The announcement may hit some provincial cable-television operators, who have launched joint ventures with overseas firms without official approval from the central government.

The Chinese government has listed the cable-television sector as special and a prohibited area for foreign investment, China Securities, a Beijing-based newspaper run by Xinhua News Agency, quoted the official as saying.

Overseas investment in some mainland cable-television operations is against this rule and will be stopped, the official said.

China has also officially ruled out the possibility of opening its cable-television industry to foreign investment after it joins the World Trade Organization (WTO), the official said.

The news gave a mixed signal to investors as it apparently runs against an earlier press report that the country may allow overseas companies to invest in the sector "through value-added telecommunications service".

The People's Daily Overseas Edition said on Monday that in new rules being planned by the State Council, China's cabinet, foreign investors may engage in the telecommunications service through cable-television networks.

Two separate platforms can be set up on cable-television networks, one applying to the transmission of television programs and another being used for telecommunication services such as two-way digital and voice transmission and these may open to foreign investors, said the newspaper.

But the official explained that the country has agreed to open its telecommunication sector rather than the cable-television industry to foreign investment after its entry to the WTO.

Currently, cable-television companies in China are not allowed to operate value-added telecom business.

The official declined to give any comment on the new rules on cable-television administration, which are reportedly expected to be approved by the State Council by the end of this year.

But he disclosed that a national cable-television network conglomerate will be formed next month. The country's cable-television sector boasts 100 million users and generates an average of 8 billion yuan (US$960 million) of revenue per year.

(China Daily 11/30/2000)