Ming Pao Enterprise Corp., publisher of a major newspaper in Hong Kong, is reportedly close to announcing the launch of its business in the mainland, distributing three of its magazines in China through a partner. The Global China Group, publisher of another Hong Kong newspaper, Sing Tao, opened the door to distribute its magazines in China by forming a joint venture with the Chinese government-owned People's Daily Press.

With the same scheme in mind, such international media corporations as Germany's Bertelsmann AG, American media giants Viacom and Time Warner, and Hong Kong's Phoenix TV, are penetrating the Chinese market.

Although Hong Kong has been part of China's territory since 1997, it is still subject to most of the same business and trade restrictions that foreign countries face.

Last May China allowed foreign companies to invest in retail newspapers, magazines and books, as promised to the World Trade Organization, as long as they have a Chinese joint-venture partner. It is expected to allow foreign wholesalers in the newspaper, magazine and book sector by the end of this year.

Reportedly, television programs and movies made by foreign companies will be able to air in China as long as the companies find a domestic partner. To meet the challenges from these market-oriented reforms, the country's biggest network, China Central Television, recently announced that it would spin off its production and non-broadcasting buSinesses.

Foreign investors like Ming Pao Enterprise are not sitting around waiting for the rules to change. To play the game now, the rule is they must find a partner in China and get a license to retail their products. Only domestic companies are entitled to hold licenses to carry media products.

"As China is deregulating the media market, the trend of joint ventures or mergers between domestic companies and foreign companies is rapidly taking shape," Zhao Xiaobing, president of Global China (Beijing) Media Consulting Co., told United Press International. He said there will be more and more merger deals like that with Ming Pao.

Chinese scholars have called the media market one of China's last wildly profitable fields. There were about 2000 television stations across the country in 2001, airing 989,173 hours of programs. By comparison, there were only 91,572 hours of programs in 1990.

In print mEdia, the number of newspapers jumped to 2,137 in 2002 from 186 in 1978. There were 9,029 magazines compared to 930 in the 1970s. The China Press Circulation Report 2003, by Zhao Xiaobing, estimates China's newspaper and magazine retail market was worth $1.4 billion in 2001.

But the media market is not just ready for the picking. Experts say both domestic and foreign media companies face challenges as the market is deregulated and political controls are weakened. At present, foreign companies can only be involved in non-political media that fall outside the government's ideological radar screen.

"Other than style and IT publications, there is still much space for good quality competition in the media market," Zhao said. He believes now is a good time for foreign companies to jump in if they wish to take up a share of the retail media market.

That is why Ming Pao will only promote three non-political magazines in ChinA, the entertainment magazine Ming Pao Weekly, City Children's Weekly and Hi-Tech Weekly.

The Singapore newspaper Lian He Zao Bao is already sold at certain locations in China, such as airports and five-star hotels. The paper gained this limited market access through its non-critical editorial contents.

Other foreign media companies are carving out a niche in the Chinese market as well. Since they are not allowed to produce their products independently, they are marrying Western products with Chinese ones and producing "media babies." They bring along copyrighted products from overseas and package them to suit Chinese audiences.

"Our research indicates that eight out of the top 10 magazines in China today have overseas copyrights or have contents with overseas copyrights," Zhao Xiaobing told UPI.

Many believe the market will play the greatest role in shaping the Chinese media. Changes in managemeNt will eventually lead to a more efficient and powerful role for the media, which has been predominantly state-owned until now. The commercialization of media companies is already sharpening journalism in China.

"Market competition will shake up political management, and that will create space for independent journalism," Yu Guoming, director of the media study center at Chinese People's University, told UPI. "It is already happening. As long as the government doesn't specifically ban it, the media will find a way to report."

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