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To: ms.smartest.person who wrote (887)	4/1/2001 5:18:12 AM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

Beijing breaks law for Murdoch By Jason Nisse 31 March 2001 In the latest example of one rule for Rupert Murdoch, another rule for everyone else, the media tycoon has been allowed to buy into China's information revolution in clear breach of local law. Mr Murdoch's News Corporation, thwarted in its attempt to expand into US satellite TV with the purchase of DirecTV, has agreed a $325m (£230m) deal to take a 12.5 per cent stake in China Netcom, which is building the country's first broadband telecoms network. It is jointly investing with investment banker Goldman Sachs and two domestic banks, but local analysts say News Corp will be the biggest gainer as it will be able to sell programming and information services direct to China's fast-growing base of internet users. There is one slight problem with the deal. It is illegal. Chinese telecommunications law prevents foreign investors from owning any part of the country's basic telecoms network – which is defined as including China Netcom. The Beijing government has promised to change the law as part of its reforms to allow it to join the World Trade Organisation. But as the terms of WTO entry have yet to be agreed, the new law has not even been put forward for discussion. Any changes are not expected for at least another year. Even the normally bland official news service in Beijing noted: "The deal is also significant because it is not entirely legal." Well-connected sources point to two factors behind Beijing's decision to bend the rules for Mr Murdoch. One is the overt kowtowing by News Corp to Beijing, most blatantly shown by last month's attack on opponents of the Beijing government by James Murdoch, Rupert's son and the head of News Corp's Asian operations. James Murdoch said the democracy movement in Hong Kong should learn to get used to the absolutist rule of Beijing and not try to destabilise the government. His comments came after complaints about the coverage of the Taiwan elections and the Falun Gong protest on Phoenix, the cable TV network jointly owned by News Corp, available to over 40 million homes in China. The second factor is the involvement of Jiang Mianheng, the son of Chinese Premier Jiang Zemin, in China Netcom. The controversial businessman is chairman of the burgeoning telecoms business. news.independent.co.uk