China to open airwaves to AOL Time Warner and News Corp.
9/5/2001

Beijing - China is near an agreement with News Corp. and AOL Time Warner that would allow those companies to broadcast directly to television audiences in parts of southern China, the government's broadcast authority said Wednesday.

In return, the two companies have to ensure wide access to the United States for CCTV-9, the English-language channel of China's main state TV network, said a spokeswoman for the State General Administration of Radio, Film and Television.

Allowing one or both firms to broadcast direct to even limited Chinese audiences would be a breakthrough. China's communist government regards television as a vital propaganda tool and has largely kept tight control of its airwaves.

News Corp's Asian subsidiary, STAR, confirmed that it is in "advanced discussions" with the Chinese government.

"China's increasing openness augurs well for the whole broadcasting industry," said James Murdoch, STAR's chairman and the youngest son of media magnate Rupert Murdoch. "We are hopeful that we can reach a positive conclusion soon and launch a new service."

If negotiations succeed, China intends to allow New York-based AOL and Sydney-based News Corp. to broadcast to households in parts of Guangdong, a booming southern province next to Hong Kong, said the official with China's broadcast authority, who declined to be identified by name.

"We have agreed that they can broadcast in parts of Guangdong, but not all the province. There are limits," she said. "We hope that the two companies will help us get CCTV-9 -- the English channel -- into the United States."

Foreign programming is aired widely on state-controlled television, particularly provincial and cable channels, and some foreign channels can be received in up-market hotels and luxury housing.

But government regulations prohibit foreign broadcasters from reaching Chinese TV audiences directly, the spokeswoman said. AOL Time Warner and News Corp. would be the first to be allowed to do so, probably through cable, she said.

STAR would set up a new channel with new programming for the Guangdong operation and News Corp. would help distribute CCTV-9 in the United States, said a Beijing-based News Corp. spokesman, Liu Heung Shing.

The government broadcasting spokeswoman stressed that ensuring CCTV-9 reaches U.S. audiences was a precondition for any deal.

American movies and TV programming have taught Chinese audiences about the United States, and CCTV-9 could help teach Americans about China, the official said. China's insistence on access for CCTV-9 fits into efforts to improve the Chinese government's image in the United States.

"Many Chinese understand the United States, but Americans don't know much about China," said the official. "This is not good for understanding between our countries."


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