China has this thing against the free distribution of media, be it movies, video games or music.  On August 12, the World Trade Organization (WTO) planted a swift kick to China's face when it ruled that the government must stop forcing US artists and production companies to go through state-controlled distributors.  Basically, the WTO told Beijing to lighten up on the restrictions.

In effect, the ruling lifts extra costs and obstructions US and Western movie, music and video game distributors currently face in China; additionally, foreign companies like Apple and Microsoft would be allowed to sell music online within mainland shores. 

Great news for Western businesses, but the People's Republic of China is not pleased; it's not going down without a fight either.  Today, September 22, China appealed the ruling by invoking the defense of its "public morals."  The appeal specifically stated that the WTO "committed errors of law and legal interpretation in concluding that none of the measures are 'necessary' to protect public morals."

When the United States tried to implement this strategy in 2005 in an attempt to ban Internet gambling, the WTO rejected its argument.

"Just like in the US case, China must now prove its trade restrictions are necessary to protect public morals," said Brendan McGivern, a Geneva-based trade lawyer for White & Case LLP.  "It will be a difficult argument to make."

The WTO did, however, allow China to keep protecting its two state-owned theatre companies that show censored movies.  This has not been appealed by the US or other interested parties.