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The WTO Ruling on China's Regime for Distributing and Importing Entertainment Products

  • ID: 1208303
  • Report
  • December 2009
  • Region: China
  • 39 Pages
  • CMM-I
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In August 2009, a World Trade Organization panel ruled against China's system of monopoly control over entertainment products. Was this the victory supporters hailed as the dawn of a new day for American and global entertainment companies in the China market? Will China ultimately comply with the ruling, or will it circumvent it? Is China's regulatory system the biggest problem the global entertainment industry faces in China, or does it simply mask even greater challenges that lie in wait? This paper examines all of these issues in depth, and suggests a path forward for China and the industry.

The WTO Ruling on Importing Entertainment Products into China – What Does It Mean for You?, written by some of China's most experienced media analysts, cites ample opportunities and precedent for China to circumvent the ruling and major market barriers that remain unaddressed. The report concludes that not only will the WTO ruling fail to deliver on its expected results, it may also backfire on the industry.

“In the wake of the ruling the media industries must assess what they have failed to accomplish in their nearly 3 year-long effort with the WTO,” the report states. “An even more troubling prospect exists: will China seek to build barriers even as they comply with the letter of the ruling, thus negating its value – or worse?”

The report takes to task the Bush Administration's United States Trade Representative for filing the original action in 2007, and Washington-based lobbyists for continuing a confrontational approach that has yet to yield significant results.

“The most significant effect of this action will be to solidify the adversarial nature of China's relationship with the US entertainment business,” said report co-author David Wolf, a sixteen-year veteran of the Chinese media industry. “The day is coming when Hollywood and its media allies will have to decide whether to change their approach or abandon China altogether."

Examining the ruling in the context of China's regulatory and policy environment as well as market conditions on the ground, the paper examines the issues that stand in the way of a meaningful ruling, and explores the implications for leaders of the film, music, and publishing industries. The paper concludes with strategic recommendations for the leaders of entertainment companies worldwide
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Executive Summary

I. Introduction
- Behind the Action

II. The Ruling
- Background of the Case
- The Goals
- The Result
- Losing in the Process
- A Ruling Reality Check
- China's Response

III. Compliance
- Circumvention
- Compelling Compliance

IV. China's Larger Agenda
- China's Media Goals
- Current Policy
- Collision Course

V. Challenges Beyond Access
- Piracy Forever
- The Retail Nightmare
- The Relevance Gap
- Homegrown Competition

VI. Conclusion: Looking Toward The Future

VII. Appendices

Appendix A: Contact Details of All Firms Mentioned
Appendix B: Total Number of AV Titles Sold in China 2000-2008
Appendix C: Total Number of Films Screened in China 2000-2008
Appendix D: Box Office Results for Films in Theatrical Release in China 2003-2008
Appendix E: Snapshot of China's Film Industry
Appendix F: Total Number of Books Published in China 2000-2008
Appendix G: Total Book Sales in China 2000-2008
Appendix H: Total Number of Music CDs Sold in China 2000-2008
Appendix I: Total Music Sales in China 2000-2008

Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown