China warns it may appeal WTO order on films and music.

China said Thursday it "regretted" a World Trade Organization decision ordering it to ease some of its curbs on foreign films, music and print, warning that it might appeal.

The decision from the WTO settlement dispute panel a day earlier said China was breaching international trade rules by blocking foreign-owned companies from acting as importers and wholesalers of films, music and printed material.

"China expresses regret that the panel did not reject the US complaint about the import and distribution of printed material, films and music," commerce ministry spokesman Yao Jian said in a statement.

"China will carefully evaluate the panel's report and does not rule out appealing on issues of concern to the Chinese side," he said in the statement.

The United States, which brought the complaint to the global trade watchdog in 2007, claimed overall victory in the dispute, which also affects Hollywood blockbusters.

"Today, a WTO panel handed a significant victory to America's creative industries," said US Trade Representative Ron Kirk.

"These findings are an important step toward ensuring market access for legitimate US products in the Chinese market, as well as ensuring market access for US exporters and distributors of those products."

The Motion Picture Association of America hailed what it called a "landmark" ruling, saying it would be helpful in combating rampant piracy in China.

"This ruling will complement our strategy to fight movie piracy in China," the association's chairman Dan Glickman said in a statement.

"(It) represents a positive step in promoting the growth of legitimate US movies in a market that is growing rapidly, and with great potential."

Despite years of pressure, pirated DVDs remain ubiquitous in Chinese cities, with new movies often appearing on sale with astounding speed after they have premiered on the big screen.

"China and the US share a complex trade relationship where differences naturally occur," the American Chamber of Commerce in China said in a statement Thursday.

"Though the immediate impact of the latest WTO ruling is difficult to gauge, it should contribute to freer, more open markets over time."

China's wealth explosion has made it a potentially lucrative market for foreign media companies, but curbs remain.

Every year, China allows up to 70 foreign films to be shown in local movie theatres, according to a statement the State Administration of Radio, Film and Television issued in 2006.

The agency did not immediately reply to a request Thursday for an update on the number of foreign films that can now be shown.

"Since it entered the WTO (in December 2001), China has conscientiously carried out its obligations under WTO rules in terms of access to the publishing market," Yao of the commerce ministry said in the statement.

"There have been absolutely no obstructions in the channels for letting foreign publications, films and music enter into the Chinese market."

But the issue of foreign access to China's media market has been a bone of contention for years.

"Distribution of foreign films remains highly restricted, with some internationally top grossing movies unauthorized for domestic distribution," the American Chamber of Commerce said in a white paper earlier this year.

"China stands to gain from greater film distribution in many ways, including better development of the indigenous film industry and reduction in demand for pirated movies as legitimate access to international titles is increased."

Daily NewsEgypt 2009

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