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Foreign companies look set to play a major hand in the distribution of newspapers, magazines and books around China.

The unprecedented change will terminate the half-century monopoly of State-owned enterprises (SOEs) in the publication distribution business.

Liu Bo, an official with the State Press and Publication Administration (SPPA), revealed this to China Daily.

"Overseas investors and privately-owned enterprises (POEs) may both enter the publication distribution business by setting up joint venture (JVs) with the existing operators", but the State will continue to hold the controlling share, said Liu, director of the department of distribution administration of SPPA.

The revision of existing rules will pave the way for the opening up of China's publication market to both private-sector and overseas capital, he said.

The first set of new rules are likely to be released before the end of March, SPPA Deputy Director Liu Binjie said in an official statement.

The rule change aims to honour China's commitments to the World Trade Organization, of which China became a member in 2001, SPPA officials said.

With the rule change, Liu Bo said China's publication market will be completely open for competitors - both on the mainland and overseas.

So far, SPPA has received applications from some 60 overseas merchants to enter the mainland publishing market. Not all of them have been granted access. However, according to Deputy Director Liu Binjie, "all who are qualified will gain equal opportunities".

On the domestic front, SPPA sources revealed, out of the existing 50,000 distributors, 40,000 were funded by private money. They handled as many books as the SOEs did, except in the only area of textbook distribution.

At the same time, other SPPA officials stressed, opening up the publication distribution market isn't tantamount to a green light for overseas capital to enter the area of content production. China has made no promise to the WTO content-wise. The opening of the market is strictly based on the concept of separation between business and the content, and there should be no foreign capital in editorial operations, they said.

As the State is no longer dominating the publication distribution market, managers of some State-owned distribution companies still showed confidence in the face of challenges.

"As the old protection is removed, the old pressure, such as the assigned distribution quotas, is also removed. And in this way we can make a better response to readers' demands," said Ha Jiuru, president of the Shanghai Xinhua Distribution Group in an interview with China Daily.

China's State book distribution chain is called Xinhua Bookstores, which has no link with the official Xinhua News Agency.

Competing with increasing private-sector and overseas companies, Ha said he believes his company should continue to adopt an aggressive, rather than a defensive, approach. "We will not be limited to wholesale and retail in our operations. There is much wider space in the book distribution business, to allow a successful SOE like ours to develop," he said.