Extra! China's Press Opens Up!

As censorship eases, papers and magazines may go public

The outbreak of SARS this year seemed to herald a new era of openness for the Chinese press. After an initial coverup, Beijing encouraged newspapers and magazines to be more aggressive. And they were. Throughout the spring, reporters across the country started breaking stories about the spread of SARS, labor abuse, and corruption. But in mid-June, the daily Beijing Xinbao was shut down after it published an article mocking the National People's Congress. And the June 20 issue of Caijing Magazine was pulled from newsstands, apparently for its report about a politically sensitive Shanghai property scandal.

Does this signal the beginning of another press crackdown? Probably not. Even as propaganda authorities reassert control over some publications, China's move toward a market economy will almost certainly result in new openness at the country's 10,000-plus periodicals. Publications today are forced to compete for ever-more-sophisticated readers. And they'll soon be responsible for raising their own capital -- which could well lead to private control. "Dramatic change is taking place in China's media," says Li Xiguang, dean of Tsinghua University's journalism school in Beijing. "The propaganda system is dying."

Superficially, some changes may appear to be little more than bureaucratic reorganization. But in China's Byzantine political system, that can have a profound impact. One reform just announced: an end to the long-established practice of forcing government employees to subscribe to official publications. That will put pressure on papers such as the People's Daily, the official Communist Party mouthpiece. This summer, the State Press & Publication Administration is also proposing to change China's papers and magazines into legal companies, from cultural units administered by local government offices. This shift, still awaiting approval by the party's propaganda department, would make the publications responsible for profits and losses and could well open the door to private investment in media companies. "China's top officials want media reform to happen quickly, just like we do," says Sun Wei, vice-chief editor at Beijing Youth Daily, the capital's No.2 newspaper, with a circulation of 600,000.

Beijing Youth Daily is hoping to win approval for a stock market listing, although no timetable has been set. With new sources of funding, the paper could boost the $100 million in revenues it clocked last year, possibly by acquiring other papers, says Du Min, general manager of Beijing Youth Daily Media Development Corp., which oversees the paper's advertising and other noncontent businesses. Du says the company wants to expand the special sections it publishes on topics such as autos and mobile phones, and might launch a paper focused on entertainment news.

If Beijing Youth Daily is successful, it will be following in the footsteps of at least one other media group. SEEC Holdings, publisher of Caijing and other business journals, last year got onto the Hong Kong exchange through the back door when it bought a majority stake in a maker of calculators and pagers that traded in Hong Kong. "We're shooting to become one of the largest print media companies in China," says SEEC Holdings Chief Executive Wang Boming.

To be sure, there will be limits to how much and how quickly China's print sector opens. Restrictions on foreign investment are likely to continue. While a range of foreign titles -- including Cosmopolitan, Elle, and BusinessWeek -- have Chinese editions, they are published under license by Chinese-owned companies. And China's commitments to the World Trade Organization call only for liberalization of retail and distribution, not content. "We aren't feeling much pressure from outside, because this sector will be opened only very slowly," says He Li, editor-in-chief of Economic Observer, a weekly printed on salmon-colored newsprint and modeled after the Financial Times.

The process of opening up China's media will be uneven and full of false starts, such as the shutdown of Beijing Xinbao. Indeed, there will surely be more temporary restrictions as journalists test the limits of what is now acceptable, says People's University professor Shi Yinhong. "Beijing is trying to make clear which issues are too sensitive and which can now be talked about," Shi says. But even with occasional setbacks, China's media sector is sure to see even greater changes.

By Dexter Roberts in Beijing

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