China Ends Restrictions on Foreign Suppliers of Financial Information: Zetland

Financial consultancy Zetland reports on its website that the government in Beijing has withdrawn restrictions on foreign companies that provide information services.

Hong Kong, Special Administrative Region of China (Press Release) December 30, 2008 -- Hong Kong, 15 December 2001 – The Chinese government has ended restrictions on foreign firms that supply financial information services, a move likely to spur growth in the industry, Zetland Fiduciary Group reports.

United States Trade Representative Susan C. Schwab announced on Nov. 18, 2008 that China agreed to eliminate discriminatory restrictions on how U.S. and other foreign suppliers of financial information services do business in China, which the United States challenged in a World Trade Organization (WTO) dispute brought earlier this year.

“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,” said Schwab.

China’s commitments under the Memorandum of Understanding address all the issues under the General Agreement on Trade in Services (GATS) and China’s WTO Accession Protocol that the United States had raised at the WTO.

China said it will designate an independent regulator that will have no conflicts of interest with the companies it is regulating, and will use a fair and transparent approach to licensing, as required under China’s WTO Protocol obligations.

Western financial officials say the move is critical in providing a level playing field for businesses in China.

China also agreed to eliminate the requirement that U.S. companies must use an agent to do business, allowing them to make their own independent business decisions on how they want to structure their operations.

As well, China will also limit requests for information to that which is only relevant to regulatory functions. Beijing agreed to ensure the confidentiality of that information, and protect against its misuse.

“This is another step for China to open up her massive domestic market,” Hong Kong-based Zetland commented. “Earlier in the year, the Chinese government took away restrictions on 11 special business fields and allowed foreign entities to enter those approved industries.”

The report was carried on the website of Zetland Fiduciary Group Limited. Each month Zetland offers an array of analysis and financial reporting.
Zetland was established in 1987 and has offices in Seychelles, Singapore, Tokyo, Belize, Geneva, New Zealand and Shanghai.

About Zetland:
The Zetland Financial Group - http://www.zetland.biz - provides the offshore investor with fiduciary Services, investment management and corporate advisory services, offering personal service and professional advice with total confidentiality.

For more information:
Jason Weatherhead
Zetland
jasonw@zetland.biz
+852 2525 7718

Tags: foreign companies in China, restrictions on foreign companies, zetland, financial company Hong Kong, investment management

Zetland: China-US Relationship Key To Staving Off Global Financial Meltdown

Hong Kong, 15 December, 2008 – The world’s economic crisis has analysts worried but financial consultancy Zetland reports the United States and China can lessen the financial turmoil by working together.

The problem is, however, both economic powerhouses aren’t on the same page when it comes to a fiscal response to the crisis. A growing number of United States policy advisers argue only China, with its huge hoard of central bank reserves, can supply the U.S. Treasury with the new funding it needs to make up for the loss of domestic demand.

China, however, appears to be taking a different course and may pay for its own domestic spending first to fight off a sharp economic slowdown at home.

Demand destruction in China is working its way through the economy there as well. China is not powerful enough to prop up U.S. consumer spending and it is far more efficient for China to use its reserves to help transition the economy for the future, rather than use its reserves to buy U.S. government securities to stimulate the U.S. economy, says a commentary by the South China Morning Post’s Michael Pettis, carried on Zetland’s website.

China’s US$2 trillion in reserves cannot be lent to the US, it says. The money held by the People’s Bank of China has already been lent to the American, European and Japanese government. Only new reserves can be lent, and the only way for China to accumulate new reserves is by continuing to run large trade surpluses with the U.S.

If China were to stop lending money to the U.S., its trade surplus with Washington would disappear, something Beijing is desperate to avoid.

The commentary concludes the root of the economic crisis has been the capital and trade relationship between the U.S. and China, and if policymakers try to design policy without understanding these links, the outcome will be misguided policy, collapsing trade, and a worse economic outcome for everyone.

The report on Zetland Financial Group’s website is one of many offered each month. Zetland provides business and financial consultancy internationally and in the Asia region with an emphasis on operations in China.

Zetland was established in 1987 and has offices in Seychelles, Singapore, Tokyo, Belize, Geneva, New Zealand and Shanghai.

Zetland's professional consultants tackle a range of business issues – from investment opportunities to jurisdictional changes in legal, tax and accounting matters – for clients around the globe.

About Zetland:

The Zetland Financial Group - http://www.zetland.biz - provides the offshore investor with fiduciary Services, investment management and corporate advisory services, offering personal service and professional advice with total confidentiality.

For more information:
Jason Weatherhead
Zetland
jasonw@zetland.biz
+852 2525 7718

Tags: Zetland Fiduciary Group, China-US Relationship, economic crisis, People’s Bank of China, Chinese trade surplus, global economic crisis