After the signing of Sino-US and Sino-European final agreements on China's entry into the WTO, the day counted down for China to become a WTO member. China's WTO entry will bring about a great impact on its all industries, including the culture industry. To meet new challenges, the Chinese culture market shall undergo a series of reform.

As pointed out by Chinese experts, the culture industry, including film, television, music, song recording, and audiovisual industries, constitutes an important part of the service industry. Up to the end of 1998, China had more than 330,000 companies and more than 1.7 million employees in this field, which had created a profit of RMB13.3 billion. The scale may sound quite large, but compared to developed countries, Chinese culture industry still lags far behind.

Taking China's television and film industry for an example, even though it has developed its own working system, with a staff of more than 300,000 people and television coverage reaching 91.6% of the total population and with 77 million cable TV users, it still depends heavily on domestic market demands. Therefore, it cannot compete with that of developed countries, due to its small and all-inclusive structure, capital insufficiency, undeveloped technology and small-scale companies. The situation in developed countries is different. In 1998, US television and television programming, together with its video tape and music publishing, got total revenues of US$60 billion, ranking No.1 in the US exports. Therein, US$12 billion was directly produced by the film and television industry. After China's entry into the WTO, American and western films and TV products will flood into the Chinese market. Forced by such challenges, China's film industry needs to optimize its structure, to set up enterprise groups, and to reform the traditional film industry with advanced technology, in order to strengthen its competitiveness and fasten its development pace.

Current management of the cultural market seems inefficient, leaving many longstanding difficult problems such as unauthorized duplication and smuggling unsolved. In past one and a half years, more than 6 million illegal audiovisual products were confiscated, and more than 4,000 illegal stores were checked or shut down. This situation seriously damaged the confidence of both investors and consumers, holding back the healthy development of the culture industry. After the WTO entry, the inflow of foreign capital will surely further enlarge the market scale and demand a higher managerial standard. Therefore, streamlining market order will help domestic cultural products to participate international competition.

After China's WTO entry, developed countries will export large quantities of cultural products to China with the help of their capital and advanced technology. But an open market is bi-directional, and Chinese products should be oriented to both the domestic market and the international market. By making full use of the existing overseas distribution channels set up by multinationals, Chinese traditional cultural products can be introduced abroad and gradually gain a share in the international market.

According to officials of the Market Department of the Ministry of Culture, current cultural market lacks a perfect legal supervision system, owning to the excessive emphasis on ideology in the past, which resulted into ignorance of the construction of its legal system. To solve this problem, relevant authorities in China has formulated a series of laws and regulations in recent years, such as the Copyright Law, the Regulations on Administration of Audiovisual Products, the Regulations on Administration of Films and the Regulations on Administration of Performance Markets, administrative rules and local rules. Under such laws and regulations, China's cultural market is able to open to the outside world and compete with foreign cultural products.

At present, the Ministry of Culture is speeding up to draft the Law of Cultural Market, aiming to protect China's fledgling culture industry. To ensure healthy development of cultural market, the Ministry is also amending some rules according to the WTO principle of reciprocity, and formulating safeguard clauses, industry policies and regulations based on the exceptions and safeguard clauses of international service trade.

Insiders in the industry say that the exploitation of domestic cultural resources will set to speed up after China becomes a WTO member, and this will help improve the legal system governing the cultural market, which will in turn push China's culture industry to a more prominent position in the world.