Media and Advertising

Media regulation in China: Closed open closed open for business

state_council.jpg
The State Council discusses how to ensure China's media stays mediocre

Last week new 'rules' restricting foreign investment in cultural products and media in China were widely reported in the Chinese and foreign press, with many commentators calling the new rules a clamp down.

On Friday, Danwei noted that these new 'rules', issued by a handful of different Chinese government bureaus, were not called laws, rules or regulations, but rather mere 'suggestions' (see link at bottom of this post).

Yesterday Xinhua published a report on the "State Council's several Decisions on guiding non-public capital into the cultural industry."

There is nothing new in the Decisions — they seem to be an attempt to codify what is already standard practice. They allow Chinese private companies (called 'funds' and 'investment' in the State Council document) much more leeway than foreign investors. However all methods of information transmission are restricted: the state must own 51% or more of any such operation. Information transmission includes: book and periodical publishing, running radio or TV stations, operating regular TV programming, and operating news websites.

So what's really going on?

It appears that the intention of these Decisions is to encourage private investment to rescue moribund state-owned media and cultural enterprises, but not to allow anyone to get control of any powerful information distribution systems. These Decisions will help ensure that China's media and cultural industries continue to grow, but also continue to remain mediocre.

Below is a rough translation of the "State Council's Decisions on private funds in cultural industries":

1. Encourage and support private funds entering the following areas:
Performing arts troupes, performance venues, museums and exhibition halls, Internet service venues, art education and training, art and cultural exchanges, travel cultural services, cultural entertainment, art object management, cartoons and Internet games, advertising, production and distribution of films and TV programs, broadcast technology development, movie theaters and movie theater cables (i.e. digital delivery of movies to cinemas), film screenings in rural areas, retail and distribution of books and periodicals, retail and distribution of audio and video products, printing of packaging and decorative printed items.

2. Encourage and support private funds engaged in the export of cultural products and services.

3. Encourage and support private funds participating in the reconstructing of state-owned work units that run performance troupes and venues; private funds can own controlling stakes in such companies.

4. It is permissible for private funds to enter the areas of publication printing, production of blank and recorded optic disks and other such cultural industries.

5. Private funds can participate in the following types of state-owned enterprise: publication printing and distribution, advertising and distribution for news publications, production of programs about music, technology, sports and entertainment for radio and TV stations, production, and distribution and screening of movies. The above mentioned cultural enterprises must be at least 51% state-owned.

6. Private funds can construct and operate cable TV networks, and participate in establishing or digitalizing cable TV networks, but the above mentioned cultural enterprises must be at least 51% state-owned. Private funds can own controlling stakes in parts of cable TV networks that serve communities [e.g. apartment complexes].

7. Private funds can set up advertising services outdoors, on buildings, transportation, in shops, and on screens, and in hotels that meet requirements, may provide audio-visual programming services. The relevant departments must strictly enforce scope and quality of such services and strengthen day to day supervision of them.

8. Private funds entering cultural industries must obey the relevant existing regulations, of which the 5th, 6th and 7th clauses which specify that approvals are necessary from the relevant departments. The examination and approval of relevant investments must be completed according to the regulations of the State Council's Decisions on Investment for Structural Reform (National Law (2004) No. 20). The approval process must be strictly examined and perfected to ensure the orderly development of cultural industries and protect the lawful rights and interests of businesses, and prohibit operations which are illegal or contrary to regulations. Privately funded cultural enterprises enjoy the same treatment as state-owned enterprises during the application, approval and funding processes.

9. Private funds are not allowed to invest in, establish or operate news agencies, newspapers, publishing companies, radio stations or channels, TV stations or channels, broadcast relay stations, broadcast satellites, satellite ground stations, transfer stations, microwave stations, monitoring stations, cable TV network backbones etc.; they are not allowed to use information networks to develop audio-visual programming services and news websites; they are not allowed to operate editorial sections of newspapers, TV broadcast frequencies and programs, operate books and newspaper publishing, movies and TV, audio-visual productions and such cultural product import operations; they are not allowed to operate state-owned museums.

10. The Ministry of Culture, The State Administration of Radio, Film and TV (SARFT), and the General Administration of Press and Publications (GAPP) must, on the basis of these Decisions, establish concrete measures that make explicit the list of investment projects that are encouraged, permissible, restricted and prohibited respectively, and guide the fast healthy development of cultural enterprises.

Each district and department must arrange, sort out and revise regulations that conflict with these Decisions. Foreign investment entering cultural industries must be carried out in accordance with the relevant laws and regulations.

Links and Sources
China Media Timeline
Major media events over the last three decades
Danwei Model Workers
The latest recommended blogs and new media
laomo2010x80.jpg
From 2008
Front Page of the Day
A different newspaper every weekday
From the Vault
Classic Danwei posts
+ Culture and corporate propaganda in Soho Xiaobao (2007.11): Mid-2007 issues of Soho Xiaobao (SOHO小报), illustrating the complicated identity of in-house magazines run by real estate companies.
+ Internet executives complain about excessive Net censorship (2010.03): Internet executives complain about excessive Net censorship at an officially sanctioned meeting in Shenzhen.
+ Crowd-sourced cheating on the 2010 gaokao (2010.06): A student in Sichuan seeks help with the ancient Chinese section of this year's college entrance exam -- while the test is going on!
Danwei Archives