China allowed foreign investors to retail newspapers, magazines and books in the local market from May 1 this year, and will allow foreign wholesalers to enter the newspaper, magazine and book sectors in December 2004.

Many Chinese have been looking forward to discounting fuelled by the new arrivals.

"I hope the competition between book sellers at home and abroad will finally result in the reduction of book prices, so I can spend the same amount of money buying more good books," said Zhang Xin, a college sophomore in Beijing.

However, insiders predict book lovers like Zhang will see few price changes.

"Foreign investors' participation in China's distribution channels for publications will not influence book prices much," said Hao Zhensheng, a senior researcher with the State Publication Research Institute.

On the contrary, as people's consumption capacity grows, book prices could in fact rise in China, Hao said.

He reasoned that bookstores with foreign investment are not likely to attract customers in China simply by discounting their products and running down their profits.

"Their advantages lie in providing excellent service to customers and paying publishing houses back on time," Hao said.

China has so far not permitted foreign capital into the publishing sector.

But Hao predicted foreign investors could influence the decisions of some mainland publishing houses in their choice of topics.

"After foreign book dealers build up their sales network in China, it is possible they may end up controlling topic selection by ordering large numbers of books from publishing houses," he explained.

Foreign investors as well as those from Hong Kong and Taiwan had already made preparations ahead of the market entry date of May 1.

According to the latest 2002-2003 Chinese Publishing Blue Book, at least four joint ventures were established in the publication retail and wholesale business from January to November last year.

They include the first to gain official approval - Greater China Media Services Ltd, which is jointly owned by Hong Kong-based Global China Technology Group Ltd and People's Daily Press at a cost of 250 million yuan (US$30.1 million).

Others include a partnership between the mainland SDX (Sanlian) Joint Publishing Company and Hong Kong-based Tom Group, and a joint book sales venture between Fujian Provincial Foreign Language Bookstore and 13 Taiwan publishers.

(China Daily June 16, 2003)