China’s music industry is about to go through a major shake-up by year-end as, according to people familiar with the matter, Chinese government, partnering with portal site Sina, is setting up a new firm to pull off toughest ever regulation over digital music copyrights. In other words, the new venture, from which all Chinese music services would have to purchase copyrighted music, would be monopolizing China’s digital music market.

The music industry insider also revealed that, some final details are still under careful deliberation as the scheme involves the whole music industrial chain. When being asked how the change would affect Chinese digital market, he commented that even though the market seemed to be dominated by one company, it can still be interpreted as a positive signal for the market on grounds that government’s involvement would lead to heavy strike on piracy, which in turn could be a boon for the whole industry.

That said, there’re still some concerns. Monopolistic basically is the synonym of high costs and low efficiency.

The new venture , which would be led by a Sina exec, is said to be opened up by January of next year.