HONG KONG—A ruling by the World Trade Organization (WTO) may aid U.S. firms looking to enter the Chinese market but probably won't loosen Beijing's control over content that enters the country from the United States, experts say.
The WTO ordered Wednesday that Beijing end curbs forcing U.S. copyright owners to deal solely with state-run distribution companies, which drives up logistical costs.
China’s government currently holds a monopoly on distribution of a large range of media content, and the decision aims to level the playing field by allowing other companies to get into the game.
The ruling is expected to aid filmmakers, musicians, and others who have otherwise been forced to market their products to a narrow segment of the country’s market at prices considered unaffordable by most Chinese.
U.S. Trade Representative Ron Kirk said the decision would greatly assist American companies working to distribute entertainment products in China, “so that legitimate American products can get to market and beat out the pirates."
"To me, that is a clear win. We believe that this report will help pave the way toward more open trade between China and America," he said.
Chinese Commerce Ministry spokesman Yao Jian regretted the ruling, saying Beijing has always fulfilled obligations set by the trade governing body on issues related to the market entrance permission of publication products and suggesting an appeal was possible.
China joined the WTO in 2001 and pledged to offer a more open access to mass-produced art from abroad, but a panel that reviewed the case said Beijing had broken that promise and was discriminating against imported goods.
Beijing allows only 20 foreign films into the country each year, and the studios that produce them are forced to hand over a large percentage of box office proceeds as well as high fees for film prints and other distribution costs to state-run distributor China Film Group Corp.
But while the WTO ruling aims to introduce more competition into China’s film distribution industry, it will allow Beijing to maintain two state-run movie theater companies and continue to select the films it deems appropriate for Chinese viewers each year.
Beijing is not bound by the WTO to change its laws but is unlikely to disregard the ruling as it has a vested interest in membership.
Still, some experts say the measures it takes may fail to satisfy U.S. trade officials and could spark retaliatory trade restrictions.
Curbs in place
Xia Yeliang, associate professor of economics at Beijing University, said that although the WTO has ruled that China must open its market to American audio and video products, China is likely to keep curbs in place.
“For China, the main reason to limit the import of foreign publications is out of ideological concerns,” Xia said.
He added that China has maintained tight control over foreign films, audio/video products, books, and other publications for years, regardless of whether they are of domestic or foreign origin.
“Although China pledged to open its markets when it joined the WTO, Beijing never loosened its control over ideology and its restrictions in this area are now even tighter. Therefore I don’t think China would act in accordance with international norms,” Xia said.
Zan Aizong, a freelancer based in China’s eastern Zhejiang province, stressed that the import of foreign publications and audio-video products is a monopolized business controlled by only a few state-run enterprises.
“In addition to political censorship, economic interests contribute another factor,” Zan said.
He said that if restrictions on importing foreign films, publications, and audio/video products are lifted, private companies could import American as well as Hong Kong and Taiwanese products.
“State-controlled enterprises could collapse. So to protect their existing interests, they want to maintain this kind of monopoly,” he said.
Zan added that China was unlikely to back down because of the mistrust with which it views foreign publications.
“China always puts politics before economic interests. It may take a long time for China to open its market in this area,” he said.
Original reporting by Yan Xiu for RFA’s Mandarin service. Mandarin service director: Jennifer Chou. Translation by Feng Xiaoming. Written for the Web in English by Joshua Lipes. Edited by Sarah Jackson-Han.