According to government document published by Xinhua News Agency on August 2, foreign investors can only build and operate cinemas and performing arts agencies conditionally, and are banned from setting up or running news organizations in China, and no new licenses will be issued for foreign TV channels.

The document was jointly worked out by five ministries including the Ministry of Culture and State Administration of Radio, Film and Television, in a bid to safeguard the county's culture industry and ensure the industry's healthy development.

The document prohibits foreign investors from establishing or running news organizations, broadcasting stations, TV stations and film manufacturing companies, performing troupes, and film import, export and distribution businesses.

The new ruling also forbids foreign investors from undertaking businesses such as book and magazine publishing, wholesale and imports. Neither can foreign investors enter the publication field under the guise of book distribution, printing, advertising and cultural facility reconstruction.

Meanwhile the government lowered the admission standards in certain areas. Foreigners can build Chinese-foreign cooperative enterprises and Chinese-foreign joint ventures of packaged material printing, book and magazine distribution and artwork sales.

But it stipulates that the Chinese partner's investment share should not be lower than 51 percent and the Chinese party should take the leading role in the running of the business. Only by doing so can foreign partners build and run theaters, cinemas, and brokerage companies.

The document also states that no new licenses will be issued for foreign TV channels.

China "will not allow another foreign satellite TV station to have landing rights in the country," Xinhua said, citing the rules from domestic regulators.

Regulators said the new rules were designed to strengthen any oversight by the industry while the government "finds ways to regulate (existing foreign media in the market) to prevent harmful programs from being broadcast."

Foreign players with mass broadcasting rights now in China include Rupert Murdoch's News Corp., Viacom's MTV and News Corp.-- backed Phoenix Satellite Television Co. Ltd., all of which broadcast in Guangdong.

Tom Group Ltd., controlled by Hong Kong's richest businessman, Li Ka-shing, also owns a station with mass broadcast rights in Guangdong with Time Warner Inc.

Overseas players with limited broadcasting rights in the market include Time Warner's CNN and the BBC news channels, and various channels owned by News Corp.'s Star TV subsidiary.

The ban on new stations in the market is expected to have the most immediate impact on Disney, which applied for a limited broadcasting license in 2003 and is one of the few major media companies in the market without a channel, observers said.

Viacom's Nickelodeon children's channel also applied for a limited broadcasting license in 2003. Their application could also be affected.

Disney and Viacom had no immediate comment.

China's television and film regulator announced in April that all media companies would be limited to a single programming joint venture, in a move that appeared directed at Viacom, which had announced several partnerships.

Last month, the regulator followed with more regulations banning city and provincial broadcasters from cooperating with foreign media companies.

(Xinhua News Agency, Shenzhen Daily August 5, 2005)
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