China (Shanghai) Free Trade Zone Detailed Regulation on Game Consoles

In January 2014, China lifted a thirteen-year ban on the sale and manufacture of gaming consoles. This has generated great excitement about the future of the video game industry in China. On April 21, the government of Shanghai announced Detailed Implementation Rules for Cultural Market Opening in the China (Shanghai) Free Trade Zone. As many of us interested to see the content in English, LAI Global Game Services translated its Chinese version [1] from the Shanghai municipal government website.

Translator: Chung-Kuan John Chen

Editor: Michelle Zhao

LAI Global Game Services (www.lai.com) is a specialized game publishing and localization company, helping game developers and publishers achieve success worldwide by localizing and publishing their games in the most lucrative markets overseas.

Detailed Implementation Rules for Cultural Market Opening in the China (Shanghai) Free Trade Zone

These Implementation Rules have been written in accordance with the State Council's Notice on Releasing the Comprehensive Plan for the China (Shanghai) Pilot Free Trade Zone, the State Council's Decision to Temporarily Adjust Relevant Administrative Laws and State Council Regulated Special Administrative Measures for Approval or Access in the China (Shanghai) Pilot Free Trade Zone, and the Ministry of Culture's Notice on Implementing Cultural Market Management Policies in the China (Shanghai) Pilot Free Trade Zone.

I. Foreign-invested enterprises may engage in the production and sales of game and entertainment devices. Game and entertainment devices may be sold to the domestic market after passing content review by the relevant authorities.

(I) Foreign-invested enterprises that have obtained licenses from the commercial authorities in the China (Shanghai) Pilot Free Trade Zone (hereafter known as the Pilot FTZ), and whose licenses state that their business includes “manufacturing and selling game and entertainment products,” may submit their products to content review by the Municipal Administration of Culture, Radio, Film, and TV.

(II) Game and entertainment devices and related products sold in the domestic market should not infringe on intellectual property rights, and should aid in the dissemination of scientific, artistic, and cultural knowledge, benefiting the healthy development of young people. Products may not contain content banned by Article 13 of the Entertainment Venue Management Law, nor may they allow for point betting, coin return, token return, or other gambling features. Text on the product itself, in games, and in instructions should be in the Chinese language.

(III) Foreign-invested enterprises engaged in the manufacture and sales of game consoles should submit the following documents along with physical copies of the product pre-loaded with the game content when applying for content review:

1. The Application Form for Content Review for Game Console Market Access and the Game Console Content Review Document Checklist.

2. A photocopy of the company’s business license.

3. Documents to prove that the game and entertainment device and any game content complies with intellectual property laws, including proof of intellectual property ownership or licensing.

4. Video files or demonstrations of all video content contained within the product. This refers to all content in the final retail version of the product, including video content that does not appear in normal game play. (Files should be submitted on CD-ROM or DVD.)

5. Electronic images that reflect and match the final retail version of the product. There should be one image of the product’s front and two of the product’s sides. The images should be submitted in JPG format with a resolution no lower than 800x600 pixels.

6. Audio files of background music and songs contained in the product, as well as song title lists and electronic text files of lyrics in both Chinese and foreign-language versions.

7. Electronic text of all dialogue, narration, descriptions, and instructions in the product, in Chinese and foreign-language versions.

8. A plan to provide content for the game device. If the plan involves providing content online, Online Cultural Operations Licenses for content providers should also be submitted.

(IV) The Municipal Administration of Culture, Radio, Film, and TV should reach a decision in its review within 20 workdays of the application being received. Products that pass the review will receive a Game Device Content Review Confirmation Form, which will also be filed with the Ministry of Culture. Products that do not pass the review will receive a written explanation of the reasons.

(V) After the foreign-invested enterprise receives the Game Device Content Review Confirmation Form, it may begin selling its game and entertainment console in the domestic market. If there are changes or upgrades in the product’s content, model, or make, the product should undergo another content review by the Municipal Administration of Culture, Radio, Film, and TV.

(VI) The foreign-invested enterprise is responsible for ensuring the quality of the game device it manufactures and sells. The product should adhere to all relevant standards and rules set by the central and municipal government. All products sold on the domestic market should carry the product name, manufacturer name, and manufacturer address in Chinese on both the product itself and the packaging.

(VII) Foreign-invested enterprises which sell game devices to the domestic market should submit a copy of the Game Device Content Review Confirmation Form to customs in addition to the usual customs procedures.

(VIII) Companies that supply content for game devices online should obtain an Online Cultural Operation License in accordance with the regulations set out by the Ministry of Culture in the Provisional Rules for Cultural Management on the Internet and the Provisional Guidelines for Managing Online Games. All game products should be licensed by the Ministry of Culture. Companies that supply content through other means should also follow relevant regulations.

(IX) Commercial, quality supervision, and customs authorities should administer their respective duties in regulating these foreign-invested enterprises. The Pilot Free Trade Zone Administrative Committee (hereafter known as the Administrative Committee) will be responsible for the day-to-day supervision of relevant foreign-invested enterprises.

II. Equity ratio restrictions are abolished for foreign-invested entertainment artists’  agencies. The establishment of wholly owned foreign entertainment artists’ agencies are now permitted, and they may provide services within the municipality of Shanghai.

(I) Foreign-invested enterprises in the Pilot FTZ that have obtained business licenses from the commercial authorities may apply for a commercial performance license for entertainment artists’ agencies and performance venue operator certificate from the Municipal Administration of Culture, Radio, Film, and TV.  Foreign shareholder equity ratio restrictions do not apply to jointly owned or collaborative entertainment artists’ agencies and performance venues.

(II) Foreign-invested entertainment artists’ agencies that wish to apply for a commercial performance license should submit the following documents:

1.  The Entertainment Artists’ Agency Establishment Application Form.

2. A photocopy of the company’s business license.

3. Certificates for at least 3 entertainment agents working full-time at the agency.

(III) The Municipal Administration of Culture, Radio, Film, and TV should reach a decision in its review within 20 workdays of the application being received. Agencies that pass the review will receive a commercial performance license. Agencies that do not pass the review will receive a written explanation of the reasons.

(IV) Foreign-invested enterprises that wish to establish performance venues in the Pilot FTZ’s service trade sector should file with the Bureau of Culture, Radio, Film, and TV within 20 workdays of obtaining their business license. The following documents should be submitted:

1. The Performance Venue Operator Filing Form.

2. A photocopy of the company’s business license.

3. Photocopies of approval documents from the fire safety and public health authorities.

4. Maps and interior plans of the performance venue.

(V) Legally established entertainment artists’ agencies in the Pilot FTZ that organize commercial performances should adhere to the following regulations:

1. Commercial performances in the Pilot FTZ require the approval of the Administrative Committee. For performances by domestic groups and artists, the Administrative Committee should reach a decision within 3 workdays of the request; for performances involving groups or artists from foreign countries, Hong Kong, Macau, or Taiwan, the Administrative Committee should reach a decision within 20 workdays of the request.

2. Commercial performances involving groups or artists from foreign countries, Hong Kong, Macau, or Taiwan require the approval of the Bureau of Culture, Radio, Film, and TV. The Bureau should reach a decision within 20 workdays of the request. Commercial performances by domestic groups or artists require the approval of the cultural authority of the district or county in which the performance takes place. The authority should reach a decision within 3 workdays of the request.

(VI) Commercial performances in performance venues legally established in the Pilot FTZ require the approval of the Administrative Committee. The Administrative Committee should reach a decision within 3 workdays of the request

III. Wholly-owned foreign entertainment venues may provide services in the Pilot FTZ.

(I) Foreign-invested enterprises in the Pilot FTZ that have obtained business licenses from the commercial authorities may apply for an entertainment operation license from the Administrative Committee. During the planning and construction stages, the enterprise may consult with the Administrative Committee.  The Committee should provide guidance according to relevant laws and regulations.

(II) Foreign-invested enterprises that wish to establish entertainment venues in the Pilot FTZ should fulfill the conditions as set by laws and regulations including the Entertainment Venue Management Law and the Entertainment Venue Management Rules. The Administrative Committee should reach a decision within 20 workdays of the request for approval.  Enterprises that receive approval will receive an entertainment operation license. Enterprises that do not receive approval will receive a written explanation of the reasons.

IV. The manufacturing and sale of game and entertainment devices by foreign-invested enterprises, as well as the operations of foreign-invested entertainment artists’ agencies, performance venues, and entertainment venues, will be part of the integrity management system of the Shanghai cultural market.

V. These rules also apply to investors from the Hong Kong SAR, Macau SAR, and Taiwan region, as well as Chinese citizens from overseas, who wish to establish enterprises in the Pilot FTZ to manufacture and sell game and entertainment consoles or establish entertainment artists’ agencies, performance venues, and entertainment venues.

VI. These rules come into force starting on the day of public release.

Shanghai Municipal Bureau of Culture, Radio, Film, and TV

Shanghai Administration for Industry and Commerce

Shanghai Municipal Bureau of Quality and Technical Supervision

People’s Republic of China Shanghai Customs

China (Shanghai) Pilot Free Trade Zone Administrative Committee

[1] http://www.shanghai.gov.cn/shanghai/node2314/node2319/node12344/u26ai38861.html