China Bans Foreign Investors From News Industry

April 2005. A new kind of television diplay shows a foreign film during an exhibition in Shanghai. Photo: AFP

HONG KONG--China has released a new set of regulations banning foreign companies from operating in the media and publishing industries, tightening existing restrictions still further in a new, and tougher, policy initiative, analysts say.

In a new policy document issued by the Propaganda Department and four other ministries, Beijing appeared to be taking a backward step from the spirit of its World Trade Organization (WTO) commitments.

"The document prohibits foreign investors from establishing or running news organizations, broadcasting stations, TV stations and film manufacturing companies, performing troupes, film imports, exports and distribution," China's state-run news agency reported.

Concerns over 'healthy development'

Foreign investors were also barred from businesses such as book and magazine publishing, wholesale and imports. Neither could they engage in book distribution, printing, advertising and culture facility reconstruction, Xinhua news agency said.

It was issued "in a bid to safeguard the country's culture industry and ensure the industry's healthy development," it said.

An official at the Ministry of Culture confirmed the new regulations, but said that her ministry was not the main force behind the new move.

"We have been asked to disseminate this more widely. But we are just one among many government departments working on this," a spokeswoman for the Cultural Ministry told RFA reporter Yan Ming.

Hong Kong observers said the rules meant in effect that no licenses would be issued by the Ministry of Culture from now on, to foreign companies wishing to set up newspapers, magazines, electronic publications, or children's cartoon production companies.

Current affairs commentator Zhou Bin said the rules represented a recent hardening in policy towards the media and publishing industries, which are already tightly controlled via the Propaganda Department, although overseas channels like CNN, the BBC and the Mandarin-language satellite channel Phoenix, are available in censored or carefully targeted form in hotels and apartment complexes housing foreigners.

Tougher policy direction

"So far we haven't had any firm restrictions on foreign media activities in China," Zhou said.

"Previously we have had foreign news organizations accused of endangering state security...but I think this represents a new level of decision-making in the Propaganda Department in response to these events," Zhou told RFA.

He said the rules went against the spirit of China's commitment gradually to open its markets under its WTO agreements.

"Never mind about the propaganda side of it; there's a trade agreement in effect under which China should open up its markets gradually. Yes, of course, they want to do it step-by-step, but that means a gradual opening up. Not getting to a certain point and stopping altogether," Zhou said.

Areas still open to foreign investors include package material printing, book and magazine distribution and artwork sales, but only as part of a joint-venture with a Chinese partner.

Foreign companies wishing to build and run theaters, cinemas, brokerage companies and to participate in transforming publishing companies into stockholding companies were also limited to joint ventures with a less than 51-percent share.

Original reporting in Mandarin by Yan Ming. RFA Mandarin service director Jennifer Chou. Produced for the Web in English by Luisetta Mudie.


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