began WTO proceedings over 2006 rules that effectively put the Chinese financial information businesses of international news providers under the control of local rival and regulator, Xinhua news agency.
In its response to the EU and US requests for consultation, the first step of a formal complaint, the commerce ministry said China would look into the issue and handle it according to WTO dispute resolution procedures.
"As a WTO member, China respects other members' choices," the ministry said in a statement. Officials declined to comment further.
The statement's conciliatory tone will fuel hopes that a deal can be reached on the Xinhua rules, which have not been enforced but are seen by international news agencies such as Reuters, Bloomberg and Dow Jones as a potential threat to their China operations.
Trade lawyers said the reaction appeared to be part of a continuing trend for Beijing to regard litigation in the WTO as part of the normal course of events rather than a challenge to its national sovereignty.
"Increasingly the Chinese are realising that the sky doesn't fall in when they are taken to dispute settlement or even when they lose a case," said one Geneva-based trade lawyer.
The commerce ministry has responded to past WTO actions on other issues by the EU and US with statements variously expressing "regret", "bafflement" and "strong dissatisfaction".
A deal on the Xinhua rules would prevent the dispute adding to mounting diplomatic strains caused by China's huge trade surplus with the US and EU and allegations that Beijing manipulates the renminbi exchange.
Liu Binjie, head of the General Administration of Press and Publications (Gapp), said officials were considering the possibility of ending Xinhua's role overseeing its foreign counterparts in China.
"The issue is being discussed at home and abroad. We will seriously listen to opinions from all sides," Reuters quoted Mr Liu as saying.
Xinhua declined to comment and it is unclear how willing the agency, the government's main propaganda organ and an influential institution in its own right, might be to soften its 2006 regulations. The rules bar foreign agencies that sell financial news and information to non-media customers in China from direct contact with their clients, requiring them to work through an arm of Xinhua instead.
Xinhua officials have said the agency strictly separates its regulatory, commercial and propaganda functions, but the EU and US believe the rules breach China's WTO commitment to liberalised financial information services.
The European Union and US are to launch formal proceedings at the World Trade Organisation over China's attempt to put the financial information businesses of international news providers under the control of the local rival and regulator, Xinhua news agency.
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FT Syndication Service
CHINA'S commerce ministry has reacted in unusually mild fashion to a World Trade Organisation action brought by the European Union and US over Beijing's regulation of financial news and information.
Washington and Brussels last week began WTO proceedings over 2006 rules that effectively put the Chinese financial information businesses of international news providers under the control of local rival and regulator, Xinhua news agency.
In its response to the EU and US requests for consultation, the first step of a formal complaint, the commerce ministry said China would look into the issue and handle it according to WTO dispute resolution procedures.
"As a WTO member, China respects other members' choices," the ministry said in a statement. Officials declined to comment further.
The statement's conciliatory tone will fuel hopes that a deal can be reached on the Xinhua rules, which have not been enforced but are seen by international news agencies such as Reuters, Bloomberg and Dow Jones as a potential threat to their China operations.
Trade lawyers said the reaction appeared to be part of a continuing trend for Beijing to regard litigation in the WTO as part of the normal course of events rather than a challenge to its national sovereignty.
"Increasingly the Chinese are realising that the sky doesn't fall in when they are taken to dispute settlement or even when they lose a case," said one Geneva-based trade lawyer.
The commerce ministry has responded to past WTO actions on other issues by the EU and US with statements variously expressing "regret", "bafflement" and "strong dissatisfaction".
A deal on the Xinhua rules would prevent the dispute adding to mounting diplomatic strains caused by China's huge trade surplus with the US and EU and allegations that Beijing manipulates the renminbi exchange.
Liu Binjie, head of the General Administration of Press and Publications (Gapp), said officials were considering the possibility of ending Xinhua's role overseeing its foreign counterparts in China.
"The issue is being discussed at home and abroad. We will seriously listen to opinions from all sides," Reuters quoted Mr Liu as saying.
Xinhua declined to comment and it is unclear how willing the agency, the government's main propaganda organ and an influential institution in its own right, might be to soften its 2006 regulations. The rules bar foreign agencies that sell financial news and information to non-media customers in China from direct contact with their clients, requiring them to work through an arm of Xinhua instead.
Xinhua officials have said the agency strictly separates its regulatory, commercial and propaganda functions, but the EU and US believe the rules breach China's WTO commitment to liberalised financial information services.
The European Union and US are to launch formal proceedings at the World Trade Organisation over China's attempt to put the financial information businesses of international news providers under the control of the local rival and regulator, Xinhua news agency.
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FT Syndication Service