China's state-run news agency, Xinhua, literally means "New China." How ironic, given its very old business tactics.

Xinhua has released a sweeping update to a 1996 law on foreign news agencies that smacks of expropriation and may violate China's World Trade Organization commitments. The document asserts the Chinese government's right to broadly censor foreign news companies' content over a range of sensitive subjects, including "sovereignty" (read: Taiwan), "religion" (Falun Gong), or China's "interests" (Iran, Burma, Sudan). Article 12 of the new regulations gives Xinhua "the right to select the news and information released by foreign news agencies" and to "delete" offending material.

We doubt they'll succeed. No self-respecting foreign news agency will allow the Chinese government to read an article before it's published on the mainland. For financial newswires that provide real-time pricing and market information -- such as the one owned by this newspaper's parent company, Dow Jones -- censorship would be literally impossible. Chinese banks, brokers, insurers and traders -- the bulk of which get their information from foreign news companies -- also won't appreciate seeing markets move against them because they received their information late.

The real story here, then, may be Xinhua's ambitions. According to Sunday's document, "foreign news agencies" will no longer have the right to sell news directly to their customers. They'll have to ply their wares through a Chinese "agent," which presumably will require a few yuan for its trouble. The Journal reported yesterday that this "agent" will be the China Economic Information Service, which, no surprise, is appointed by Xinhua.

As recently as 1996, Xinhua tried unsuccessfully to push through censorship rules on foreign news organizations. It also tried to bar government institutions from buying news products directly from foreigners, and to fix subscription prices. After a pitched battle, Dow Jones, Reuters and other news organizations agreed to register with Xinhua on an annual basis. But they refused to submit to censorship, price setting, or government middlemen who'd take a cut of their profits.

From a business standpoint, Xinhua may now feel that it has no other option than to assert monopoly control. In the decade since the prior rules were promulgated, domestic news organizations have proliferated. Media Partners Asia Ltd. in Hong Kong estimates there are some 3,000 registered newspaper titles, and more than 9,000 magazines, not to mention proliferating blogs. In the most profitable and fast-growing segments, such as financial newswires, Xinhua has essentially been left in the dust.

But why muscle in now? Perhaps Beijing's political elite feel threatened . Freedom of information is unsettling to any authoritarian state. In recent years Beijing has alternatively creaked opened, then slammed shut, the television industry and lifestyle magazines. In recent months, the Communist government has also floated new rules restricting reporting of natural disasters and riots; increased oversight of local television broadcasters; convicted New York Times news assistant Zhao Yan and Singapore's Straits Times reporter Ching Cheong, and so on.

Xinhua is the Communist Party's mouthpiece, a symbol of what China really is. The reformers among Beijing's elites need to explain to their colleagues that returning to old habits of censorship won't protect their future.