XINHUA REBUFFS CRITICISM, STANDS BY REGULATIONS

C O N F I D E N T I A L SECTION 01 OF 02 BEIJING 020678

SIPDIS

SIPDIS

E.O. 12958: DECL: 09/27/2031
TAGS: PREL PHUM ECON ETRD KPAO CH
SUBJECT: XINHUA REBUFFS CRITICISM, STANDS BY REGULATIONS

REF: A. A) BEIJING 19547


B. B) BEIJING 19133

Classified By: Political Section Internal Unit Chief Susan A. Thornton.
Reasons 1.4 (b/d).

Summary
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1. (C) New regulations restricting foreign wire
services' distribution of news and financial data in
China aim to create a healthy media climate, state-run
Xinhua News Agency staffer Wang Hongyu told Emboffs
September 27. Wang said Xinhua had three motives in
introducing the rules, namely a) standardizing
dissemination of information so that all comes from a
vetted source; b) protecting intellectual property
rights; and c) safeguarding social stability. The
rules will not affect reporting on the Olympics and do
not apply to foreign newspapers, magazines or
television networks active in China. Xinhua itself
will enforce the new restrictions, although Wang
declined to discuss implementation details or possible
penalties for infractions. Emboffs told Wang that the
regulations represent a step backward in China's
effort to develop a modern, information-based economic
system, may violate China's WTO commitments and have
implications for freedom of expression. Enforcement
of the new rules over the past two weeks appears to be
inconsistent at best, with much foreign wire copy
appearing in major Chinese papers. End Summary.

Xinhua: Rules Necessary for "Healthy Climate"
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2. (C) Wang Hongyu, a staff member of Xinhua's
Foreign Information Administration Center, opened a
September 27 meeting with Emboffs by apologizing for
the delay in meeting to discuss the new rules, which
were issued September 10 (reftels). (Note: Xinhua
declined several meeting requests from Post in the two
weeks following the announcement, claiming that
officials were too busy. End note). While Xinhua is
aware of the criticism coming from foreign governments
and news agencies, the goals of the regulations remain
valid, Wang said. They include a) standardizing the
provision of news and information from foreign sources
to domestic consumers, b) protecting the intellectual
property rights of the foreign news agencies and c)
creating what Wang called a "healthy media climate" by
making sure no foreign news reports stoke instability
within China. On this last point, Wang charged that
foreign media sources have been known to run stories
advocating Taiwan independence, an "unhealthy
influence" on society, he said. Responding to our
question, Wang said no foreign news outlets have come
to Xinhua to complain about IPR violations, but he has
heard that such concerns exist.

Xinhua to Journalists: Don't Worry, No Change
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3. (C) Recalling Premier Wen Jiabao's comments at a
September 13 press conference in London, Wang
contended that "China's rules regarding foreign media
freedom in China have not changed." He stated that
the new rules do not apply to foreign newspapers,
magazines or television networks active in China and
will have no effect on foreign journalists' coverage
of the Olympics. While dissemination of news
photographs is subject to the new rules, Xinhua has no
intention to impose restrictions on interviews or
other news gathering activities, Wang said.
Nonetheless, foreign news agencies are required to
abide by (the lengthy) Article 11 of the new
regulations, which prohibits release of news that
harms China's social stability and "interests." In
this context, Wang recited points we regularly hear
from Chinese officials when we raise speech freedom
concerns: that no society can have absolute freedom of
expression, that China's constitution protects free
speech, and that any controls are consistent with
China's laws.

Authority and Enforcement
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4. (C) Wang said Xinhua itself announced the new
rules as opposed to the State Council Information
Office (as is standard practice when the Government
publicizes new policies or decrees) in accordance with
the Administrative Licensing Law of 2004. The law

BEIJING 00020678 002 OF 002


allows for Government agencies to make announcements
concerning policies they are responsible for
implementing, Wang stated. As for follow through,
Xinhua will be responsible for enforcing the
restrictions, which will mainly affect banks and
brokerage houses who subscribe to financial news
sources such as Bloomberg, Reuters and Dow Jones.
Wang declined to discuss enforcement specifics or
possible penalties for infractions.

Foreign Media and Firms Unhappy
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5. (C) Emboffs stressed that foreign news agencies,
the American Chamber of Commerce and the U.S.
Government are all in agreement that Xinhua's measures
are a step backward in China's efforts to become a
modern, information-based economy and may violate
China's WTO commitments. U.S. officials have already
raised serious concerns with the Chinese Government
and will continue to do so, Emboffs stated. Beyond
fair trade issues, the new rules will negatively
impact freedom of expression, Emboffs told Wang.

Comment
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6. (C) Since Xinhua introduced the new rules on
September 10, enforcement has been inconsistent at
best. News articles in many commercial Chinese papers
continue to run copy sourced to foreign wire services.
We have no reports from our media contacts of any
outlets being disciplined on this score to date.
Nonetheless, the meeting with Wang, who used to be a
Xinhua correspondent in Pakistan, reaffirms our
impression that Xinhua hopes to use the restrictions
to corner the lucrative financial information market
in China.
SEDNEY