REUTERS and Bloomberg spent yesterday urgently seeking clarification of the Chinese Government’s decision to clamp down on the activities of foreign news agencies in the communist country.

The sudden change of rule bans foreign news agencies distributing their content except through Xinhua, the state news agency, but is not clear if the direct sale of terminals to Chinese banks will be banned.

The two companies were considering how to respond to the curbs, as they sought further clarification from Xinhua. An attempt to restrain terminal sales in China would represent a blow for both companies’ hopes for growth.

Reuters’s Chinese business grew by 17 per cent in the first half, although the British company did not disclose how much turnover it had generated from the country. Its overall Asian business accounted for £230 million in the six months to June, up 7 per cent.

Xinhua is believed to be keen to break into the financial data market, because it sees the area as an opportunity to generate substantial profits. To succeed it may have to shut out the established global players, who had believed that China was a big opportunity to expand.

By taking control of news distribution from Reuters, Bloomberg and other wire services such as Dow Jones and Associated Press, Xinhua is able to censor content, putting the news agencies in the difficult position of deciding whether to co-operate.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax