China is expected to officially open up its book, newspaper and magazine distribution market to overseas investment later this year, high-ranking officials said on Tuesday.

Niu Bingjie, deputy director of the General Administration of Press and Publications, said China plans to publish and implement new regulations authorizing the entry of overseas investment into the distribution market on the Chinese mainland during the first quarter of this year.

"We will accept and handle applications from overseas investors" to invest in the book, newspaper and magazine distribution sector once the regulation goes into effect, Niu said in an interview with Xinhua.

He said overseas investors, including those from Hong Kong, Taiwan and Macao, will be allowed to invest in the sector in Chongqing, Ningbo and all provincial capitals on the Chinese mainland, in accordance with its commitments as a member of the World Trade Organization (WTO).

China approved the entry of overseas investment in Beijing, Shanghai, Tianjin, Guangzhou, Dalian, Qingdao, and five special economic zones in the southern part of the country "on a trial basis" during its first year as a WTO member in compliance with its WTO commitment to open the distribution market of books, newspapers and magazines.

"China will follow the international practice of the majority of WTO members to open up its book, newspaper and magazine distribution market to overseas investors but will allow no overseas investment in the editing sector," said the deputy director.

"A few of the 140 WTO members have pledged only limited access to overseas investors in their respective editing sectors."

In keeping with its WTO commitments, China should open its entire book, newspaper and magazine wholesale and retail sector to overseas investment during its third year of WTO membership and should also lift all restrictions limiting the number of overseas-funded distribution companies, geographic locations and share-holding rights.

"The books, newspapers and magazines referred to above are primarily those published on the Chinese mainland," said the deputy director.

Over 60 overseas companies have set up offices on the Chinese mainland with the intention of investing in the publication distribution business, he said.

"Those who have cooperated closely with their Chinese counterparts and who are familiar with the Chinese market are likely to be the first to have their applications approved, since they have prepared themselves (for entry)."

The open-up will bring both challenges and opportunities to the Chinese domestic news and publication industry, said the deputy director.

In order to improve the market competitiveness of state-owned news and publication businesses, he said China has set up a number of state-owned distribution groups and has also launched reforms to improve the operational mechanisms, labor and human resources systems and to delegate more decision-making power to state-owned news and publication businesses.

A diversified investment and management pattern has developed over the past several years, he said.

Private publication distribution businesses on the Chinese mainland now number over 40,000, four times as many as their state-owned competitors, while their market shares are about 50 percent when textbooks are excluded from the state-owned sector's business.

To create a better environment for investors from home and abroad, China has revised its laws and regulations on copyright and publications and has rectified irregularities in the publications distribution sector.

Experts said the open-up of the publication distribution sector will give Chinese readers more choices along with problems, and relevant government departments should improve its regulations in the sector according to law.

(Xinhua News Agency January 23, 2003)