WTO forces China to open for business online

Businesses must deal with Chinese state companies

China may be forced to allow more commercial activity over the internet after a significant ruling from the World Trade Organisation (WTO).

The 460-word ruling published yesterday says that Beijing must stop forcing US intellectual property rights owners to deal with only government companies, and instead allow them to sell material directly to consumers online.

The move is a significant boost for the US creative industries, which struggle to sell content in China, a potentially lucrative market, because of the logistics of dealing with only a few state firms.

The WTO also hopes the move will help stamp out piracy by making authentic products available at more competitive prices.

When joining the WTO in 2001, China made a commitment to offer open access to foreign-produced creative material. The WTO judges said it had breached this commitment.

US industry groups claimed a major victory. Motion Picture Association of America chief executive Dan Glickman said: "This decision, coupled with the recent announcement from the State Council that the Chinese government intends to lower market access thresholds for the cultural industry, may be an opening we have been seeking."

But China has insisted its system is fair and warned that it might appeal against the trade body's ruling.

"China will carefully evaluate the panel's report and does not rule out appealing on issues of concern to the Chinese side," China's commerce ministry spokesman Yao Jian said in a statement.