Xinhua's Financial News and Reporting Battle in China

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

China's Media Curbs Aim to Bolster Xinhua

• Summary: China's Xinhua news organization, with Beijing's backing, is looking to take control of economic and financial news and reporting in China by limiting the capabilities of foreign news vendors such as Reuters, Bloomberg, and Dow Jones. US and EU officials are already expressing concerns about Xinhua's plans to further restrict information flows from foreign newswires and also to charge fees related to the requirement that newswires use a Chinese sales agent. The president of Xinhua has close ties to China's president Hu Jintao. However, veteran Western media executives that have long experience dealing with Xinhua say internally the Chinese media giant is very bureaucratic, struggling with office politics, and feels the threat of the Internet.
• Comment on related stocks/ETFs: This is a negative development on many fronts such as for companies like Bloomberg, Reuters (RTRSY), and Dow Jones (DJ), for Chinese citizens craving more financial news and coverage including financial industry employees who need better access to information, and in general for China's image ahead of the '08 Beijing Olympics. The WSJ article mentions a recent speech by Xinhua's president where he emphasized his firm's support from the government and said, "... it's truly a rare opportunity. We must grab it firmly. [The final goal is] basic replacement of the competition." The former head of Dow Jones in China remembers the attack Xinhua launched a decade ago and said, "[Xinhua] is using the excuse of information control to try to build a business. If the [foreign financial media] industry doesn't come back with a united and tough response, they will lose the battle this time." See related coverage by IHT.com. Notice how Chinese political and corporate leaders are sending mixed messages to the world. Just yesterday a senior energy policy executive spoke of "opposing the cold war mentality" and suggested collaboration in oil field development. See highlights of a speech by a senior Xinhua official who spoke of the worsening polarization of information rich and poor countries.

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