The audio and video industry of China has seen rapid development since implementation of the reform and open-up policy and has become a revitalized force in the cultural industry of China. China currently has 294 audio and video publishing entities, 300 reproduction entities, 1800 wholesale entities and 100 thousand retail entities, and a full-fledged industrial system has been established covering the production, publishing, reproduction, import/export, wholesale, retail and renting of audio and video products. The country published 9526 types 137 million cassettes/records/disks of recorded audio products and 11445 types 144 million cassettes/records/disks of video products in 2001. Our annual sales revenue of audio and video products is YMB6 billion, and the industry directly employs 300 thousand people. Production and sales of audio and video products is on the rise every year in recent years and the order of the market has been significantly streamlined.

1. Administration Authorities and Laws and Regulations

Based on the Administration Regulations on Audiovisual Products promulgated by the State Council, China practices a license system for the publishing, production, import, wholesale, retail and renting of audio and video products. The Ministry of Culture and cultural administration departments of local governments are in charge of the wholesale, retail, renting, public playing and import of audio and video products, and the Press and Publication Agency and press and publication administration departments of local governments are in charge of the administration of the publication, production and reproduction of audio and video products.

China has promulgated a series of laws and regulations to protect the legal rights and interests of authors and to foster the healthy development of the audio and video industry. The Civil Code of 1986 stipulates that citizens and legal persons are entitled to authorship rights. The Copyright Act of the People’s Republic of China came into force in June 1991 and was revised in October 2001. The State Council promulgated new Provisions for Implementation of the Copyright Act of the People’s Republic of China in August 2002.

China has joined the Berne Convention for the Protection of Literary and Artistic Works, World Copyright Convention, and Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms in 1992. China has established relationship to date with over 100 countries for mutual protection of copyrights.

The Standing Committee of the National People’s Congress (NPC) issued the Decision on the Punishment of Crimes Infringing Copyrights in July 1994. NPC revised the Penal Code in 1997 and added the crime of copyright infringement, which is subject to up to a seven-year sentence. The State Council promulgated Regulations for the Administration of Audio and Video Products in August 1994 and revised it in December 2001, and this is the specialized law and regulation for administration of the audio and video industry. The State Council promulgated Customs Protection Regulations of the People’s Republic of China for Intellectual Property Rights in July 1995.

Based on the above law and regulations, China has promulgated a series of departmental rules and regulations, including: Measures for the Administration on the Wholesale, Retail and Renting of Audio and Video Products, Measures for the Administration on the Importing of Audio and Video Products, and Measures for the Administration on Chinese-foreign Cooperative Distribution Enterprises of Audio and Video Products.

2. Fights Against Piracy and Protection of Intellectual Property Copyrights

Administration, public security and judicial organs authorities at different levels have carried out large-scale concentrated actions to fight against piracy every year since 1989. Over 140 million articles of illegal audio and video products have been confiscated (over 90% of them are piracy products) in the concentrated actions carried out from 1994 to 1999. Fighting against piracy audio and video products has become an important mission of cultural market administration departments of the government of China since 1996. China has closed all the 5000+ illegal laser disk projection venues by 1996. Measures were taken since 1997 to encourage reporting of illegal disc production lines in a campaign to uncover illegal disc production lines. Totally 137 such lines imported from abroad have been seized since then. The government stopped the development of the public projection business of audio-visual products from 2000 and will ban all public audio-visual projection in 2006. From 1999 to 2001, 277 distribution hubs dealing in illegal audio-visual products had been banned or closed down. China has held four major publicity campaigns publicizing laws and regulations on the audio-visual market from 1999, significantly enhancing the public awareness of intellectual property rights and their willingness to restrain from pirated products. The concept of “Piracy dealings is a breach of the law and the use of pirated products is detrimental” is taking root in the minds of more and more people.

With the sustained social and economic development in China and the rapid improvement of people’s living standards, administration of the audio and video market is enhancing. The audio and video market is seeing positive changes and is more and more regulated.

3. Open-up of Market and International Exchanges

As a commitment of China on accession to the WTO, China permits cooperation between foreign service-providers and Chinese enterprises or other economic organizations for the establishment of audio and video product distribution enterprises on the territory of China. The Ministry of Culture and the Ministry of Foreign Trade and Economic Cooperation promulgated the Measures for the Administration on Chinese-foreign Cooperative Distribution Enterprises of Audio and Video Products on December 10, 2001, and specifies the prerequisites, procedures, documents to be submitted, examination and approval departments and time limits, etc., for the establishment of Chinese-foreign cooperative distribution enterprises of audio and video products. The Ministry of Culture approved the establishment of Sony Music (PRC) Co Ltd in Shanghai by Sony Music Co Ltd with two Chinese companies for the wholesale of audio and video products. This is the first China-foreign cooperative distribution enterprise of audio and video products approved by China since its accession to the WTO.

China has rich cultural resources and the government encourages the export of national audio and video products. At the same time, it also encourages the absorption of excellent cultures of all countries in the world. China imports over 1000 types of audio and video products every year in recent years. The Regulations for the Administration on Audio-visual Products and the Measures for the Administration on the Importing of Audio and Video Products stipulate that audio and video products to be imported must be submitted to the Ministry of Culture for examination in contents, and the Ministry of Culture shall decide to approve or reject an application within 30 days after receiving the application. Audio and video products entering China are prohibited to carry the following contents: contents that violate the fundamental principles established by the Constitution; contents that jeopardize the unification, sovereignty and territorial integrity of the country; contents that divulge state secrets, jeopardize national security or are detrimental to the honor and interests of the state; contents that instigate ethnic hatred, ethnic discrimination, damage ethnic solidarity, or encroach upon ethnic customs and habits; contents that publicize cult, feudalism and superstitions; contents that disrupt social orders and damage social stability; contents that spread pornography, gambling, violence or instigate crimes; contents that insult or defame others, or injure legal rights and interests of others; contents that jeopardize public morality or elegant national cultural traditions.

It is a challenge for the whole world to fight against piracy, especially against organized piracy crimes, and international cooperation should be enhanced. China is carrying out the development strategy of revitalizing the nation through science and education. China has already joined the WTO. Fight against copyright infringements and piracy is the requirement of China its own to safeguard the healthy development of its cultural industry in the first place. It is also an international obligation the China should fulfill. The Chinese government is willing to fully cooperate with countries in the world and international organizations to step up the fight against piracy and the protection of intellectual property rights.