Foreign ban on media business to be eased
Sidney Luk and Hui Yuk-min
Foreign companies will soon be allowed to participate in China's lucrative publication distribution business.
The State Press and Publication Administration will release details of a new policy relaxing the ban on foreign investment in the retail and wholesale markets soon after the Lunar New Year.
'They can either take part in Sino-foreign joint ventures or invest in mainland firms. The retail industry is to be opened first, followed by the wholesale market,' said an administration official.
'Once the details are announced, we will accept applications.'
Industry watchers said the policy would focus on taxation, licensing and pricing models of the distribution of newspapers, magazines and books.
The official said the administration had already received a number of 'informal applications' but no approvals would be given before the details were released next month.
China has tight control over media activities and foreign companies are forbidden to take part in any forms of publication distribution business, resulting in their limited presence on the mainland media scene.
Non-Chinese companies usually partner with a locally owned firm to publish magazines and periodicals with content especially for mainland readers.
As a condition of its World Trade Organisation entry, China promised to open its publication distribution market to foreign investment.
The mainland is expected to open the distribution market in cities such as Chongqing and Ningbo this year. Five years after WTO entry, the government will abolish all restrictions on quantity and range of investments.
An executive of a Hong Kong-listed company welcomed the new development.
'Some time ago, we were holding discussions with a Sichuan partner to jointly launch a business. However, we backed off after they asked for a huge price as everyone knows the mainland distribution business is a fat market,' he said.
'To my understanding, the government is opening the market step by step and eventually foreign firms can take controlling stakes in mainland companies.'