China.com surges on news of U.S.-WTO deal
TOKYO (IDG) -- Shares in China.com surged 74 percent from $43.19 to $101.19 Monday in Nasdaq trading on news of a deal between the U.S. and China over the latter's entry to the World Trade Organization (WTO).
China.com operates Chinese-language Web portals for users in China, Hong Kong and Taiwan and also owns a majority stake in the Internet advertising agency 24/7 Asia.
The stock moved on news that, as part of the WTO deal, China will allow foreign companies to take a 49 percent, and eventually 50 percent, stake in Internet and telecommunications companies.
In the past few months, Chinese officials have been stating that foreign investment in the Internet sector is officially banned and any ventures started so far would be corrected.
Such moves would not hit China.com directly because it is incorporated in the Cayman Islands and headquartered in Hong Kong, but would shut the door on further involvement in the Chinese Internet market by China.com.
China's state-run news agency, Xinhua, holds a 10.9 percent stake in China.com.
The deal announced Monday by the U.S. and China is only the first step toward China's admission into the WTO. Notably, it must also strike a deal with the European Union before it can be admitted.
Martyn Williams is a Tokyo correspondent for the IDG News Service.
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