BEIJING - The Chinese
government's move to allow Chinese companies to enter
joint broadcasting production arrangements with foreign
firms is not only good news to international investors,
but to the country's media industry development,
executives and analysts say.
The State
Administration of Radio, Film and TV and the Ministry of
Commerce released a temporary regulation on Wednesday
saying that foreign broadcasters can form joint or
co-operative companies with Chinese partners in China
starting next Sunday.
Before, only 30 foreign
broadcasters had been allowed to provide programmes in
the Pearl River Delta in South China and some luxurious
hotels and residential areas, or could sell programes to
local TV channels. The new regulation will offer an
opportunity for them to produce entertainment, cartoons,
and other programms except for current affairs-related
content, reported China Daily on Friday.
The
joint ventures will be regarded as domestic production
companies and have the same rights.
"This is a
huge step in the reform of China's TV and radio
industry," said Li Yifei, president of Viacom China.
In March, the US media giant Viacom said it
would form the first joint venture in cartoon programe
production with the Shanghai Media Group.
Li
said the preparation of the joint venture is well under
way and Viacom will consider expanding the model to
other content. He said he has been in discussions with
several other TV channels in China.
Yu Guoming,
a media professor at Renmin University of China and a
senior industry analyst, said the opening up will bring
some pressure to purely domestic production companies,
and will be helpful in introducing competition into the
somewhat monopolized media industry and lead to faster
development.
"The weakest point for Chinese
producers is not lack of capital, but building a healthy
industrial base," said Yu.
Li with Viacom also
believes that the introduction of foreign capital into
broadcasting production companies will bring copy
rights, production expertise, technologies and
management know-how to Chinese firms.
She said
another benefit for the country's TV industry will be to
bring better content to TV cable-based broadband
network.
Chinese TV and telecom network
operators are competing to attract subscribers to their
own broadband networks and the former is in a
disadvantaged position, but with enriched content, it
might change the scenario.
Despite opening the
gate to foreign participants, the regulation also
imposes strict restrictions on foreign investors.
The regulation says that among stake holders of
joint ventures, there must be one single Chinese party
owning at least a 51% stake.
While Chinese
companies are allowed to invest with fixed and
intangible assets, foreign investors must pay in cash.
(Asia Pulse/XIC)
Nov 20, 2004
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