WORLD TRADE  
ORGANIZATION  WT/DS373/1 
S/L/320 5 March 2008 
 
 
(08-0981) 
 Original:   English 
  
 
CHINA – MEASURES AFFECTING FINANCIAL INFORMATION SERVICES AND 
FOREIGN FINANCIAL INFORMATION SUPPLIERS 
 
Request for Consultations by the United States
 
 
 
 The following communication, dated 3 March 2008, from the delegation of the United States to the delegation of China and to the Chairman of  the Dispute Settlement Body, is circulated in 
accordance with Article 4.4 of the DSU.  
_______________ 
 
My authorities have instructed me to request  consultations with the Government of the 
People's Republic of China ("China") pursuant to Articles 1 and 4 of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes  and Article XXII of the General Agreement on 
Trade in Services ("GATS") with respect to certain measure s pertaining to financial information 
services and service suppliers. 
 
In the financial services sector, as set out in its GATS Schedule of Specific Commitments on 
Services (the "Schedule"),
1 China made market access and national treatment commitments with 
regard to the provision and transfer of financia l information.  China also undertook a horizontal 
"standstill" commitment in its Schedule not to make the conditions of ownership, operation, and scope 
of activities - as set out in contractual agreements or licences establishing or authorizing the operation or supply of services by an existing foreign service su pplier - more restrictive than they were as of the 
date of China's accession to the World Trade Or ganization ("WTO").  Despite those commitments, 
various measures of China appear to impose market access restrictions and discriminatory 
requirements on foreign service suppliers seeking to  supply financial information to customers in 
China.   
 China requires foreign financial information suppliers to supply their services through an 
entity designated by Xinhua News Agency ("Xinhua").  Xinhua has designated only one agent, China Economic Information Service ("CEIS"), one of Xi nhua's commercial enterprises.  China prohibits 
foreign financial information suppliers from direct ly soliciting subscriptions for their services, 
requiring that solicitation of subscriptions be do ne through the Xinhua-designated entity.  China 
likewise prohibits users of financial informati on services in China from directly subscribing to 
services supplied by foreign suppliers.  Furthermore,  in order to renew their licences, China requires 
foreign financial information suppliers to provide  the Foreign Information Administration Center 
("FIAC"), a regulatory body within the Xinhua framework, detailed and confidential information 
concerning their financial information services and th eir customers along with a copy of an agreement 
with the designated agent.  China also requires customers to provide FIAC detailed information 
regarding their financial information services c ontracts with foreign suppliers.  These and other 
requirements and restrictions appear to accord less favorable treatment to foreign financial 
                                                     
 
1 Annex 9 of the Protocol on the Accession of the People’s Republic of China , WT/L/432, 23 
November 2001 (the "Accession Protocol").    WT/DS373/1 
S/L/320 Page 2 
 
 
  information services and service suppliers than th at accorded Chinese financ ial information services 
and service suppliers which are not affected by these requirements and restrictions. 
 China also appears to prevent foreign fi nancial information service suppliers from 
establishing any commercial presence in China other than limited representative offices.  
 In its Accession Protocol (which incorpor ates the commitment in paragraph 309 of the Report 
of the Working Party on the Accession of China
2), for the services included in its Schedule, China 
committed to maintain regulatory authorities that are separate from and not accountable to service 
suppliers they regulate.  Xinhua, through its orga nizational structure, including related entities and 
affiliates, appears to be both the regulator of foreign financial information suppliers and their 
competitor in the domestic market.  For exampl e, in addition to having responsibility for the 
examination and approval of forei gn financial information suppliers , Xinhua also supplies financial 
information services through its commercial entity, CE IS.  On June 20, 2007, Xinhua also launched 
"Xinhua 08", a financial information supplier th at supplies services on a commercial basis and in 
competition with foreign service suppliers.  Individu als within Xinhua who have authority over FIAC 
also appear to be participants in Xinhua's commercia l activities.  China thus a ppears to have failed to 
provide a regulatory authority that is separate fro m and not accountable to a service supplier that 
authority regulates.   
 
China's measures also appear to impose re quirements on foreign financial information 
suppliers that are more restrictive than those impo sed on them at the time of China's accession to the 
WTO.  Pursuant to licenses granted at that time, re flecting an exchange of letters between Xinhua and 
the US Government in 1997, foreign financial info rmation suppliers were al lowed to contract with 
customers in China, to distribute their services dir ectly to these customers, and to have their license 
applications approved without providing the regulat or details of financial transactions with their 
customers.  
 The United States understands that the measures through which China has maintained these 
requirements and restrictions include:  
 
• Notice Authorizing Xinhua News Agency to Implement Centralized Administration 
over the Release of Economic Information in the People's Republic of China by 
Foreign News Agencies and their Subsidiary  Information Institutions (State Council, 
31 December 1995 (issued as Circular No.1 of 1996));  
• Decision on Establishing Administrative Permission for the Administrative 
Examination and Approval of Items that must be Retained (State Council Order 
No. 412, 29 June 2004) 
 
• Measures for Administering the Release of  News and Information in China by 
Foreign News Agencies (Xinhua News Agency, 10 September 2006);   
 
• Notices on the Annual Inspection of Foreign News Dissemination Entities (Notice 
provided to foreign financial information suppliers regardi ng information that must be 
provided to FIAC as part of its annual licensing procedures);  
 
                                                      
2 WT/MIN(01)/3, 10 November 2001, para. 309 (the "Working Party Report").  WT/DS373/1 
 S/L/320 
 Page 3 
 
 
  • Catalogue of Industries for Guiding Foreign Investment (Order No. 57 of the National 
Development and Reform Commission and the Ministry of Commerce, 31 October 2007);  
 
• Decisions of the State Council Regarding Entrance of Non-Public Capital into 
Cultural Industries (Promulgated by the State Council, 13 April 2005); 
 
• Several Opinions on Introducing Foreign Investment into the Cultural Sector 
(Ministry of Culture No. 19, 6 July 2005); 
 
• Opinion on Foreign Investment in Cultural Industries (Promulgated by the Ministry of 
Culture, 5 August 2005); 
 
• Detailed Rules on the Approval and Contro l of Resident Representative Offices of 
Foreign Enterprises (MOFTEC Order No. 3, 13 February 1995); 
 
• Procedures of the State Administration for Industry and Commerce for the 
Registration and Administration of Resident Representative Offices of Foreign Enterprises (Promulgated by the State Council, 5 March 1983); 
 
• Rules for Internet Information Se rvices (State Council Decree No. 292, 
September 2000); and 
 
• Administrative Rules for Internet News Information Services (State Council 
Information Office and Ministry of Info rmation Industry, 25 September 2005);  
 
as well as any amendments, related measures, or implementing measures.  
These measures appear to be inconsiste nt with the following provisions: 
 
• Article XVI of the GATS;  
• Article XVII of the GATS;  
• Article XVIII of the GATS;  
• The horizontal standstill commitment contained in China's Schedule; and 
• China's Accession Protocol (including Part I.1.2 which incorporates the commitments 
reproduced in paragraph 309 of the Working Pa rty Report), which is an integral part 
of the Marrakesh Agreement Establishing  the World Trade Organization . 
China's measures also appear to nullify or impa ir the benefits accruing to the United States 
directly or indirectly under the cited agreements. 
 We look forward to receiving your reply to the present request and to fixing a mutually 
convenient date for consultations. 
 
__________