A level playing field for financial information services in China

The EU and China, together with the United States and Canada, reached on November, 13th, a landmark agreement on the treatment of financial information services in China. The Memorandum of Understanding (MoU) signed in Geneva addresses the concerns that had led the European Commission to launch WTO consultations on this matter in March 2008. The changes are due to be put in place by June, 1st, 2009.

The dispute launched by the European Union and the US before the WTO, was joined a few months later by Canada. The EU and China held WTO consultations in April this year, and had since then been engaged in a process of negotiation to try to find an amicable solution. The EU objected to requirements by China for all foreign financial information suppliers to operate through a specific agent designated by the Chinese government. The only agent was China Economic Information Service (CEIS), an entity controlled by Xinhua News Agency, which was also in competition with foreign suppliers of financial information.

The Chinese government has agreed to put a new regulatory framework in place by June, 1st, 2009. Responsibility will pass from Xinhua News Agency to a new, independent regulator and the requirement for foreign suppliers to operate through an agent will be removed. China has also committed to ensuring adequate protection for business confidential information, and confirmed that foreign financial information suppliers will face no obstacles regarding setting up commercial establishment in China.

Financial information suppliers such as Thomson Reuters, Bloomberg and Dow Jones will in future benefit from a new regulatory framework that will help to ensure a level playing field for all operators in the Chinese market.

In EU Trade Commissioner, Catherine Ashton, words: “Today's agreement ensures that investors and market operators will be able to receive comprehensive and objective financial information. This shows what can be achieved when interested parties cooperate in search of solutions.”

EU-China Trade

EU-China trade has increased dramatically in recent years to over EUR 300 billion in 2007. In 2008 the EU and China launched a new strategic mechanism for driving trade and economic policy. The EU has benefited from the growth of the Chinese market and the EU is committed to open trading relations with China. However it pushes China hard to trade fairly, respect intellectual property rights and meet its WTO obligations.