News Releases

No. 15/08
March 3, 2008

EU REQUESTS WTO CONSULTATIONS OVER CHINESE RULES ON FINANCIAL INFORMATION PROVIDERS

The European Union has formally requested consultations at the WTO over measures that affect the operation of foreign financial information suppliers in China. China has prevented foreign suppliers of financial information services from providing their services directly to their clients. They are now required to operate through an agent that is a branch of Xinhua itself. Moreover, Xinhua has recently launched a financial information service in direct competition with foreign suppliers. The European Commission had tried to solve the issue through cooperation and dialogue, but without success. The United States has also requested consultations at the WTO over this issue.

EU Trade Commissioner Peter Mandelson said: "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. I trust the EU and China will be able to resolve this issue amicably and to mutual benefit."

The relevant Chinese measures appear to breach China's GATS (General Agreement on Trade in Services) commitments on national treatment and market access, which require that foreign companies can operate in China and are not treated less favorably than local ones. It is also contrary to obligations not to cut back on existing rights for companies and to provide regulatory independence, which China committed to ensure at the time of its WTO Accession in 2001.

The rules in place in China pose a serious obstacle to the business of EU financial information suppliers, which in turn impedes the smooth functioning and transparency of China's financial markets. The European Commission has maintained in its dialogue with the Chinese authorities that such a development would be contrary to China's own stated goal of stable markets and a modern and competitive financial services sector, in which Chinese providers will also be able to grow and prosper.

Commissioner Mandelson met with Xinhua President Tian Congming twice last year, in June and again in November, to discuss the issue. He has also raised the EU's concerns with Vice Premier Wu Yi and with the outgoing Minister of Commerce Bo Xilai.

For more information, please see: http://www.eurunion.org/newsweb/HotTopics/Asia.htm#China .
 

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