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Chinese Government Hits Back at WTO Media Ruling

BEIJING – China may appeal a World Trade Organisation ruling that its limits on the sale of various types of content from the US are unfair.

A spokesperson for the Ministry of Commerce said in a statement the nation “regrets the decision” and “will evaluate the WTO ruling, while not ruling out the possibility of appealing against that ruling.”

WTO announced the decision earlier this week that China’s response to a 2007 complaint by Washington fell far short of all it had asked for, and that serious obstacles remained to importing and distributing films, books, CDs and DVDs in China.

Dave Carini, managing director of Maverick China Research, said the Chinese Government’s reaction to the ruling was based partly on its hesitance to give up control over media content. The more China’s media markets are opened, the more the government will be forced to allow distribution of objectionable content, or else get into arguments with foreign media companies. Past disputes with internet companies such as Yahoo and Google over content and privacy have cast the government in a bad light at home and abroad.

“Ironically, Chinese consumers may not be interested in opening China’s media markets either, especially if the government cracks down on pirated content at the same time. Many consumers are happy with the current arrangement, where traditional content channels are restricted but plenty of pirated content is available at little or no cost,” he added.

David Wolf, CEO, Wolf Group Asia, said that even if the ruling were to come into effect, there are loopholes for the Chinese Government: “There are 1,000 ways the Chinese Government can work around this ruling; even the US government would admit this. Marketing and distribution in China is a real barrier, which is something that WTO is not going to solve,” he added.

The MPAA (Motion Picture Association of America), which represents the US movie and TV industry, welcomed the ruling.

If the changes go ahead, Ben Cavender, senior analyst the China Market Research Group added that US companies should expect only limited opportunities: “The WTO ruling will create some important opportunities for selling legal media into China, but it will still fall short in some areas. Since China will continue to cap the number of foreign films shown in theatres, the impact of the WTO ruling on the film industry may not be significant.”

But Cavender added the ruling could significantly change online distribution in China: “It does open up the possibility of companies like Apple selling media directly to consumers via platforms like iTunes. This could be a big step forward in legal online distribution of media.”

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