China agrees to loosen controls on news providers

China, which has since 2006 required foreign news companies to funnel their data through the state's own agency, will set up an independent regulator next year to create a level playing field for financial information providers.

Calling it a "landmark agreement," Brussels said companies such as Thomson Reuters Corp., Bloomberg LP and Dow Jones & Co. would benefit from better conditions for the sale of financial information to banks, government agencies and other customers in China.

The Chinese mission confirmed that a settlement was signed Thursday in Geneva.

U.S. Trade Representative Susan Schwab said China's commitment to establishing an independent regulator in the sector was especially important.

The U.S. and EU filed a World Trade Organization case against China in March demanding that it loosen restraints on foreign companies vying for a greater slice of the country's lucrative market for financial information. Canada made its complaint shortly after.

They said China violated its free-trade pledges by imposing rules two years ago that boost its Xinhua News Agency at the expense of foreign financial information providers by making Xinhua--the ruling Communist Party's mouthpiece--both a competitor and regulator to its rivals.

"I am very pleased we have been able to sign an agreement with China today to allow financial information suppliers like Bloomberg, Dow Jones and Thomson Reuters to operate in China free of unfair restrictions that threatened to place them at a serious competitive disadvantage," Schwab said. "The independence of the regulator is critical to ensuring a legal environment that is free of damaging potential conflicts of interest."

Washington said the agreement forces China to designate an independent regulator to replace Xinhua, and no longer requires foreign firms to do business in China through a local agent.

"This is critical to providing a level playing field for our businesses in China," the Office of the U.S. Trade Representative said in a statement.