Reform in China's press and publication industry is on a sound track, with overseas investors playing active roles in helping the sector shift from a planned economy to a market-oriented one.

Shi Zongyuan, director of the General Administration of Press and Publication, said yesterday at the First Forum of China Publishing Development High-level Strategy that market-oriented reform is under way.

The central government selected eight national-level newspaper institutions for property rights reform trials last year to transform them from institutions to joint-stock companies with the State holding majority stakes.

It also approved a reform scheme for the China Securities Journal recently.

Meanwhile, Xinhua bookstores in provinces of Sichuan, Zhejiang, Liaoning, Guangdong, Jiangsu, Fujian, and Shanghai Municipality have finished restructuring or are restructuring from state-owned enterprises to State-controlled shareholding companies.

Shi said that overseas media giants could introduce funds, management skills, professionals and operational experiences into China to help the reform along.

"However, as management structure reform in specific industries should be taken step by step, overseas investors' entry should be in line with the central government's regulations," Shi said.

In accordance with China's commitments to the World Trade Organization (WTO), the nation opened its book and magazine distribution market from May.

Meanwhile, there are still restrictions on foreign media giants publishing newspapers and magazines on the mainland.

So far, a host of overseas investors and domestic media organizations are discussing plans to jointly exploit the "gold mine" of China's media sector.

The two sides - one hungry for foreign capital in order to expand, and the other seeking opportunities to cash in on the sector - have recently taken a number of steps.

Approved by the General Administration of Press and Publication, Hong Kong-based Global China Group and People's Daily, the largest newspaper group in the Chinese mainland, set up the first press joint venture - the Dahua Media Company - on the Chinese mainland at the end of 2002.

With a registration capital of 250 million yuan (US$30.12 million), the joint venture is engaged in the distribution of newspapers, magazines and books.

Another Hong Kong firm - Tom Group, inked a joint venture agreement with the China Popular Computer Week Management Co Ltd in Chongqing Municipality last month.

The Hong Kong-listed company also wants sign an agreement with one or two branches of Xinhua Bookstore, the state-owned book distribution network, in this year or early next year. It aims to build regional logistics via a partnership and develop a distribution network on the Chinese mainland.

Long Yongtu, the secretary-general of the Bo'ao Forum for Asia, said that the step-by-step liberalization of China's press and publication market meant that domestic enterprises had to sharpen their competitive edges, while straightening out property rights should be on top of their agenda.

"We should create a series of famous media brands in China and promote them to become internationally influential ones," said Long.

In addition to overseas investment, raising funds on public markets is been regarded as another efficient and quick method for China's powerful media enterprises to use.

Early last month, Beijing Youth Daily, China's second-largest newspaper group, was reported to be preparing for a public offering in Hong Kong in November, aiming to raise over HK$1 billion (US$128 million).

The firm's president, Zhang Yanping, said in March that it will seek an investment of 1.5 billion yuan (US$181.2 million) in a two-step initial public offering (IPO), with shares first listed in Hong Kong and then on the mainland's A-share market.

If its IPO succeeds, it will become the first major state-owned newspaper to list overseas.

(China Daily August 17, 2004)