China will encourage the growth of domestic financial information providers to break the stranglehold of foreign agencies, including Thomson Reuters and Bloomberg News, officials said.

But they said that the market will still be open to overseas providers, in order to continue to provide a competitive environment that will maximize benefits to end users.

Shanghai Great Wisdom Co Ltd, a domestic financial information provider, takes part in the Shanghai Financial Planning Expo in November last year.?[Photo/China Daily]

China will support local companies in the sector because financial information services have become indispensable tools for many domestic companies and financial institutions to operate in the global market, said Cui Yuying, deputy head of the Information Office of the State Council, at the 2012 Financial Information Services Seminar on Thursday in Suzhou, Jiangsu province.

As many as 38 overseas financial information providers have been allowed to operate in China, Cui said.

Since 2009, China has been giving approvals to foreign financial information providers to operate or invest in China, where the market is worth nearly $1 billion, which is about 4 percent of the global market.

The market volume of financial information services is expected to expand to more than $10 billion soon, with users growing not only in developed coastal cities, but also in second- and third-tier cities, said Cui.

Many budding domestic financial information providers operating out of Beijing or Shanghai are gearing up to grab a larger slice of the market, industry sources said.

But they are expected to face an uphill battle.

The leading foreign agencies have already positioned themselves to meet future challenges by setting up local database centers. Many of them are already providing information and data in Chinese and English.

For instance, Thomson Reuters - one of the largest providers in China by revenue - set up Reuters Technology (China) Ltd in 2006.

When the company started, it had only 200 employees, but now the number has climbed to more than 1,000, said Lu Jiangxia, director of the department of government and legal affairs of Thomson Reuters China.

"China's domestic financial information providers have also seen improvements in the past few years and many aspire to play more significant roles in the global financial market", said Lu Guangjin, head of the eighth bureau of the Information Office of the State Council.

China doesn't have an independent credit ratings agency with globally used products, and most of China's domestic data-feed service providers focus on local market information, and provide only a limited amount of global market data.

Since domestic financial information providers don't offer global information products and services, users in China have to turn to overseas providers, said Dong Liang, deputy head of the general office's information department at China Petrochemical Corp.

Overseas information providers have advantages as they have a long history and have developed mature products and services, said Tan Shaowei, deputy head of public relationships at China International Capital Corp Ltd. "But domestic providers are also making efforts to meet users' demands," said Tan.

They are more willing to offer on-site technical support and immediately respond to after-sales inquiries, said Tan.

Zhang Yan, general manager of McGraw-Hill Financial Asia Pacific LLC's China operations, said that stricter supervision of intellectual property rights of financial information will help the industry develop in China.

As China increasingly becomes integrated with global financial markets, Chinese users have more demands and higher requirements for the variety and quality of financial information, said Cui.

[email protected]