President-elect Barack Obama told a Pittsburgh crowd this year that “trade with China will only be good for you if China itself plays by the rules.” Well, thanks to its membership in the World Trade Organization, China is learning to do precisely that.
The latest example came Thursday, when American, European and Chinese negotiators resolved a trade tiff over financial information suppliers. The dispute started in 2006 when Xinhua, China’s state-run news agency, insisted that foreigners hand over private client data and use Xinhua as their sole distribution agent. The agency aimed to set up its own competing news service, Xinhua 08 — presumably after stealing foreign client lists and business plans.
The Wall Street Journal
The move upset an earlier deal between China and such foreign firms as then-Reuters (now Thomson Reuters), Bloomberg and Dow Jones, which is owned by News Corp. and owns this newspaper. Xinhua had tried to muscle foreigners out of the market in the 1990s, and the U.S. and European Union agreed at the time that their firms would be subject to content oversight by Xinhua in exchange for permission to operate in China and sell directly to clients.
After the latest Xinhua power play, the Bush Administration filed a complaint at the WTO. The European Union and Canada joined the U.S. case. After eight months of negotiation, the governments announced Thursday that China had more or less caved. Foreigners will be allowed to distribute news directly to their clients, without interference from Xinhua, and will not be forced to cough up confidential client information to obtain a business license. China also promised to set up an independent regulator to oversee the industry, removing Xinhua’s oversight, by June 1 next year.
In other words, China agreed to play by WTO rules. This isn’t a one-off event….
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