China lowers threshold of chain stores specializing in audio, video products

China has significantly lowered the threshold of opening chain stores specializing in audio and video products, regarded as a move to curb piracy activities.

According to regulations coming into effect on Dec. 1, 2006, or Friday, the government requires a minimum of 5 million yuan (about 641,000 U.S. dollars) of registered capital to open nationwide chain stores of audio and video products, instead of 30 million yuan (about 3.8 million dollars) before.

The government requires a minimum of 1 million yuan of registered capital to open ordinary chain stores of audio and video products, instead of 5 million yuan before.

The government also simplifies procedures for chain store outlets to start business.

"The motive of these regulations is to promote sale of certified products and obstruct sale of pirated products," said a spokesman for the Ministry of Culture, which issued the regulations on the wholesale, retail and rent of audio and video products.

"I hope people can see this point," he said.

He said if inexpensive certified products are available everywhere, like in online stores, real-life stores, supermarkets, convenience stores, book stores, newspaper stands, communities, tea houses, coffee bars and gas stores, piracy will be much curbed.

"Then I can say we have achieved our expected results," he said.

Chain stores are viewed as a good way to cut circulation cost. For the government, it's also much easier to monitor a small number of chain stores than large numbers of stores of different ownerships.

Chain stores have occupied more than half market shares in some large cities, including Shenzhen, Beijing, Shanghai and Chengdu, but have no significance in many other cities.

Source: Xinhua