China to push publishing sector into business age

BEIJING, April 7 (Reuters) - China will push its lumbering state-run publishers to become bigger and more business-like and give a firmer foothold to smaller private publishing ventures, according to a policy document issued by state media on Tuesday.

The policy "opinion" from the General Administration of Press and Publication (GAPP) stresses that China's Communist Party censors will continue controlling what appears in books and other publications.

But the document issued in the People's Daily signals the government wants publishers -- until now run more like the bureaucracies to which most are attached -- to become more commercial through share offers, mergers, takeovers and controlled private investment.

"Encourage and support capital from society, especially from major state-owned businesses, to take part in the share-system restructuring of publishing and media businesses," the GAPP announcement states.

"Encourage and support non-state-owned capital in various formed entering permitted (publishing) areas," it adds.

China's censors control what appears in print by issuing limited numbers of approvals for books and magazines, which can be withdrawn if a publisher offends officials.

But even under such state control, publishing has become increasingly commercial, with private and foreign investors creeping in with the quiet and unpredictable nod of regulators. The new regulations are likely to accelerate that trend, though they do not specifically mention foreign investors.

Pearson Plc (PSON.L), Hearst Corp and other publishing multinationals have entered China through education ventures, copyright licensing deals and joint ventures with local companies.

But they contend with censors wary of foreign control, and some Chinese versions of foreign magazines, including Rolling Stone, have folded under pressure.

"The regulations signal private investment is going to play a bigger role," said Zhang Shouli, who runs a Beijing-based distribution company for children's books. He and other private operators have been lobbying for a firmer role.

"But these rules are still vague, so we'll have to wait and see what the specific regulations allow."

The rules say small, private publishing agents may be allowed to set up official joint operations with the state-run publishers. Such deals have been widespread over recent years despite past efforts to curtail them.

By late 2007, the China Daily reported, the country had 600 publishing houses and issued 9,500 magazines and 2,000 newspapers, making for a competitive but extremely fragmented publishing sector, which also competes with the Internet.

Fan Weiping, a publishing industry official with GAPP, told the newspaper that the government hopes to nurture seven "press and publishing giants with annual revenues of more than 10 billion yuan ($1.46 billion)" within five years.

The publishing reforms will be completed by the end of 2010. (Reporting by Chris Buckley; Editing by Nick Macfie)