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U.S. pressing China on financial data restrictions

WASHINGTON (Reuters) - The United States is pressing China to lift restrictions on foreign providers of financial information, a senior U.S. official said on Wednesday.

The official, speaking on condition he not be identified, said the United States had received “a lot of complaints” about rules that Xinhua, the Chinese state news agency and domestic regulator of financial information services, issued in September 2006 that precluded foreign companies from directly providing financial information to Chinese clients.

Companies affected by the rules include Reuters Group PLC and Bloomberg.

U.S. officials raised the issue again during high-level talks in Beijing in December, the official said.

He could not confirm a published report the United States was considering legal action against China at the World Trade Organization and referred questions on that issue to the U.S. Trade Representative’s office.

“Our actions in WTO meetings on China’s (compliance with World Trade Organization rules) confirm that we take this very seriously,” said Gretchen Hamel, a spokeswoman for the USTR. “However, I cannot confirm anything else.”

BNA’s International Trade Daily, a U.S. specialty news publication, quoting unidentified sources, reported from Geneva on Monday the United States had sent a letter to China signaling its intent to begin WTO dispute settlement proceedings if the issue was not resolved soon.

In December, the U.S. Trade Representative’s office explicitly warned it could take that step.

“The United States will take further actions in 2008, including the initiation of WTO dispute settlement, if appropriate, in order to ensure that U.S. suppliers are able to provide financial information services in China in a manner consistent with the commitment China made” when it joined the WTO in 2001, the trade office said in annual report on China’s compliance with its trade obligations.

The United States and European Union had been pressing China to establish an independent regulator in the financial information services sector well before Xinhua issued the rules in September 2006 requiring that foreign companies operate through a Xinhua-designated agent.

In response to U.S. and EU complaints, Chinese Premier Wen Jiabao “publicly promised that the new rules would not change how foreign financial information service providers did business in China,” the USTR said in the December report.

“In 2007, working closely with the U.S. and European industries and the EC, the United States established a regular dialogue with Xinhua on this issue, securing Xinhua’s agreement to maintain the status quo until the issue can be resolved,” the USTR said in the report.

Editing by Peter Cooney