New rules governing the foreign-invested book, newspaper and
magazine distributor sector were published yesterday and will take
effect on May 1.
The new rules, issued by the State Press and Publication
Administration (SPPA), provide specific guidance on the
establishment of foreign-funded book, newspaper and magazine
distributors.
In
accordance with its World Trade Organization commitments, China
opened its book, newspaper and magazine retail business to foreign
investors in December last year, although this is still limited to
certain areas of the country.
An
official from the SPPA distribution department said it will accept
and handle applications from overseas investors to invest in the
book, newspaper and magazine distribution sector once the rules go
into effect.
More than 60 overseas companies have set up offices on the Chinese
mainland with the intention of investing in the publications
distribution sector. They are likely to be the first to have their
applications approved.
The rules set out requirements on application procedures,
registered capital, and business scale of these foreign-invested
distributors.
A
registered capital of 5 million yuan (US$604,000) is needed for
retailing companies and 30 million yuan (US$3.62 million) is
required for wholesale enterprises.
The regulations regarding wholesale companies will take effect on
December 1, 2004, when the sector is opened to foreign investors,
the official said.
"In those areas, policies have become clearer, increasing the
investment certainty," said Zhao Xiaobing, president of Global
China (Beijing) Media Consulting Co.
Distribution of newspapers and magazines will become the most
profitable investment area in China's media industry, Zhao
predicted.
Wang Gang, an official from Xinhua Bookstores Co, said the
opening-up policy may bring challenges to the publications
industry.
The distribution sector is important to the whole publications
industry, he said, adding that if domestic distributors perform
well in the next few years, the publication enterprises could
compete with big multinationals. Otherwise, they will be unable to
cope.
The sector has been monopolized by the government for decades
through the nationwide distribution networks of China Post and
Xinhua Bookstores.
In
response, China is planning to develop a number of State-owned
distribution groups, giant publications enterprises with chain
operations and modern logistics services to improve its market
competitiveness, Wang said.
(China Daily April 4, 2003)