The service trade in the film, audio and video industry experienced a trade deficit of US$20 million in 2005, and China was not included in the top 20 countries in terms of service trade volume in the culture and entertainment sector.

But the export of service trade in film, audio and video sector increased by as much as 64.9 per cent annually, with an export volume of US$134 million in 2005, compared with US$11 million in 2000.

Import volume reached US$154million in 2005, compared with US$ 37 million in 2000, increasing by 33 per cent annually.

China now annually imports 20 films from other countries on the basis of income sharing. Foreign service providers are allowed to participate in cinema construction and innovation, with a share of under 49 per cent.

While encouraging non-public capital to enter the cultural industry, State-owned capital must control over 51 per cent in movie production and distribution. Foreign capital is restricted from movie production.

Wholesale and retail in audio and video products was opened to foreign firms in 2002, one of China's pledges to the World Trade Organization member. Foreign service providers are allowed to set up joint ventures with Chinese enterprises, but the Chinese side must hold a stake of at least 51 per cent.