WTO to chide Chinese on press curbs

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BRUSSELS -- The European Commission is preparing a World Trade Organization challenge to China over restrictions on foreign news providers, saying that Beijing is breaking global trade rules by blocking agencies such as Bloomberg, Dow Jones and Reuters.

The challenge, which officials say will be formally announced within days, comes at a delicate time for China. With the Beijing Olympics just six months away, the authorities will be keen to disprove complaints about curbs on free media, free speech and human rights.

The commission's WTO challenge is focused on rules limiting the scope of foreign financial news organizations. In September 2006, China confirmed the monopoly right of state news agency Xinhua to regulate foreign providers of financial information services. Xinhua, founded by the Communist Party in 1931, issues annual licenses for overseas media organizations, barring them from directly soliciting subscribers in China.

The rules say that Xinhua has the right to select information released by foreign organizations and to delete any materials that are deemed to undermine China's social stability, endanger national security or disrupt the country's economic order, among other prohibitions. For breaching the rules, foreign news agencies may face warnings, demands for rectification, suspension or cancellation of their qualifications to release information.

"It effectively means that Xinhua has a dual role as both a competitor of European financial services information providers and their Chinese regulator," an EC official said. "It breaks WTO rules on providing fair access to services." The U.S., Canada and Japan also have raised concerns about the rules, and could join the EU in the WTO challenge.

Chinese authorities want to use this summer's Olympics to showcase the country's dynamic transformation, and there are pledges to offer unprecedented access to foreign journalists. 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 only those run by state-sanctioned companies.

China currently ranks 163rd in the 2007 Reporters Without Borders index of press freedom, just above Myanmar, Cuba and Iran, with Eritrea at the bottom in 169th place.

On Tuesday, China released Hong-Kong-based journalist Ching Cheong on parole from a five-year prison sentence for allegedly spying. Reporters Without Borders welcomed the release but appealed to the Chinese government to release all of the 32 journalists and 51 cyber-dissidents currently held in Chinese jails.

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