WTO: China discriminates against foreign card companies

The World Trade Organisation has ruled that China discriminates against foreign credit-card and debit-card providers.

A panel of the trade body said China maintains a monopoly on yuan-denominated payment cards which breaks WTO rules.

Only one company, China UnionPay, is allowed to process domestic currency transactions.

This limits foreign providers such as Visa and Mastercard.

There is a 60-day period in which either side can appeal against the ruling.

Greater participation

The Obama administration first lodged the complaint in 2010.

US companies have been trying to get greater access to the massive China market.

Currently, they can only issue cards in partnership with Chinese banks and China UnionPay.

Visa said in a statement that the company is “hopeful that this ruling will pave the way for international payment companies to participate in the domestic payments marketplace in China”.

Political battle

The decision by the WTO is being hailed as a “win” by the US government. The trade gap with China has become a campaign issue in the upcoming elections.

“Today’s win highlights that tackling unfair Chinese trade practices has been a priority of this president,” said Jay Carney, White House press secretary.

Tim Reif from the US Trade Representative‘s office said the ruling would support about 6,000 jobs if it goes through.

However, the WTO did not agree with all the claims raised by the United States.

The panel ruled that China UnionPay had a monopoly on yuan payment cards issued and used in China, but stopped short of saying it was an “across-the-board monopoly supplier” for all transactions made in local currency.

Mr Reif, however, said China would still have to fix the discrimination in the system.

BBC News
 


Categories: Finance & Economy

Tags: , , , , , , ,

3 replies

Trackbacks

  1. July 17 2012 China Daily Mail Headlines « Craig Hill
  2. China breaches and abuses WTO rules, USA says « China Daily Mail
  3. China’s protectionism, unpredictable laws, unreliable suppliers and intimidation tactics create uncertainty for foreign companies | China Daily Mail

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