Murdoch's Star to set up wholly foreign-invested ad company in China

Star China, a wholly-owned subsidiary of media tycoon Rupert Murdoch's News Corporation, will soon set up a wholly-owned advertising company in China, which, the group claims, is the first of its kind in the country.

Star Group (China) Corporation Ltd. will start operation in Shanghai as early as possible after going through all government procedures, company sources said.

Chen Yonghong, PR director of Star China, said Star China has obtained approval from the Ministry of Commerce to set up the company and Jamie Davis, president of Star China, will be the new company's president.

According to China's World Trade Organization (WTO) commitment, foreign companies are allowed to hold major stocks in joint ventures with Chinese film and TV program producing companies two years after the country's WTO entry and operate wholly-owned subsidiaries in four years.

But the Closer Economic Partnership Arrangement (CEPA) that has granted Hong Kong more access to the mainland market from Jan. 1 this year has helped Hong Kong-based Star China outreach competitors to enter the huge market ahead of the WTO schedule.

Viewing the move as another business breakthrough following Star's Xinkong TV channel's entry in south China's Guangdong Province in 2001, market analysts said the establishment of the new company stands for a major change in the News Corporation's China development strategy.

"To get a TV channel to work in China has been the News Corporation's goal in the past couple of years," said Huang Xianmin, advertisement professor with the Beijing Broadcasting

Satellite, "but little progress has been made after 2001 although Star Group has made profits in India and Asia as a whole."

"The new advertisement company's next step must be seeking a domestic partner in content production," said Zhao Xiaobin, president of the Global China (Beijing) Media Consulting Co., Ltd.

"Star China used to rely on an advertising agency to provide advertisement service, but the establishment of the new company means Star's operating business has really entered China," said Zhao.