China puts the blinkers on news

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China yesterday said it was taking control of the dissemination of all foreign economic news within the country. The regulations appear to permit it to censor and delay such news and allows it to punish providers of foreign economic information who release information which "slanders or jeopardises the national interests of China".

The State Council circular also makes the official Xinhua news agency the all-powerful regulator in an increasingly profitable business sector. The new rules give Xinhua authority to set subscription rates, and presumably to take its slice of revenues. It already controls dissemination of news agency wire services within China, for instance from Reuters and Associated Press, and keeps half the revenue earned from domestic customers.

By targeting economic news, it is taking control of a potentially much more profitable business. The main foreign companies now providing economic information within China are Reuters, AP-Dow Jones Telerate, and Bloomberg.

"The purpose of making the move is to safeguard the state sovereignty, protect the legal rights and interests of the Chinese economic-information users and promote the healthy development of the country's undertaking of economic information," the State Council said.

All Chinese organisations and departments will be forbidden to purchase economic information directly from foreign wire services and will instead have to buy it through Xinhua. Economic information, which can have a direct effect on China's fledgeling financial markets, is often considered by the government to be even more sensitive than foreign news reporting about China.

Reuters said the rules could have "serious editorial implications". Xinhua will supervise the sale of economic information provided by foreign news services; news providers will have to register and be approved by Xinhua and China will "examine and approve" the "varieties of their economic information".

The order also allows Xinhua to punish foreign economic news providers "if their released information to Chinese users contains anything forbidden by Chinese laws and regulations, or slanders or jeopardises the national interests of China".