WORLD TRADE  
ORGANIZATION  WT/DS363/1 
G/L/820 
S/L/287 
16 April 2007 
 (07-1499) 
 Original:   English 
  
 
 
CHINA – MEASURES AFFECTING TRADING RIGHTS AND 
DISTRIBUTION SERVICES FOR CERTAIN PUBLICATIONS 
AND AUDIOVISUAL ENTERTAINMENT PRODUCTS 
 
Request for Consultations by the United States
 
  
 The following communication, dated 10 April 2007, from the delegation of the United States to the delegation of China and to the Chairman of  the Dispute Settlement Body, is circulated in 
accordance with Article 4.4 of the DSU. 
 
_______________ 
 
  My authorities have instructed me to request  consultations with the Government of the 
People's Republic of China ("China") pursuant to Articles 1 and 4 of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes  ("DSU"), Article XXII of the General Agreement 
on Tariffs and Trade 1994  ("GATT 1994"), and Article XXII of the General Agreement on Trade in 
Services  ("GATS") with respect to (1) certain measures that restrict trading rights with respect to 
imported films for theatrical release, a udiovisual home entertainment products ( e.g., video cassettes 
and DVDs), sound recordings, and publications ( e.g., books, magazines, newspapers, and electronic 
publications), and (2) certain measures that restrict market access for, or discriminate against, foreign 
suppliers of distribution services for publications and foreign suppliers of audiovisual services 
(including distribution services) for a udiovisual home entertainment products. 
 I. Trading rights  
 
In its protocol of accession to the World Trade Organization ("WTO"),
1 China committed to 
fully open the right to trade ( i.e., the right to import goods into China and to export goods from 
China), with some limited exceptions not applicable  here, within three years after accession.  Despite 
this, various measures of China reserve to certain  Chinese state-designated and wholly or partially 
state-owned enterprises the right to import films for theatrical release, audiovisual home entertainment 
products ( e.g., video cassettes and DVDs), sound recordings, and publications ( e.g., books, 
magazines, newspapers, and electronic publi cations) (collectively, the "Products"). 
 
In this connection, the measures at issue include the following: 
 
(1) the Regulations on Administration of the Films Industry2; 
 
                                                      
1 Protocol on the Accession of the People's Republic of China , WT/L/432, 23 November 2001 (the 
"Accession Protocol"). 
2 State Council Order No. 342, adopted at the 50th executive meeting of the State Council on 
12 December 2001, promulgate d on 25 December 2001. WT/DS363/1 
G/L/820 S/L/287 
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  (2) the Provisional Rules on the Entry Criteria for Operating Film Enterprises
3; 
 (3) the Administrative Regulation on Publishing
4; 
 
(4) the Administrative Regulations on Audiovisual Products5; 
 (5) the Catalogue for Guidance of Foreign Investment Industries
6; 
 
(6) the Several Opinions of the Ministry of Culture, State Administration of Radio, Film and 
Television, General Administration of Press and Publication, National Development and 
Reform Commission and the Ministry of Commerce on Introducing Foreign Investment into the Cultural Sector
7; 
 
(7) the Measures for the Administration of Import of Audio and Video Products8; 
 (8) the Measures for Administration of Chinese Foreign Contractual Distribution Ventures of 
Audiovisual Products
9; 
 (9) the Administrative Regulations on Electronic Publications
10; and 
 
(10) the Procedure for Examination and Approva l of Establishment of Publication Importation 
Entities11; 
 as well as any amendments, related measures, or implementing measures. 
 
The measures at issue appear not to allow all Chinese enterprises and all foreign enterprises 
and individuals to have the right to import the Produc ts into the customs territo ry of China.  It also 
appears that foreign individuals and enterprises, incl uding those not invested or registered in China, 
are accorded treatment less favourab le than that accorded to enterpri ses in China with respect to the 
right to trade.  Accordingly, the measures at issue appear to be inconsistent with China's obligations 
under the provisions of paragr aphs 5.1 and 5.2 of Part I of the Accession Protocol,
12 as well as China's 
obligations under the provisions of paragraph 1.2 of  Part I of the Accession Protocol (to the extent 
that it incorporates commitments in paragraphs 83 a nd 84 of the Report of the Working Party on the 
                                                      
3 Decree No. 43 of the State Administration of Radio, Film and Television and the Ministry of 
Commerce (10 October 2004). 
4 State Council Order No. 343, adopted at the 50th executive meeting of the State Council on 
12 December 2001, promulgate d on 25 December 2001. 
5 State Council Order No. 341, adopted at the 50th executive meeting of the State Council on 
12 December 2001, promulgate d on 25 December 2001. 
6 Order [2004] No. 24 of the State Development and Reform Commission, the Ministry of Commerce 
of the People's Republic of China (30 November 2004). 
7 Order [2005] No. 19 of the Ministry of Culture (6 July 2005). 
8 Decree No. 23 of the Ministry of Culture and the General Administration of Customs (17 April 2002). 
9 Promulgated by the Ministry of Culture and Ministry of Commerce on 9 February 2004 (superseding 
the measures notified by  China in S/C/N/219). 
10 Order No. 11 of  the General Administration of Pre ss and Publication (30 December 1997). 
11 General Administration of Press and Publication  (27 December 2005) (available at:  
www.gapp.gov.cn/GalaxyPortal/inner/zsww/zongsu3.j sp?articleid=4923&boardpid=1450&boardid1=11501010
11150c) (visited on 9 April 2007). 
12 The Products are not listed in Annex 2A or Annex 2B of the Accession Protocol.  WT/DS363/1 
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 S/L/287 
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  Accession of China
13).  The Accession Protocol forms part of the terms of accession agreed between 
China and the WTO and is an integral part of the Marrakesh Agreement Establishing the World Trade 
Organization . 
 
Furthermore, to the extent that the measures at  issue impose prohibitions or restrictions other 
than duties, taxes or other charges, on the impor tation into China of the Products, these measures 
appear to be inconsistent with China's obliga tions under Article XI:1 of the GATT 1994.   
 II. Distribution services  
 
In the Accession Protocol, China made market access and national treatment commitments in 
the distribution services and audiovisual services sectors of its Schedule of Specific Commitments on Services (the "Schedule").
14  Despite those commitments, various measures of China impose market 
access restrictions or discriminatory limitations on fo reign service providers seeking to engage in the 
distribution of publications and certain audiovisual home entertainment products.  
In this connection, the measures at issue include: 
 (1) the Administrative Regulation on Publishing
15; 
 
(2) the Administrative Regulations on Audiovisual Products16; 
 (3) the Provisions on Guiding the Orientation of Foreign Investment
17; 
 
(4) the Catalogue for Guidance of Foreign Investment Industries18; 
 (5) the Several Opinions of the Ministry of Culture, State Administration of Radio, Film and 
Television, General Administration of Press and Publication, National Development and 
Reform Commission and the Ministry of Commerce on Introducing Foreign Investment into the Cultural Sector
19; 
 
(6) the Administrative Regulations on Management  of Foreign-Invested Book, Magazine and 
Newspaper Distribution Enterprises20; 
 (7) the Administrative Regulations on the Publication Market (revised)
21; 
                                                      
13 WT/MIN(01)/3. 
14 WT/L/432, Annex 9, and WT/MIN(01)/3/Add.2. 
15 State Council Order No. 343, adopted at the 50th executive meeting of the State Council on 
12 December 2001, promulgate d on 25 December 2001. 
16 State Council Order No. 341, adopted at the 50th executive meeting of the State Council on 
12 December 2001, promulgate d on 25 December 2001. 
17 Decree [2002] No. 346 of the State Council (11 February 2002). 
18 Order [2004] No. 24 of the State Development and Reform Commission, the Ministry of Commerce 
of the People's Republic of China (30 November 2004). 
19 Order [2005] No. 19 of the Ministry of Culture (6 July 2005). 
20 The General Administration of Press and Publication and the Ministry of Foreign Trade and 
Economic Cooperation (17 March 2003). 
21 Promulgated by the General Administration of Press and Publication on 16 July 2003, revised on 
16 June 2004. WT/DS363/1 
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  (8) the Administrative Regulations on Electronic Publications
22; 
 (9) the Administrative Measures on Subscription of Imported Publications
23; 
 
(10) the Procedure for Examina tion and Approval of Establishment of Chinese-Foreign Entities, 
Cooperative Joint Ventures, and Wholly Foreign Owned Publication Distribution Enterprises
24; and 
 
(11) the Measures for Administration of Chinese Foreign Contractual Distribution Ventures of 
Audiovisual Products25; 
 as well as any amendments, related measures, or implementing measures.  
A. Publications (e.g., books, newspapers, periodicals, and electronic publications)  
 
The measures at issue appear to prohibit fo reign service suppliers (including wholly or 
partially foreign-owned or foreign-invested en terprises) from engaging at least in a type of 
distribution described in these measures as the "master  distribution" of publications.  The measures at 
issue also appear to prohibit foreign service suppliers  (including wholly or pa rtially foreign-owned or 
foreign-invested enterprises) from engaging at least in the wholesaling of "electronic publications" (a 
term that refers to a subset of publications).  Moreover, the measures at issue may extend this 
prohibition more broadly to all distribution of all p ublications (whether at the "master distribution" 
level or otherwise).  Furthermore, to the extent that some foreign service suppliers are allowed to 
engage in some aspects of the distribution of p ublications, there appear to be discriminatory 
requirements concerning such suppliers' registered  capital, such suppliers ' operating term, and the 
particular publications that such suppliers may distribute.  
The measures at issue therefore appear to accord  treatment to foreign suppliers of distribution 
services for publications treatment less favourable than that accorded to Chinese suppliers of 
distribution services for publications.  In Sector s 4A-4E of its Schedule, China undertook market 
access and national treatment commitments with r espect to the supply through commercial presence 
in China by service suppliers of other Members of, inter alia , distribution services for publications.  
Moreover, the measures at issue do not appear to fall within the terms, limitations, conditions, or 
qualifications on market access or national treatment that China has specified in its Schedule for the 
distribution of publications through commercial presence in China by service suppliers of other 
Members.  Accordingly, the measures at issue app ear to be inconsistent with China's obligations 
under Articles XVI and XVII of the GATS.  
B. Audiovisual home entertainment products  
 
The measures at issue appear to prohibit fo reign service suppliers (including wholly or 
partially foreign-owned or foreign-invested en terprises) from engaging at least in a type of 
distribution described in these measures as the "master distribution" of audiovisual home 
                                                     
 
22 Order No. 11 of  the General Administration of Pre ss and Publication (30 December 1997). 
23 Order No. 27 of the General Administration of Press and Publication (adopted at the fourth 
conference of the General Administration of Press and Publication on 9 September 2004 and published on 
31 December 2004). 
24 General Administration of Press and Publication (27 December 2005). 
25 Promulgated by the Ministry of Culture and Ministry of Commerce on 9 February 2004 (superseding 
the measures notified by  China in S/C/N/219).  WT/DS363/1 
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  entertainment products such as video cassette s and DVDs ("audiovisual home entertainment 
products").  Moreover, to the extent that foreig n services suppliers are permitted to engage in any 
distribution of those products (whether at the "maste r distribution" level or otherwise), the measures at 
issue appear to impose requirements that the service be supplied through a form of entity that Chinese 
persons control, or in which Chinese persons ha ve a dominant position, or for which there is a 
limitation on the participation of foreign capital.  
The measures at issue therefore appear to accord  treatment to foreign suppliers of audiovisual 
distribution services for audiovisual home entertainm ent products treatment less favourable than that 
accorded to Chinese suppliers of audiovisual distri bution services for audiovisual home entertainment 
products, and to impose restrictions on market ac cess on foreign service suppliers of audiovisual 
distribution services for audiovisual home entertainm ent products.  In Sector  2D of its Schedule, 
China undertook market access and national treatment commitments with respect to the supply 
through commercial presence in China by service supp liers of other Members of distribution services 
for a range of products including, inter alia , audiovisual home entertainm ent products.  Moreover, the 
measures at issue do not appear to fall within the terms, limitations, conditi ons, or qualifications on 
market access or national treatment that China ha s specified in its Schedule for the distribution of 
such products through commercial presence in China by service suppliers of other Members.  The 
measures at issue therefore appear to be inconsiste nt with China's obligations under Articles XVI and 
XVII of the GATS. 
 
* * * * * 
 
The measures cited in this request for consulta tions also appear to nullify or impair the 
benefits accruing to the United States directly  or indirectly under the cited agreements. 
 
We look forward to receiving your reply to the present request and to fixing a mutually 
convenient date for consultations.  
__________