Critics Dispute Impact of China's Revised Media Rules

BEIJING, Sept. 12 -- Journalism and human rights groups on Tuesday blasted China's efforts to further control the distribution of news and financial information by foreign news agencies, saying revised regulations showed that the government was tightening censorship.

But other experts said the impact of the new rules was limited in a country that already bans direct delivery of general news to Chinese media. They said the new rules signaled an attempt by China's state media to grab a piece of the lucrative financial information market.

The New China News Agency, mouthpiece for the Communist Party, announced revisions Sunday to 10-year-old regulations governing foreign news agencies in China.

The new rules explicitly forbid foreign agencies to distribute news that undermines China's national unity or sovereignty or endangers China's national security, reputation and interests. Under the rules, agencies cannot include content banned under Chinese laws, and the New China News Agency has the right to decide what news and information will be released in China and can delete anything it deems inappropriate.

But Chinese journalists and experts said the rules merely reflect existing conditions. Foreign media companies have long been banned from selling general news services directly to Chinese media. Financial news, however, has up until now been sold directly to Chinese banks and brokerages, which depend on the data to make market trades. It is this multimillion-dollar market that the New China News Agency, known here as Xinhua, is targeting, experts said.

"The news that goes into newspapers in China is already controlled, and already goes out through Xinhua," said James McGregor, who was chief executive of Dow Jones's China business operations when Xinhua first tried to regulate foreign news services in 1996. "They're trying to take over the financial information business in China. They want to make the money instead of the foreigners. This is not a control issue -- they already have control. This is a money issue."

The new rules, if enforced as currently stated, will give the New China News Agency a virtual monopoly for distribution of all news, information and data from foreign news agencies in China. The directive is the same as one that McGregor and the Reuters news agency successfully fought 10 years ago. The move effectively shuts out agencies including the Associated Press and Bloomberg at a time when China's growing financial markets increasingly depend on the latest economic data available worldwide.

McGregor, now chief executive of J.L. McGregor & Company, a China-focused research, advisory and investment firm, said the new rules would hamper Chinese traders who have no interest in censored news filtered by the New China News Agency.

"This is bad for China," McGregor said. "It doesn't matter if it's politically sensitive news or a rumor, it's information that can move markets. That's valuable to Chinese traders as well. They need the same information as everybody else. When China sneezes, the world's commodity markets get pneumonia."

Clayton Haswell, director for Asia and the Pacific for the Associated Press, said the new rules will have "no effect" on the way the agency covers and provides news globally. "But this raises serious concerns for AP regarding fair trade and the free flow of information within China," Haswell said.

Chinese officials said the rules would have little impact.

An official with the Foreign Information Administration Center within the New China News Agency who insisted on anonymity said the new rules aimed only to disseminate news and information in a "sound and orderly manner."

Cao Jingxing, a visiting professor with Qinghua University's School of Journalism and Communication, said it "has always been the case that only state media such as CCTV, Xinhua and China Radio International can directly use news from foreign agencies like AP and Reuters."

Some Chinese newspapers, however, have begun to secretly buy foreign news service content. They sometimes combine news service reports, editing the news to make stories appear to be their own, Cao said.

The issue of censorship in China remains a major concern of the West.

While China's announcement does not censor media reports for foreign consumption, it nevertheless bodes ill for upcoming Olympics coverage in 2008, New York-based Human Rights in China said.

The measures "sound a wake-up call to the international community that a closed, state-controlled Olympics is on the horizon," the group's executive director, Sharon Hom, said in a statement.

Researcher Li Jie contributed to this report.