The dispute has been brewing since September 2006 when China renewed the monopoly held by state news agency Xinhua, which prevents foreign providers of financial information services from dealing directly with Chinese clients.

China been criticised by Canada, the EU, Japan and the United States for its restrictions on foreign financial news agencies such as Bloomberg and Reuters.

"Competitive and open financial services information markets are the lifeblood of a strong financial sector, but China's rules have tipped the balance against foreign companies," EU Trade Commissioner Peter Mandelson said in a statement.

The US also said it believed the Chinese policy to be in breach of WTO rules.

"China's restrictive treatment of outside suppliers of financial information services places US and other foreign suppliers at a serious competitive disadvantage," US Trade Representative Susan Schwab said in a statement.

The lodging of the complaints is the first step in the WTO's dispute settlement process which can sometimes drag on for months if not years.

The dispute comes amid growing tensions between China and Western economies.

Last month, China suffered its first ever defeat at the WTO over a US complaint on car-part tariffs, and analysts expect many more disputes to follow.

The case on auto parts was among a growing line of complaints at the World Trade Organisation targeting China, and the victory by the US could embolden nations to take a tougher action against the trading behemoth, some experts say.

"The US could become more aggressive," said Andy Xie, an independent economist based in Shanghai. "I think Europe, now with two-way trade in favour of China, could also be more aggressive."

China, which joined the WTO in 2001, has increasingly become the focus of WTO complaints after keeping a relatively low profile in its first few years in the organisation.

The tremendous growth of its exports has provoked the ire of its major trade partners who accuse China of being a major beneficiary of the global trading system, but failing to abide by its rules.

As the EU and US have filed separate complaints, they will both have two months to attempt to reach a negotiated settlement with the Chinese.

Failing that, they can request a panel of the WTO's Dispute Settlement Body to examine the case.

It is possible that, at this stage, the two separate complaints would be heard by the same panel, sources said.

Mandelson said the Chinese rules on financial news "pose a serious obstacle to the business of EU financial information suppliers, which in turn impedes the smooth functioning and transparency of China's financial markets."

"I trust the EU and China will be able to resolve this issue amicably and to mutual benefit," Mandelson added.

Schwab said it was "not in China's interests to restrict access to the high-quality, comprehensive financial information provided by foreign service suppliers."

"We hope the filing of our request for formal WTO consultations will lead to a swift resolution of this matter," she added.

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