Confusion continues on Chinese foreign investment rules

Cross-governmental rivalry between the Chinese Ministry of Culture (MOC) and the General Administration of Press and Publications (GAPP) appears to be behind continued contradictory statements concerning the legality of foreign investment in the Chinese games industry.

Last week the GAPP issued a statement claiming that all online games will need an official Internet Publishing License before they can be officially released. Additionally, foreign companies would be prohibited from investing in Chinese online game publishers as sole owners, joint venture partners or cooperative partners.

However, all the major Chinese publishers already benefit from foreign investment of some degree and the draconian new rules appear to be a result of in-fighting with the MOC. A transcript of a speech by the MOC's Tuo Zuhai at the recent GDC China event has been obtained by website web2asia and paints a far different picture.

Much of the speech was a rebuke against the GAPP and its "surly interference in domestic online game enterprises". Zuhai emphasised the primacy of the MOC over GAPP and insisted it was the ministry's duty "to ensure the long-term development of China’s culture industry, especially the game industry."

Although Zuhai was keen to emphasis the MOC's authority over GAPP he also referred to a new "Three-Determination" regulation system overseen by both organisations, together with the State General Administration for Radio, Film and Television.

While emphasising its desire to address issues of undesirable content and cheating in online games, the MOC's exact position on foreign investment remains unclear, although more accurate translations of Zuhai's speech may help to clarify the situation.