China Agrees To Loosen Grip On Financial News Coverage
This story was written by Tameka Kee.
China has settled a dispute that will allow media companies like Thomson Reuters (NASDAQ: TRIN), Bloomberg and *Dow Jones* to provide financial news and info in the nation on their own terms. Previously, all Chinese finance coverage was monopolized by the state-run Xinhua News Agency, which had been granted the sole power to regulate financial news providers and compete with them at the same time in September 2006, per Bloomberg.
In March, the U.S. and the EU filed complaints with the WTO, arguing that China had violated global trade rules by giving Xinhua the right to issue annual licenses for all foreign media organizations, which effectively barred them from directly soliciting Chinese subscribers themselves. Canada joined the dispute after Canadian media giant Thompson Corp. acquired Reuters in April.
After months of negotiation, the trio of nations each signed separate memorandums of understanding (MOUs) with China in Geneva. According to AFP, China agreed to develop a new regulatory framework: including the appointment of an independent regulatory body and abolishing the need for foreign financial news providers to go through Xinhua. "The independence of the regulator is critical to ensuring a legal environment that is free of damaging potential conflicts of interest." said U.S. Trade Representative Susan Schwab. China has to have the new system in place by June 1, 2009. Execs from a number of financial news companies championed the agreement, saying that it would encourage the growth of China's financial services industry, its economy and its capital markets as a whole.
By Tameka Kee