CHINA tightened its grip on the media yesterday and banned all reports distributed within the country by foreign agencies until they had been cleared by the State.

The clampdown, which will hit agencies such as Britain’s Reuters, was announced in Beijing as Wen Jiabao, the Prime Minister, met European Union officials at a China-EU conference in Finland. Mr Wen is due in London tomorrow for talks with Tony Blair. Erkki Tuomioja, the Finnish Foreign Minister, said that he would raise the issue today with Li Zhaoxing, his Chinese counterpart.

The new rules give the state-owned Xinhua News Agency the power to censor the agencies’ reports in China. The measures, which take immediate effect, ban foreign agencies from distributing their content except through Xinhua or its authorised entities.

Xinhua said that reports that disrupted China’s economic and social order or undermined social stability would be banned. Also prohibited is news that endangers national unity, sovereignty and territorial integrity.

While the latest rules do not specify economic reports, they resemble similar regulations issued ten years ago when Xinhua tried to muscle in on such financial news providers as Reuters, Bloomberg and Dow Jones by requiring registration of all contracts and a 15 per cent fee.

The new rules might prove to be a goldmine if Xinhua is able to demand a cut of the agencies’ revenues from distributing financial data to China’s fast-growing markets.

The news agencies, backed by the EU and the United States, succeeded in watering down the 1996 measures through two years of tortuous negotiations and relentless harrying on their behalf whenever a British or American minister met a Chinese official. Xinhua finally gave up trying to take a share of the foreign agencies’ revenues because the row was having an impact on China’s delicate negotiations to join the World Trade Organisation.

The 1996 regulations, apparently including subsequent assurances by Xinhua that it would not take a cut, are repealed under the new measures.

The state-run news agency, which has the status of a ministry, is both competitor and regulator of its competitors. Further strengthening its hand is the close relationship between Tian Congming, the president of Xinhua, and Hu Jintao, the President of China and Communist Party chief. Both men worked together in Tibet during the late 1980s when Mr Hu was party chief of the region and Mr Tian was his deputy.

In a recent unpublished speech Mr Tian said that one of the goals of his agency was to put Reuters and Bloomberg out of business in China, replacing their services with Xinhua’s financial information and data.

Xinhua said: “Foreign news agencies shall not directly solicit subscription of their news and information services in China.” A spokeswoman for Reuters said: “We are studying the rules quite closely to see how they differ from current guidelines and we will be discussing them with Xinhua.” Bloomberg and Dow Jones were not available to comment.

In 1996 the agencies worked together quietly to try to water down the rules. This time Xinhua is almost certainly calculating that the lure of the revenues to be earned from China’s financial markets and from its increasingly profitable banks and brokerages will discourage the agencies from joining forces to resist the rules. Xinhua would then be in a position to ensure that there was no delay in delivery of vital financial information to the markets in China, while taking a share from each of the agencies if they negotiated separately.

Xinhua, founded in 1931 as the Red China News Agency, is trying to build a financial news service and has been trying to use Beijing’s hosting of the 2008 Olympics as a lever to boost its sports coverage and photo services. It said yesterday that it would conduct annual reviews to decide whether to renew business licences of foreign media. Violations can elicit warnings or a grace period to correct mistakes. Licences can be suspended or revoked if agencies publish objectionable news or develop clients.

Xinhua is believed to have been infuriated by references by foreign media to the leader of the island of Taiwan, which Beijing regards as a renegade province to be recovered by force if necessary, as its “president” and mention of the Falun Gong cult, banned in China.

Banned websites and journalists

CENSORSHIP by China of information reaching its 1.3 billion people has gained momentum in the past year.

Last month officials said that they planned to allow only designated websites to broadcast videos online.

That rule expanded on the requirement on foreign internet service providers to monitor their sites to conform to local regulations. So the search engines of Google, Yahoo! and Microsoft filter content by blocking hundreds of keywords such as “Tiananmen Square”, “Falun Gong”, “democracy” and “Dalai Lama”.

Websites considered politically sensitive, including the BBC, are banned. Foreign newspapers are on sale only in international hotels and censors occasionally rip out offending pages from foreign news magazines.

Satellite television that broadcasts international programmes is allowed only in compounds where foreigners live or in hotels with foreign guests.

This year the Government proposed a draft law that would fine any media outlet that broke news on emergencies such as natural disasters without authorisation.

Last month China jailed a Chinese journalist for fraud and sentenced a Hong Kong reporter for a Singapore newspaper to five years in prison for espionage. China is believed to have put more than 32 journalists, as well as several internet writers, behind bars for writings considered to be subversive.

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