China to Loosen Publishing Laws

China is set to permit private investors to take a role in mainland publishing, the first time this will be permitted since the Communist party came to power in 1949.

China's General Administration of Press and Publication stated last year that it would dilute the monopoly held by state publishing companies and to allow private publishers into the mainland market. This has now manifested itself in projected moves to bring the largest publishing house, China Publishing Group, to an IPO in Shanghai later this year in an offering expected to raise US$265 million.

Three lead investors, an e-technology company, a film production business and an investment fund are believed to be the drivers behind the move. Included in the China Publishing Group IPO are subsidiaries that are specific to publishing in China, including its distribution and import-export subsidiaries.

Chinese law currently prohibits private publishers from competing with state owned enterprises in media, yet over the past few years private enterprises have outperformed SOE publications. They have gotten around the law by renting China ISBN numbers from state companies, and have produced generally far better quality material with superior advertising and sales revenues.

The loosening of China's publishing laws is expected to be a boon for the many foreign controlled or influenced publishing companies that have made a name for themselves over the years, with cooperation between the state publishing sector and the private sector set to increase, with Chinese state owned enterprises on the lookout for premium brands.