US, China look set for another showdown

Written by Associated Press | Geneva, January 31: | Updated: Jan 31 2008, 15:42pm hrs
The United States has told China to get serious about relaxing the restraints on financial information providers in a letter that could represent a final warning before the US asks the WTO to intervene in the matter, it is learnt.

In the letter to Chinese trade officials, the office of the US Trade Representative signaled it has run out of patience with China's refusal to change rules introduced two years ago that appeared to boost the official Xinhua News Agency at the expense of financial information companies such as Reuters Group PLC and Bloomberg LP.

The World Trade Organization said it has yet to receive a formal complaint from the United States, which is pursuing China in separate trade cases over rampant Chinese product piracy and measures hindering sales of US-made auto parts, CDs, DVDs and books, in separate cases.

Washington stopped short of saying it would launch a new WTO dispute, said trade officials, who saw the US letter dated January 25 but demanded anonymity because of the sensitivity of the issue. The USTR in Washington refused to confirm the letter or to outline its plans. The Chinese Commerce Ministry could not immediately be reached for comment.

The restrictions announced in 2006 were part of an effort by the communist government to reassert control over the increasingly porous flow of information and to help transform Xinhua from a purveyor of state propaganda into a modern, profitable news agency.

Targeting the rapidly expanding Chinese market for financial information, the rules make Xinhua both a competitor and regulator, requiring that data, videos and photos be funneled only through Xinhua-approved distributors.