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As discussed in the Distribution Services section above, in 2011, China removed various importation and distribution restrictions affecting books, newspapers, journals, sound recordings and DVDs in response to a successful WTO case brought by the United States. China also entered into an MOU with the United States in 2012 providing increased and improved market access for imported theatrical films. At the same time, China’s regulation of other audiovisual and related services, including services associated with theatres (where China made a WTO commitment to allow 49 percent foreign ownership) as well as television and radio stations, production and programming (for which China made no commitments), has remained highly restricted.
With regard to theatres, China’s ownership restrictions have made it unattractive for foreign companies to enter into Chinese-foreign joint ventures. Currently, no U.S. company is involved in the ownership or operation of a Chinese theatre. In addition, China prohibits foreign investment in the production and distribution of theatrical films. In contrast, all of these sectors in the United States are open to foreign investment, and Chinese companies own both large film production companies and film distributors in the United States.
The restrictions applicable to China’s television and radio sectors are myriad. China does not permit private capital, whether domestic or foreign, to be used to establish or operate a television station or a radio station. It similarly closes private capital out of radio and television signal broadcasting and relay stations, satellite networks and backbone networks. For television production, Chinese-foreign joint ventures must have a minimum capital requirement of RMB 2 million (approximately $330,000), foreign ownership is capped at 49 percent, and two-thirds of the programs of the joint venture must have Chinese themes.
With regard to television programming generally, China imposes highly restrictive quotas. The Administrative Measures on the Import and Broadcast of Extraterritorial Television Programs, effective since 2004, restricts foreign television drama and film programming to no more than 25
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