Reuters, Bloomberg – freedom fighters?
Jinfo Blog

22nd January 2009

By Tim Buckley Owen

Item

News that the Chinese authorities censored parts of President Obama’s inaugural speech was probably greeted with weary resignation by most people. But an agreement between China and the European Union towards the end of last year, about the treatment of financial information, may possibly further undermine Chinese leaders’ enduring ability to suppress news that they find inconvenient. It was last March that the European Union formally requested consultations at the World Trade Organization over China’s practice of preventing foreign financial information suppliers, including Thomson Reuters, Bloomberg and Dow Jones, from supplying their services directly to their Chinese clients. Instead they had to go through the China Economic Information Service, an entity controlled by the Xinhua News Agency, which was itself in competition with foreign suppliers of financial information. Launching the demand, in partnership with the United States and Canada, the then EU Trade Commissioner Peter Mandelson pointed out http://digbig.com/4ydns that China’s action appeared to breach its commitment under the General Agreement on Trade in Services that foreign companies operating in China would not be treated less favourably than local ones. ‘Competitive and open financial services information markets are the lifeblood of a strong financial sector,’ he said. Last November the Chinese government finally signed a memorandum of understanding with the EU http://digbig.com/4ydnt agreeing that regulatory responsibility would pass from Xinhua to a new independent regulator and the requirement for foreign suppliers to operate through an agent would be removed. China has also committed to ensuring adequate protection for business confidential information, and confirmed that foreign financial information suppliers will face no obstacles regarding setting up commercial establishments in China. As a vital market for China, the EU has been able to put pressure on it to trade fairly, respect intellectual property rights and meet its WTO obligations. ‘Today's agreement ensures that investors and market operators will be able to receive comprehensive and objective financial information’ said Trade Commissioner Catherine Ashton. This is of course a commercial agreement, not one about more general openness – except to the extent that accurate and complete information is essential if business is to operate effectively, so the change should incidentally remove one more brick in the Great Wall of Chinese censorship. As the Economist Intelligence Unit’s Viewswire reported earlier this month http://digbig.com/4ydnx the Chinese government, worried about economic hardship provoking social unrest, is cracking down even harder on internet dissent, while its media comment more freely and information becomes harder to suppress. Meanwhile the new regulatory framework for financial information should be in place by 1 June. No doubt Reuters, Bloomberg et al will be vigilant in ensuring that it happens – but should they be in the vanguard of opposing censorship generally as well?

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