Beijing’s Financial News Grab : New controls on information worries Western services

Beijing’s newly announced curb on the distribution and sale of economic information in China sends a chilling message to financial news agencies. The surprise move makes the official New China News Agency the dominant distributor of financial news and data from companies like Reuters, Dow Jones and Bloomberg Business News. The agency will profit from its distribution and also will have the potential to censor. The development drew immediate protests from the Clinton administration, economists and news organizations.

Beijing’s credibility will suffer because of the action, and so will its continuing efforts to become a member of the World Trade Organization. A thriving economy like China’s depends on a free flow of economic information in and out, including the government’s own economic data. Signs of government control will reduce the possibility of an open economy.

Most disturbing is the question of whether China’s paranoid leadership is on the slippery slope toward censoring all news and information from outside the country. Chinese officials have been known to be worried about the increasing volume of general information made available from abroad through foreign news agencies and the Internet, which is not yet widely used there.

Tuesday’s edict in essence gives the official news agency the right not only to distribute and market financial information but also to check the news for anything that “slanders or jeopardizes the national interests of China.”

Beijing justified its action on the basis of security. The ruling State Council said it acted to “safeguard state sovereignty, protect the legal rights and interests of Chinese economic users.J.J.J.”

Perhaps. Or is the state news agency trying to grab a chunk of the fast-growing business of selling economic news to banks, securities houses and anyone else who can afford the $1,000 or more a month for such electronic news services? Western diplomats and industry officials fear that under the new rules the official agency will charge high prices to consumers of foreign economic news and then take a share of income.

Ultimately, control of news and information may be beyond Beijing’s reach with the advent of lightning-fast global communications. In fact, China may inadvertently open a rush to the Internet with its new edict.