China To Restrict Online Music Sales

The Ministry of Culture will also build and administer its own MP3 download site.

BEIJING, China — In another attempt to come to grips with the effects of the Internet and to reduce piracy in the information-technology sector of its economy, the People's Republic of China's Ministry of Culture has developed a new set of rules that will ban online sales of music and videos by companies supported by foreign investments, beginning in May.

The new rules banning Internet sales of audiovisual products by foreign-invested companies were reported by the state news agency Xinhua on Saturday.

According to an AFP report, Xinhua said that the directives were designed to reduce piracy and smuggling. Sales of pirated or illegally imported CDs in China are widespread, with the Internet providing an additional outlet for pirated music and videos that is difficult to police. The new rules will also cover illegal music downloads of copyrighted music in the MP3 file format, the report said.

This leaves only wholly owned Chinese companies permitted to sell music and videos online from China. Even those online operations will have to apply to the government for a license by May 1.

Earlier this month, an agency of the People's Republic of China's Ministry of Culture announced plans to build and administer its own online-music download site that will store Chinese MP3 digital audio files.

Beijing Artists Online L.L.C., which will develop and manage the MP3 site, was set up by Chinese investment company Hainan Dingshen Investment Co. Ltd. and China Culture Information Net, an Internet arm of the Chinese Ministry of Culture, with technology assistance from a U.S. Internet company, Houston InterWeb.

The commercial online service will allow Chinese artists to publish their music online for download for free, while the Ministry of Culture will be able to monitor the site.

The site is set to become the first government-sanctioned MP3 site in China.