Issues in Foreign Investment in Audio and Video Products Distribution

Llinks Law Office

The audio and video products market in China is not well regulated. Those who have lived in China for any amount of time find that pirated DVDs are easily accessible. An authentic DVD may be priced from Rmb50 to Rmb200 to 300, while less than Rmb10 will buy you a pirated DVD copy without much difference in quality; perhaps unsurprisingly, Chinese consumers tend to buy pirated DVDs instead of authentic ones. Apparently the cost of the copyright embedded in a genuine copy largely accounts for such a big price difference.

Recent years have seen many official and unofficial discussions through various media and forums on effective protection of legitimate copyrights. Ineffective government administration and local protectionism are two main reasons for the current prevalence of illicit copies in the audio and video products markets. As part of the recent overhaul of this market, and also as a response to the commitments that China has made in this area, the State Council promulgated on December 25 2001 the Administration of Audio and Video Products Regulations (the Regulations). Meant as implementing rules, the Administration of Sino-foreign Cooperative Joint Audio and Video Products Distribution Enterprises Procedures (the CJV Procedures)¹ and the Administration of the Wholesale, Retail and Rental of Audio and Video Products Procedures (Administrative Procedures)² were also recently introduced.