This presentation covers China's two attempts to capture the international financial information services markets, the first being in 1997, the other being in 2007. In both cases, China was ultimately dissuaded from pursuing this course any further and in both cases, the WTO played a significant role.

1. China’s Quest to Capture the International Financial
Information Services Market
Simon Lacey | Last Updated 15 April 2013

2. Time Line of the 1996/97 Events
 January 1996 – New decree from Xinhua.
 Three months later – McGreggor leads a group of 25 US executives on a lobbying
trip to Washington to renew China’s MFN trading status.
 April 15 1996 Xinhua announces implementing regulations for the January decree.
 April 1997 warns that Dow Jones and Reuters customers in Guangdong province
would have their satellite dishes cut on June 30 unless they registered with Xinhua.
 June 30 1997 British Government hands back Hong Kong to China.
 Within 2 weeks of the HK handover, Xinhua agrees on an exchange of letters
between the US and China.
 Five months after the US letter, Xinhua provides a response in which it Xinhua
essentially backs off.
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3. The Measure at Issue (1996/97)
January 1996 Decree from Xinhua
- Xinhua will supervise foreign wire services to safeguard state
sovereignty
- Government departments at all levels, enterprises and institutions … are
not allowed to purchase economic information directly from foreign wire
services
- Xinhua will examine and approve … economic information to be
released in China.
- Xinhua will determine subscription rates
- Foreign news agencies have three months to register with Xinhua
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4. The Main Actors 1996/97
 Dow Jones (US company)
 Reuters (UK Company)
 USTR, EC Commission
 World Bank representative and others
 Xinhua
- Communist Party Propaganda Department
- State Council (author of the January 1996 Decree)
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5. Time Line of the 2006/08 Events
 September 2006 Xinhua issued the Decree “Administrative Measures on
News and Information Release by Foreign News Agencies within China”.
 After complaints from the US and EU, China’s Premier publicly promised
that the new rules would not change how foreign financial information
service providers did business in China.
 Shortly thereafter Xinhua told foreign financial information service providers
that the new rules would only be applied to them after an implementing
measure was issued.
 But it then required foreign financial information service providers to
conclude agreements with a Xinhua affiliate before renewing their licenses.
 March 2008 US files a request for consultation
 Nov 2008 China settles the dispute with the US, the EU, and now Canada.
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6. The Measure at Issue (2006/08)
September 2006 Administrative Measures on News and
Information Release by Foreign News Agencies within China
- Preclude foreign providers of financial information services from contracting
directly with, or providing financial information services directly to domestic
Chinese clients
- Requires foreign financial information services providers to operate through
a Xinhua-designated agent (Xinhua affiliate China Economic Information
Service – CEIS)
- Prohibits users of financial information services in China from directly
subscribing to services supplied by foreign suppliers
- Requires foreign financial information service providers and their customers
to provide the Foreign Information Administration Center (FIAC) detailed
information concerning these services and the terms they were provided
under.
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7. The Main Actors 2006/08
 Thomson Reuters
 Dow Jones
 Bloomberg
 USTR, EC Commission, Canadian MFAT
 Xinhua
- China Economic Information Service – CEIS
- Foreign Information Administration Center (FIAC)
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8. What were the WTO Obligations cited?
 Art. XVI Market Access
 Art. XVII National Treatment
 Art. XVIII Additional Commitments
 The horizontal standstill commitment contained in
China’s Schedule; and
 Para 309 of the Working Party Report (as incorporated
by the Protocol of Accession).
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9. What were the WTO Obligations cited?
The sectoral commitments contained in China’s Schedule (Market
Access, National Treatment Additional Commitments)
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Limitations on Market
Access
Limitation on National
Treatment
Under Financial Services
K. Other financial services as
listed below: k. Provision and
transfer of financial
information, and financial data
processing and related
software by supplier of other
financial services
(1) None
(2) None
(3) None (Criteria for
authorization to deal in China's
financial services sector are
solely prudential (i.e., contain
no economic needs test or
quantitative limits on licenses).
Branches of foreign institutions
are permitted.
(4) Unbound except as
indicated in Horizontal
Commitments
(1) Unbound
(2) None
(3) None
(4) Unbound except as
indicated in Horizontal
Commitments.

10. What were the WTO Obligations cited?
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11. What were the WTO Obligations cited?
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12. How was the issue resolved?
 In 1996/97?
 In 2006/08
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13. What was different in 96/97 to 2006/8?
 1997 – Hong Kong handover, China’s annual MFN
renewal, Ongoing accession to the WTO
 In 2006/8 China was a WTO Member
 What motivated China’s ultimate decision to settle the
case in your opinion?
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