Shanghai’s FTZ and liberalisation of the gaming console industry

The Notice of the State Council on the Issuance of the Framework Plan for the China (Shanghai) Pilot Free Trade Zone adopted on 3 July 2013 expressly provides that “foreign-invested enterprises will be allowed to engage in the manufacturing and sales of entertainment and gaming consoles. The consoles with content passing censorship by the culture administrative authorities will be allowed to be sold in the domestic market”. This signifies that the doors to China’s gaming console market have finally been opened to foreign investors.

Regulations in effect

Pursuant to the Opinions on Launching Rectification on Venues That Operate Electronic Games (Guo Ban Fa [2000] No. 44) of the Ministry of Culture and six other ministries forwarded by the State Council in 2000, and notice Xin Chu Lian [2009] No. 13 on further strengthening the advance approval of online games and the approval of imported online games issued by the General Administration of Press and Publishing, the National Copyright Administration, etc., in 2009, no enterprise or individual may engage in the production or sale of electronic gaming consoles, or their parts and components, targeted at the domestic market, and foreign investors are prohibited from investing and engaging in online game operation services in China in the form of wholly foreign-owned enterprises, equity joint ventures, co-operative joint ventures, etc.

However, both the framework plan and the Notice on Implementing the Policies for the Administration of the Culture Market in the China (Shanghai) Pilot Free Trade Zone issued by the Ministry of Culture on 29 September 2013, expressly permit foreign-invested enterprises to engage in the manufacturing and sales of entertainment and gaming consoles in the Pilot Free Trade Zone (FTZ), and further permit sales on the domestic market if the devices pass the content censorship by the culture administrative authorities.