Murdoch extends reach into China

Rupert Murdoch's Star TV has moved a step closer to fulfilling its ambition of expanding his empire into China by winning approval to beam its Chinese language channel into hundreds of thousands more homes.

The Chinese authorities are to grant Murdoch's News Corporation permission to broadcast its Mandarin language channel nationally in top hotels and certain residential areas.

Previously transmission of the Xingdong Weishi entertainment channel has been limited to the tiny province of Guangdong, where it reaches around 1 million viewers via cable.

Star will now be able to beam the channel into all hotels above three stars and to residential areas where significant numbers of foreign residents live, including the 250,000 Taiwanese that live around Shanghai.

The deal, expected to be announced later this week, follows Monday's announcement that Phoenix Satellite Television, 37% owned by News Corp, had also won the right to broadcast its Mandarin InfoNews channel in luxury hotels, diplomatic compounds and other designated venues.

AOL Time Warner, which last year also won permission to broadcast CNN in the Guangdong province in the first significant breakthrough for foreign broadcasters, is now likely to lobby the Chinese government for similar rights.

The decision marks the latest stage in a dramatic rehabilitation of Mr Murdoch's image among Chinese leaders. Eight years ago he incensed the ruling Communist party when he suggested that satellite television was "a threat to totalitarian regimes everywhere".

He later repaired the damage to his reputation by agreeing to drop the BBC's international news channel from satellite broadcasts into China.

Star also agreed a partnership deal with Hunan Broadcasting Group before Christmas to co-produce programmes for China, identified by analysts as the world's fastest growing media market.

The programmes will be shown both on Hunan's channels, which broadcast to millions of viewers in central China, and on News Corp's Star TV channel.

Star TV, the pan-Asian satellite network run by Mr Murdoch's son James and which recorded its first profit last year, has promised to invest over £64m in its Chinese channel over the next three years.