Xinhua, now faster and more attractive

Mure Dickie and Kathrin Hille in The Financial Times report:

China has opened its market to financial information providers, ending an attempt to give the official Xinhua news agency tight control over its foreign competitors and resolving a trade dispute with the US, the European Union and Canada.

Under a deal signed by the four parties in Geneva on Thursday, China agreed to transfer Xinhua’s role in overseeing foreign financial information suppliers to an independent regulator and to allow such suppliers to set up commercial operations.

The agreement, reached after seven months of World Trade Organisation consultations, removes a big operational risk for financial information providers such as Thomson Reuters, Dow Jones and Bloomberg. It also represents a victory for advocates of market reforms over the interests of Xinhua, which sparked the dispute by issuing tough new rules on the foreign agencies in September 2006.

China has required foreign news agencies to distribute to media clients only through Xinhua for more than 50 years. The agencies do not challenge these restrictions, which help the Chinese government ensure news does not reach the ­public uncensored...

...Xinhua denied it was in competition with foreign agencies. “This issue does not exist anymore,” said Liu Jiang, the agency’s deputy editor-in-chief, before the deal’s announcement. “We don’t want to restrict foreign news agencies: that would be backward behaviour.”

Mr Liu said the agency was going through a “strategic transformation” that should make it faster and its content more attractive.

Faster and more attractive? That is something to watch for.

This is also hopefully the end to a struggle that has been going on for decades: Xinhua both regulating and competing with the foreign wire services offering financial news in China. The first round of the fight between Reuters and Dow Jones et al. was won by the barbarians; James McGregor's book about business in China One Billion Customers contains a insider tale of the fight.