EU, U.S. taking China to WTO

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BRUSSELS -- Just five months before the Beijing Olympic Games, the European Union and the U.S. have filed World Trade Organization challenges to China for clamping down on foreign media.

The two have charged Beijing with breaking global trade rules by blocking such agencies as Bloomberg, Dow Jones and Reuters.

China, they said, is violating global trade rules by giving the Xinhua News Agency the right to issue annual licenses for overseas media organizations, barring them from directly soliciting subscribers in China.

Xinhua was given sole power in September 2006 to regulate news services that distribute financial information in China while competing with them.

"China's restrictive treatment of outside suppliers of financial information services places U.S. and other foreign suppliers at a serious competitive disadvantage," U.S. Trade Representative Susan Schwab said. "We have raised this matter with China repeatedly, yet the problem has not been resolved."

In Brussels, EC officials said that Xinhua was both a competitor of European news agencies and their Chinese regulator. "Competitive and open financial services information markets are the lifeblood of a strong financial sector, but China's rules have tipped the balance against foreign companies," EU Trade Commissioner Peter Mandelson said.

The joint WTO challenge is focused on the role of Xinhua, founded by the Communist Party in 1931, which issues annual licenses for overseas media organizations. Xinhua has the right to select information released by foreign organizations and to delete any materials deemed to undermine China's social stability, endanger national security or disrupt the economic order.

Authorities here have pledged unprecedented access to foreign journalists during this summer's Olympics, but the country still maintains strict controls on the media. Internet censorship directives order Web sites and ISPs to block searches using key words. Beijing also restricts the broadcast of videos on the Web to those run by state-sanctioned companies.
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