[this post was written by T.K. Chang (tchang@ivylawgrp.com) of Ivy Law Group, a lawyer currently advising a U.S. company preparing to establish an online music service in China.]

Chinese Internet music services will now be open to foreign investment for the first time, as a direct result of the victory at the WTO in the case brought by the U.S. against China. Under the new Foreign Investment Industrial Guidance Catalogue issued just before New Year’s Day, Internet music services, which previously had been an Internet sector prohibited for foreign investment, will now be open for foreign investment.

The U.S. government (in other words: the major U.S. media companies) has been trying for years to pry open China’s music market for CD’s, DVD’s and online music. The U.S. brought a case against China at the WTO back in 2007, accusing China of discriminating against U.S. media companies in violation of China’s WTO promises. The case would wind torturously through the WTO bureaucracy for years, until finally in January 2010, after China had exhausted all appeals and conceded defeat, the WTO ruled definitively in favor of the U.S. If you run out of things to read on the beach during Lunar New Year vacation and are in a masochistic mood, you may want to try the WTO ruling, which altogether runs over 600 pages.

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