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Time Warner to pull out of China cinema business
2006-11-09
Warner Brothers International Cinemas, a subsidiary of the giant American media company Time Warner, is pulling out of China because of regulatory changes, a spokesman has said. "The decision is made solely due to a new Chinese rule issued in 2005 which bars foreign investors from owning majority stakes in joint ventures," Gao Ming, a director with the company's public agency, said Thursday. Before that in 2003, a rule opened seven cities in China to majority foreign investment of up to 75 percent on a trial basis. "The company finally made the decision at the end of September after looking at all possible solutions in the past year but unfortunately finding it has no other options," Gao said. The withdrawal will affect six cinemas the company currently runs jointly with its Chinese partners in Shanghai and five other major cities, and its initial plan of expanding into more than 30 cities will have to be abandoned. Gao declined to disclose any figure of the revenue these cinemas have earned, but said they were operated effectively and the one in Shanghai had won the highest box-office income in the country in three consecutive years. He emphasized that Time Warner's other businesses in China including local language film production, a home video joint venture, consumer products and studio stores would not be affected.
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