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WTO dismisses US claim over UnionPay monopoly

07-19-2012 10:15 BJT

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A two-year battle between the US's Visa and China's UnionPay has come to an end, with a World Trade Organization panel dismissing US claims that the Chinese payment card giant operates a monopoly. But it has also determined that China acted inconsistently with its market access commitment.

In a battle to fight for China's 1.6 billion yuan electronic payment market, the ruling does not go entirely Washington or Beijing’s way.

Li Chenggang, Director, Dept. of Treaty and Law, MOFCOM, said, "China believes UnionPay provides settlement and clearance services, and this is not part of China's WTO obligation. But the US says this service should be categorized as payment and money transmission. China has promised to open up this sector."

At a press conference on Monday, China's Ministry of Commerce welcomed that the panel rejected the US's view of UnionPay's market status at home.

The panel also backs another standpoint by China that service from foreign companies must be provided through their Chinese commercial entities instead of via cross-border approaches, the way major US card companies like Visa and MasterCard are doing business in China.

The US, meanwhile has also hailed part of the result. White House spokesman Jay Carney called the ruling a "win", as the global trade body determined that China doesn't provide equal treatment to foreign card companies.

A Visa spokesman said in a statement that the ruling may help open up the doors to the ever growing Chinese market. Experts here say China is gradually opening up its financial sector.

Li Chenggang also said, "One of the focuses of this case is how and how much we should open up. I think as long as China and the US can give an objective assessment of this WTO ruling, this sector will carry out its market access commitment in a rational and orderly manner."

According to the People's Bank of China, almost three billion cards were circulating in China by the end of last year. And 80 percent of them are co-issued by UnionPay and China's commercial banks.

While on the global front, UnionPay is picking up, to challenge VISA. The 2.3 billion cards it issued makes up nearly 30 percent of the cards in circulation globally, surpassing VISA's share. Back to the case, either country has 60 days to appeal the WTO's decision. So the battle for the ever growing market in China may rage on.


Editor:Bai Yang |Source: CNTV.CN

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