In effect, the edict puts Xinhua, the world's unnewsiest news agency, in charge of agencies normally beyond the grasp of cadre communists -- even in Hong Kong, Macau and, Taiwan. On this basis, the next time Hong Kong billionaire Li Ka-shing did a deal with state authorities that relieved McDonald's Corp. or any other legal entity of its contractual rights (as happened last year), the story would have to be vetted by Xinhua. Xinhua already made information-control history when it established a service that both disseminates outgoing commercial data on the Internet and filters any incoming information. Although the State Council's directive gives Xinhua control over strictly "economic" news, the government body has licensed Xinhua to control everything, effectively ruling out reliable news. Stock markets and business plans are driven by market forces -- even in highly manipulated China. Even when one is tempted to think business is market driven, the whims of China's central controllers can skew everything -- as merchandisers in the casual wear clothing market found when that suddenly dried up because the bosses on top didn't like then Giordano clothing store chairman Jimmy Lai. The State Council's directive will in all likelihood force the New York Times, Reuters and other news organizations to reassess their operations in territories Xinhua is authorized to control. Controls go beyond editorial conventions. According to Xinhua, foreign wire services will not be allowed to increase subscribers in China "directly nor by ways of establishing joint ventures, solely funded companies or agents." The Xinhua report said that foreign news providers "will be punished in accordance with the law if their released information to Chinese users contains anything forbidden by Chinese laws and regulations, or slanders or jeopardizes the national interests of China." Jeopardizing the national interest of China is now taken to mean jeopardizing the interests of the communist party, or the roughly 5% of the population controlling the country from "the barrel of a gun," to borrow from Mao Zedong. Agencies only learned of the new rules Tuesday night when Xinhua, skirting the usual practice of circulating advisories on operational changes internally, simply put the story on the wire. One Hong Kong agency man told Newsbytes: "We always knew writing stories from China was a problem. Now you have to wonder if we'll be able to send stories from Hong Kong, without having to pass them by Xinhua for approval. The directive indicates stories will have to pass through Xinhua first -- pointing to a major evacuation of news services, and technology vendors who handle them. (Nigel Armstrong & I.T. Daily/19960117)