Notice Concerning Matters Related to Implementing the “Provisional Sino-Foreign Joint Venture and Cooperation Radio and Television Programme Production Business Enterprise Management
On 25 February 2005, SARFT issued the “Notice Concerning Matters Related to Implementing the “Provisional Sino-Foreign Joint Venture and Cooperation Radio and Television Programme Production Business Enterprise Management”, the “Notice” said that, the SARFT and the Ministry of Commerce “Provisional Sino-foreign Joint Venture and Cooperative Radio and Television Programme Production Business Enterprise Management Regulations” (SARFT Decree No. 44) was officially implemented on 28 November 2004. In order to further standardize Sino-foreign joint venture and cooperation radio and television programme production business enterprises (hereafter simply named “jointly-operated entities”) management work, the problems that should be paid attention to during concrete implementation work are notified as follows:
I, All levels must fully understand the importance of standardizing and strengthening jointly operated enterprise management, and administer strictly and according to the law. Permitting the establishment of jointly operated enterprises is an important requirement for deepening radio and television sector reform, further expanding our country’s programme production industry scale, raising programme production capacity and levels, and is also a requirement for further raising our country’s radio and television programme international market share and influence. At the same time, we must note that the radio and television programme production sector a very strong ideological nature, and at the same time as importing mature foreign programme production market business concepts and methods, we must realistically grasp content guidance of all sorts of products produced by jointly operated enterprises, understand the political inclination and background of foreign co-operators, prevent foreign harmful ideology and culture to enter our programme production sphere through joint venture or cooperation methods. It is necessary to strictly and according to the law, implement examination and inspection powers over the co-operators’ main body, funding and reputation, and long-term interests cannot be overlooked because of short-term interests.
II, Earnestly implementing preliminary examination powers over business enterprises, guaranteeing standardized and orderly examination of business enterprises. It is necessary to strictly according to the provisions of Decree No. 44., conduct earnest examination and verification over conditions such as the applicant’s resources, funding, contracts, reputation, enterprise symbols, etc. Also, it is necessary to pay attention to grasping the following principles during concrete work:
(1) Foreign co-operators must be specialist radio and television enterprises, including radio stations, television stations or specialist film and television programme production organs. Among domestic co-operators, there shall also be a side that is a radio and television programme production business organ or a television drama production organ. Domestic broadcasting organs such as radio stations and television stations, etc. cannot establish business enterprises in cooperation with foreign enterprises.
(2) In view of business enterprises just having started, in order to avoid resource wastage, promoting jointly operated enterprises to speedily shape brands, according to the provisions of Article 6 Paragraph 1 of Decree No. 44, a foreign cooperating side and a SARFT-approved and established business in an approved and established jointly operated enterprise, may in principle not apply for establishment of a second jointly operated enterprise. Under exceptional circumstances, it shall pass through the provincial-level administrative radio, film and television management entity, explaining the particular reasons, and reported to SARFT for approval. Only with SARFT approval, may another joint operation application be put forward.
(3) According to the provisions of Article 6 Paragraph 7 of Decree No. 44, those among the Chinese side applicants holding a “Radio and Television Programme Production Business Permit” or a “Television Drama Production Permit (Level A)”, shall within three years before the date of application not have been subject to harmful records such as being warned, reported for criticism or having production qualifications provisionally stopped by provincial-level or higher radio, film and television management entities. Those among the applying organs having their “Radio and Television Programme Production Business Permit” or a “Television Drama Production Permit (Level A)” for less than three years, may only put forward applications for joint operation after they complete the three years.
Those among the Chinese side applying organs not having a “Radio and Television Programme Production Business Permit” or a “Television Drama Production Permit (Level A)”, shall within three years before the date of applications, have no record of violating laws or regulations with local entities such as industry and commerce, taxation, etc. Those having their legal person registration with the industry and commerce entity for less than three years, may only put forward applications for joint operation after they complete the three years.
Foreign side cooperating organs shall not have a record of being unfriendly to us within three years before the date of application.
(4) Jointly operated enterprises, when producing television dramas, must according to the procedures provided by the “Radio and Television Programme Production Business Management Regulations” (SARFT Decree No. 34) apply for a “Television Drama Production Permit (Level B)”. Where the Chinese side of a jointly operated enterprise is an organ holding a “Television Drama Production Permit (Level A)”, if producing television dramas under the name of the jointly operated enterprise, a “Television Drama Production Permit (Level B)” must be applied for separately as well.
(5) Where change such as cancellation or revocation happens in the original legal person organs of any cooperating side in a jointly operated enterprise, and change of the original cooperating subject or modification of shareholding is required, it shall be according to the provisions of Article 10 of Decree No. 44, be reported to the jointly operated enterprise examination and approval organ for examination and approval; where no change to the cooperation subject or shareholding is required, jointly operated enterprise termination formalities shall be conducted.
(6) Where all other sorts of Sino-foreign joint venture or cooperative culture enterprises already established before SARFT Decree NO. 44 took effect, or jointly operated film production companies already approved by SARFT and established, engage in radio and television programme production or business work, they must conduct examination and approval formalities according to SARFT Decree No. 44.
(7) Domestic organs already having obtained a “Radio and Television Programme Production Business Permit” or “Television Drama Production Permit (Level A)”, where they transfer shares or equity rights to foreign organs or shareholding change occurs in foreign capital, examination and approval formalities must be conducted with reference to SARFT Decree No. 44.
III, Strengthening daily management over jointly operated enterprises, guaranteeing the healthy development of jointly operated enterprises. During work, it is necessary to especially pay attention to the following points:
(1) SARFT or SARFT-authorized provincial-level radio, film and television management entities must strengthen examination of jointly operated enterprise programme production themes and content, earnestly supervise whether or not jointly operated enterprises develop all kinds of professional activity within their approved business scope. All sorts of programmes produced by jointly operated enterprises are managed as domestic programmes. It is strictly prohibited to make use of jointly operated enterprise production names to import foreign channels and all kinds of programmes.
(2) The situation of the annual programme production and distribution of jointly operated enterprises (including distribution abroad), etc., shall be reported before 31 January of the next year to the provincial-level radio, film and television management entity for filing. If in the production amount of that year, Chinese-themed radio and television programmes do not reach the required 2/3, a warning shall be issued; there the statutory requirements are still not reached for three years running, their programme production business qualifications may e provisionally revoked, and they will be required to adopt realistic measures to conduct rectification. When their programme theme, production planning, fees, etc., are satisfactory for producing more than 2/3 Chinese-themed programmes, their business qualifications will be restored. All provincial-level radio, film and television management entities shall before 15 February of every year, examine and verify the situations of jointly operated enterprise business achievements under their control, and report it to the SARFT social management department for filing.
(3) Jointly operated enterprises may not participate in domestic radio stations and television stations channel and frequency operation work. If it is discovered that domestic radio and television broadcast organs, under the name of jointly operated enterprises, have handed over channels or frequencies for operation by foreign organs, or jointly operate them with foreign organs, provincial-level or higher radio, film and television management entities shall determinedly put an end to it. Where circumstances are grave, according to the “Radio and Television Management Regulations”, the necessary administrative punishment shall be imposed on the organ concerned.
(4) Jointly operated enterprise operation and management must be mainly led by the Chinese side, the rights and powers belonging to the Chinese side may not be entrusted or conferred to the foreign side for implementation.
IV, Developing management over jointly operated enterprises is a completely new work for radio, film and television management entities. During concrete management work, work responsibility content must such as management duties, concretely accepted entities, work procedures, examination and approval periods and supervision mechanisms, etc., must be clearly announced to society, achieving government openness. New circumstances run into during work, shall be timely communicated to SARFT, asking for instructions, determinedly preventing phenomena such as sloppy policies and each entity acting on its own. It is necessary to manage earnestly and strictly, incessantly raise management work levels, establish the beneficial image of a rule of law government and a well-reputed government.