In return the group will transmit Chinese news channel CCTV-9 in parts of the United States.

But media pundits said Tuesday that however groundbreaking the deal -- the first time a foreign-owned cable network will be broadcast in mainland China -- its immediate effects would be limited given the small region concerned has illicitly watched foreign broadcasts for years anyway.

Under the reciprocal agreement announced late Monday, CETV, a Mandarin-language news and entertainment channel acquired by AOL in June 2000, will be offered to Chinese viewers in parts of Guangdong province from the start of 2002.

In return, China's state English-language CCTV-9 will be broadcast on some Time Warner cable channels, the first time a Chinese Central Television channel will be carried on a 24-hour basis on any US cable system.

"This is all about how we want to position ourselves and where we want to go, we will be looking into cooperative alliances and syndication opportunities in the future," said Steve Marcopoto, president of Turner Broadcasting System Asia Pacific.

CETV could further grow within China by expanding the reciprocity agreement and setting up more CCTV 9 broadcast points in the US, or improving cooperation with Guangdong Cable TV or other Chinese TV stations, he said.

"This is a big deal because every little step in China is hard to come by," said Dave Cantalupo, China managing director for Asian sports satellite channel ESPN Star Sports.

"But it does not change the fact that it is only formalizing what has been unofficially happening in Guangdong province for years.

"This is still not the big revolutionary opening of the Chinese market," he told AFP.

CETV programming along with other "free-to-air" satellite broadcasts like the five STAR channels partially owned by Rupert Murdoch's News Corporation -- including Cantalupo's ESPN -- have long been widely watched in Guangdong and other Chinese regions.

This is despite the lack of legally-binding agreements between the satellite broadcasters and local operators and the central government.

However, the situation is slowly changing.

Last week in a separate deal, China granted permission for one of the STAR channels, the Phoenix Chinese Channel, to be legally broadcast into the Pearl River Delta region, also in Guangdong province.

Phoenix is already very popular in China, and is watched unofficially by up to 100 million people around the country, state media reported this week.

However with agreements legitimising the channels, broadcasters can ensure cable operators also put out their advertisements instead of using unlicensed programming coupled with local ads, industry sources say.

"It is not so much a question of beefing up programming to attract audience share, but more of a question of the legal status making advertisers more comfortable about their ads," Cantalupo said.

Content will also continue to be a crucial issue, with both STAR and AOL Time Warner expected to be very careful not to offend China's puritan culture minders, one industry source said.

"Just because AOL and STAR aren't going to be the mouthpiece of the government does not mean that the Chinese government is signalling a willingness to give up its media monopoly," the source said.

"This just means that there are some additional voices saying that there are some revenue possibilities out there if you have good programming."

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