China to reform publishing sector by 2010
China has signalled it is to restructure the country's publishing industry, acknowledging for the first time the legal existence of private publishers and encouraging the partial privatization of its unwieldy state-run publishing houses.
Northern United Publishing and Media (SH:601999) rose 7.40 percent on the news. Guangdong China Sunshine Media Co. (SZ:002181) surged 8.78 percent.
In Hong Kong, Beijing Media Corporation (HK:1000) rose 6.61 percent in Hong Kong; Media Chinese International Limited (HK:0685) climbed 7.27 percent; Intelli-Media Group (HK:8173) rose 5.17 percent; Hong Kong Economic Times Holdings (HK:0423) surged 16.67 percent; Seec Media Group (HK: 0205) climbed 10 percent.
China's state-run publishers currently make an assured income by selling “shuhao” (ISBN numbers) and “kanhao” (ISSN numbers) to, until-now, unofficial private publishing houses, who take on the commercial risk. The state-run publisher is ahouldered with just the political risk of the content, and must censor material before it is published.
The policy announcement made by the General Administration of Press and Publication (GAPP) makes clear that censors will continue to control what appears in print.
In the current downturn both state-run and private companies have suffered considerably and Beijing wants state-run publishers to become more efficient and commercial.
It will encourage mergers between private and public sectors to produce synergies and, as the GAPP announcement says: "Encourage and support non-state-owned capital in various formed entering permitted areas."
The reforms are to be carried out by 2010 and are hoped to produce seven publishing giants with annual revenues of more than RMB10 billion within five years.
The announcement did not mention foreign players. Many multi-nationals, such as Pearson (LSE:PSON), have already established businesses in China – and will be waiting to see if detailed proposals will allow them to expand further in the highly sensitive sector.
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