EMPRESAS

In June, Yu Youjun, the executive deputy governor of Hunan Province, came to lunch accompanied by 16 dignitaries at the home in Beverly Hills of Sumner M. Redstone, the Viacom chairman.

Viacom, like many other American media companies, is already active in China. Its MTV network is carried in 10 million homes in Guangdong Province. Two-hour blocks of Nickelodeon programming like CatDog and Wild Thornberries are beamed on the government-run CCTV to more than 120 million homes.

Over a meal prepared by Wolfgang Puck, Mr. Redstone and Mr. Yu, who had requested the meeting, discussed co-productions by MTV International and Chinese companies, Mr. Redstone recalled.
He talked about comedy and dramatic mini-series for Chinese audiences and even brought up the possibility of a theme park, Mr. Redstone said.

But the long-held optimism of Western media companies about venturing into the Chinese market has suffered several setbacks recently. At the beginning of the month, as part of an effort to tighten control over cultural products, China s Propaganda Department, the Ministry of Culture and four other regulators published new rules that further restricted what foreign filmmakers and television companies can do in China. Last week, the News Corporation s plan for a new television channel to be co-owned with a Chinese company was quashed by the government.

Yesterday, Time magazine reported on its Web site that the News Corporation had circumvented Chinese rules by distributing programming, including the National Geographic Channel and an MTV-style music channel, to local cable companies without getting government permission. The report, which quotes a former News Corporation employee named Jiang Hua, said the company received money from several Chinese cable operators through a shell company, Beijing Hotkey Internet.

It is not known whether those accusations have anything to do with the breakdown of the programming deal. A News Corporation spokesman declined to comment on the matter yesterday.

A larger question facing Western media companies is how long the newly tightened restrictions will hold. Pessimists in media organizations worry whether the latest crackdown reflects a longer-term shift under a more cautious Chinese president, Hu Jintao. Optimists suggest that the recent moves are just the latest in a long series of episodic, sometimes short-lived efforts by the Chinese Communist Party to preserve social control.

Over the longer term, access to the China media is crucial to American companies like Time Warner and Walt Disney, in addition to Viacom and the News Corporation. Growth at these giant conglomerates has slowed and their stock prices have been under pressure. If they can export their feature films, cable and TV programs, or even co-produce new shows with Chinese companies, the returns could be substantial.

I don t think China will become a significant part of our growth for three to five years, a top-level media executive said. But the positioning we do now will be important for the future.

Mr. Redstone, who is still awaiting final approval for a deal to make children s programs with a Chinese production company in which Viacom would have an equity stake, expressed cautious optimism that over all, United States companies could continue to make progress in China.

The Chinese government is more skeptical about American media companies, he said, but I have been going to China for eight years and I don t think it will affect Viacom. In China, it is always two steps forward and one step back.

Mr. Redstone is not alone in making visits to China to solidify relationships. Time Warner s chairman, Richard D. Parsons, was recently in China, as was Disney s president, Robert A. Iger. Rupert Murdoch, head of the News Corporation, has long courted Chinese government officials and is now married to a Chinese woman, Wendi Deng, who has played a role in negotiations there on the company s behalf.

Several media executives pointed out that China is preparing for a notable event for its media market - the 2008 Olympics in Beijing - and for that reason cannot go backward for long. Among other benefits it may produce, the Olympics will generate a tremendous amount of advertising, and any cable networks that are already up and running could benefit substantially, according to several media experts.

For now, the focus of the recent restrictions has been on equity ownership of media properties in China, and less on the availability of American programs, although there are also restrictions on the number of American movies.

http://www.nytimes.com/2005/08/29/business/worldbusiness/29china.html >More information...

Wall Street struggled to hold on to tiny gains made during a short-lived respite to rising oil prices, with retailers leading the pack.

The market picked up after oil prices dipped on forecasts that tropical storm Katrina will skirt around oil rigs in the Gulf of Mexico.

The news helped to stall the a record-setting rally in oil prices but late buying of oil pushed crude up 17 cents to a finishing price of $67.49 a barrel.

At the close the Dow Jones Industrial Average was up 0.2 per cent 10,450.63. The S&P 500 also gained 0.2 per cent at 1,212.40, while the Nasdaq Composite rose 0.3 per cent up at 2,134.37.

The temporary fall in oil prompted a stir among big chains such as Best Buy and Lowe’s. Best Buy, the country’s biggest electronics retailer, gained 2.9 per cent to $46.75 while Lowe’s, a home improvement store, climbed 2.1 per cent to $64.19.

Philip Roth, strategist at Miller Tabak, said energy prices would continue to concern investors for the foreseeable future.
“For the first time we are beginning to see a divergence between rising oil prices and oil stocks,” Mr Roth said.

“We have already seen consumer cyclicals being clobbered but the message of this might be that we have reached a point where expensive oil is actually hurting oil stocks.”

The day’s star turn was York International, a heating equipment and air conditioner maker, which found itself the subject of a takeover offer from Johnson Controls, an auto parts supplier. York soared 36 per cent to $56.79. Other ventilation companies climbed too, with Lennox International gaining by 5.8 per cent to $24.46 and American Standard up 2.9 per cent to $44.88.

Another dramatic upward move came courtesy of theme park operator Six Flags, which saw its share price jump 11 per cent to $7.26 after it announced it would seek outside buyers. The move came in the wake of an attempt by investor Daniel Snyder to seize control of the company.

TiVo did rather less well after the digital video recorder maker warned of “challenges” ahead and a wider quarterly loss than expected. The group, which will lose a partnership in October with DirecTV group that had provided the bulk of its subscriber growth, said it would have to increase spending to attract more customers. TiVo fell 15.4 per cent to $5.18.
The sharpest fall on the S&P 500 came from Intuit, which dropped 5.6 per cent to $43.76 after the tax preparation software maker forecast a worse-than-expected loss for the first quarter.

It was also a bad session for Ford and GM both of which had their debt ratings cut to junk status by Moody’s after the market closed on Wednesday. GM fell 0.5 per cent to $34.09 and Ford slipped 1 per cent to $9.82.

http://news.ft.com/cms/s/568cb564-1567-11da-8085-00000e2511c8.html >More information...