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ANNOUNCEMENT 11 Apr 2017
April 11th, 2017 - China's Ministry of Culture unveiled a new policy that gives certain advantages to producers of 'digital culture', i.e. online media and content in general, provided that media restrictions are adhered to.
NUMBER OF INTERVENTIONS
3
SOURCE
PRC Ministry of Culture, April 11th 2017. (文产发〔2017〕8号—文化部关于推动数字文化产业创新发展的指导意见)
http://zwgk.mcprc.gov.cn/auto255/201704/t20170424_493319.html
Tax or social insurance relief
On the 11th of April 2017, the Chinese Ministry of Culture announced a plan to assist the efforts of any firms contributing to China's 'digital culture', in particular, online content and digital media producers.
Eligible firms will be able to take advantage of tax breaks 'such as a 15% reduction in company income tax' and 'pre-tax deductions on creative and designing costs'.
AFFECTED PRODUCTS
In addition to the tax benefits, eligible companies will also be able to make use of 'direct funds' raised by the government through 'bond financing' and 'various types of relevant equity investments'.
Finally, as well as the above, there were two less concrete interventions raised in the text of the announcement.
Firstly, the 'creation of a risk compensation and spreading mechanism' to promote investment from non-state entities in eligible firms.
Secondly, the announcement stipulated that it is very important to 'prevent possible risks'. This will be achieved through content monitoring systems, digital cultural market warning and blacklist systems, and monitoring of credit channels.
Such monitoring is notoriously stringent in China (see 'Great Firewall of China' framework) and disadvantages any foreign firms wishing to enter this market. The precise nature of their implementation are yet to be announced, however.