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Chinese News Agency IPO May Pressure Foreign Media

Stocks in this article: TRI NWSA

Incidentally, the protests this month against editorial control in China had nothing to do with Xinhua. Those took place at Southern Weekend, a domestic newspaper known for pushing the limits. Xinhua does not push limits.

But it does push against borders. It pumps out news in English, Spanish, Russian and other major world languages. Countries without a strong international media presence may welcome Xinhua, not just quotes from it seen in the Western press.

"I think that China's state-funded media expansion abroad will start to win readers and viewers in developing countries that are poorly served by international news media," says Jeremy Goldkorn, founder of the Chinese media blog Danwei.

But even media-saturated audiences in developed countries may take Xinhuanet more seriously than their overseas rivals in evaluating certain types of news.

Chinese government orders and news releases carried by Beijing's own media will be less diluted via Xinhua by comments from analysts and why-you-should-care paragraphs inserted by journalists. That lack of interpretation may appeal to educated readers who just want official facts so they can form their own opinions.

News about listed, state-run Chinese companies may also be taken more seriously if reported by the media organizations that are part of the same big family. Audiences would presume the stories to be official and as such accurate, though in most cases biased toward the company.

Companies already turn first to Chinese media (scoop for the local guy), knowing they would get a glowing report instead of a critical one.

"I think Chinese news sources still have to prove their worth to the world, but if only Chinese news sources are covering certain topics or companies, maybe that would be the only choice," Goldkorn says.

Similar home-court advantages have given staying power to other Asian media outlets, such as Kyodo News of Japan and Yonhap News of South Korea. Audiences outside Japan and South Korea, including other international media, consider both to be about the most authoritative sources of news about their home bases. Consider how often the Western media cite Kyodo, Yonhap -- or Xinhua.

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