09/14/06

China defends media market controls, tries to reassure financial subscribers


By JOE McDONALD
Associated Press Writer

BEIJING (AP) -- China defended recently announced restrictions on foreign news agencies, saying Thursday that the official Xinhua News Agency will not abuse its new monopoly over the supply of economic information to the fast-growing Chinese financial market.

Officials from the premier to government functionaries tried to blunt rising international criticism that the new regulations -- which give Xinhua control over the distribution of foreign agencies' news and other services in China -- are anticompetitive and a blow to free expression.

"There will be no problem of impeding competition in the market," Liu Binjie, the deputy director of the Cabinet's Press and Publications Bureau, told reporters. "The government will make sure that a level playing field is provided, and monopoly and anti-competition are avoided."

Speaking at a news conference on cultural policies that was often sidetracked by questions on the regulations, Liu said the rules prevent Xinhua from using its regulatory powers to hurt competitors. He did not elaborate.

Premier Wen Jiabao, on a visit to London, also tried to reassure foreign news organizations that their newsgathering in China won't be affected and that the government would ensure fair play.

"The Chinese government will ensure the freedom and rights of the foreign news media," Wen said at a news conference with Prime Minister Tony Blair on Wednesday.

The regulations appear meant to boost Xinhua's efforts to transform itself from the ruling Communist Party's propaganda mouthpiece into a modern, profitable entity. All information is to be funneled through the Cabinet-level agency, which will censor reports. Xinhua or entities it designates will then distribute the information.

Xinhua has targeted financial information as a key part of its transformation.

The market for financial information has grown with China's increasing share of global commerce. Under 1996 regulations, foreign news agencies were allowed limited distribution of financial data and other information. Reuters Group PLC and Bloomberg LP sell financial information to Chinese banks, government agencies and other institutions.

The criticism touched off by the release of the rules Sunday underscores China's difficult integration with the world community. While China moves into the global economy, its communist government is trying to clamp down on domestic media and the information available on the Internet.

The United States and European Union have criticized the rules as an effort to restrict free expression. Press freedom and human rights groups have blasted them as an attempt at limiting the Chinese public's access to information.

Wen, in Europe for a summit with the European Union and official visits to Britain and Germany, has faced repeated questioning about the regulations. During his 21-hour stay in Britain, he twice had to confront the issue, the state-run China Daily said.

The rules tighten already severe restrictions on foreign agencies such as The Associated Press and Reuters that want wider access to the Chinese market ahead of the 2008 Beijing Olympics.

Xinhua, in a statement released late Wednesday, said it "seeks no economic gains" from the regulations. The statement sought to reassure Chinese banks and securities firms that worried they might lose access to foreign economic news that they need to do business.

The rules guarantee "the release of economic information in China by foreign news agencies and the use of such economic information by Chinese subscribers," Xinhua said. Rather, Xinhua said, the rules are meant to promote the "sound and orderly" distribution of news.