China has witnessed a booming development of its culture industry since the 1990s. Statistics show that the added value created by cultural enterprises jumped from RMB1.21 billion in 1990 to RMB8.37 billion in 1998, more than six times; the number of cultural units increased from 68,000 to 92,000, more than 35%; and the staffs employed in the industry rose from 49,500 people to 72,100, more than 46%. However, the culture industry in China is still very laggard if compared with that in developed countries. For instance, in the late 1990s, the movie industry in the United States created a value of US$10.5 billion, took up 2/3 in the world ticket revenues and was listed as the fourth export pillar industry after telecommunications, petroleum, petroleum processing and aviation. And, Australian culture industry employed 10% of the country's total labor force, and created an annual production value of about A$20 billion, contributing 2.5% to its GNP, and was the pillar industry and major export industry among Australian tertiary industries.

The prosperous culture industries in developed countries mainly attribute to large scale and high industrialization; smooth market channels and powerful market networking; rational allocation of human resources, capital, technologies, information and projects; and sound industrial structure and high technological content in cultural products.

China's culture industry features big number, random distribution, market disorder and small scale of enterprises. If not conglobated to large-scale enterprise groups through reorganization, these enterprises will not be able to join the international competition and even are possible to be squeezed out the domestic market. In the bilateral agreements with the United States, the Chinese government promised to allow foreign investors to build and renovate Chinese cinemas (with a share of less than 49%) through joint ventures and participation in business operation and to import 20 foreign films per year on a revenue-sharing basis in three years after accession, and foreign enterprises are allowed to distribute audiovisual products and entertaining software except movies through joint ventures. Therefore, the entry of foreign films and audiovisual products in large numbers after China joins the WTO will deal a big blow to the domestic culture industry.

China's existing laws and regulations governing imports of cultural products and services are not perfect yet. To ensure long-term development of China's culture industry, we should take measures permitted by the WTO to promulgate and improve relevant laws and regulations, launch industrial protective policies, implement market access within measure and gradually relax limitations on operation rights in the culture market. Chinese culture industry should not solely rely on government protections but should actively take part in international competition based on domestic cultural resources, optimized industrial structure and regulate the market through economic, legal and administrative measures.