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Policy on Foreign Access to Chinese Publishing and Issuing Industries Newly Revised

Issued: November 01 2012

The Chinese government has relaxed policies regarding foreign investment in the publishing and issuing industries
With the development of cultural industries as a focal point for investment in the Chinese economy, in 2011 the Chinese government revised cultural industries policies regarding publishing and issuing to give further room for foreign investment. This essay aims to discuss current Chinese policies regarding foreign access to the publishing and issuing industries.
 
Under current policies, publishing of books, newspapers, periodicals, publishing and production of audiovisual products and electronic publications, as well as publishing marketing activities are all barred from foreign investment. However, as local Chinese support services for the publishing and issuing industries are still lacking in specialization, professional level, and technical capacity, there is large room for foreign capital, offering a “piece of the pie” for overseas investors.
 
Furthermore, many domains previously prohibited from foreign investment have now been opened up or had restrictions relaxed under the 2011 policy revision.
 
General issuing, distribution (wholesale and retail) and leasing of books, newspapers, periodicals and electronic publications have all turned from prohibiting to allowing foreign investment, without imposing requirements on business entity, holding ratios, holding, etc. In other words, foreign investors are free to set up joint ventures with Chinese investors, or independently set up foreign-funded enterprises.
 
Audio-visual product issuing has also changed from prohibiting foreign investment to allowing foreign investment; however, at present foreign investors are only permitted to set up Sino-foreign cooperative joint ventures. At the same time, policies that previously only allowed foreign investment in audio-visual product (except for films) distribution services through a Chinese-held Sino-foreign cooperative joint venture now do not require the joint venture to be Chinese held. Foreign investors are now free to hold the majority of stocks and set up a Sino-foreign cooperative joint venture in this domain.
 
Imports of books, newspapers, periodicals, audio-visual products, and electronic publication have also turned from prohibiting to allowing foreign investment. The Chinese government has also modified related industry regulations for publishing, publications, and audio-visual products, removing previous restrictions requiring all publication import-export business entities to be state-owned enterprises, complementing the aforementioned revised policies on foreign access.
 
Nevertheless, compared to Chinese domestic enterprises, the Chinese government still has considerable limitations on foreign investment in the aforementioned sectors. For example, chain retail businesses selling books, newspapers and periodicals with more than thirty outlets may only be run by Chinese-held Sino-foreign joint ventures and Sino-foreign cooperative enterprises. Chinese policy specifically emphasizes that foreign investors cannot contribute through disguised forms of equity participation. Although the Chinese government hopes to attract and make use of foreign investors’ business experience in the chain retailing of books, newspapers, and periodicals, China nevertheless is maintaining a cautious attitude in regards to further growth in scale of operations by foreign investors.

Run Ming Law Office
Suite 1806, NCI Tower
12A Jianguomenwai Avenue
Chaoyang District, Beijing,
1000022 China
T: +86 10 6559 3511
F: +86 10 6569 3512
E: liux@runminglaw.com
W: www.runminglaw.com

About the Author

Wang Yadong is an executive partner of Run Ming Law Firm, expert in dealing with intellectual property and related dispute resolution. As one of the few lawyers engaged in intellectual property protection after China reintroduced lawyers into its legal system, Wang has concentrated in this area for over two decades. Cases represented by Wang such as Louis Vuitton et al v. Silk Street Market, as well as the Yamaha and Wal-Mart “well-known trademark recognition” cases all earned landmark status within the development of Chinese intellectual property law and won wide spread media attention. He has also provided IP related services regarding trademarks, copyrights, patents, and IP strategy for such international enterprises such as Johnson & Johnson, Toyota, Getty Images and ESPN.
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