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China suspends Apple's online book, movie services

BEIJING--China has shut down Apple Inc.'s online book and movie services in the country, suggesting an intensifying campaign to bring Web content in line with Beijing's stringent guidelines for traditional media.

The shutdown has sent shockwaves through the U.S. high-tech sector, which has long seen Apple as a China success story. The brand's popularity in China has helped it maintain strong growth there in the past two years, even as Beijing's buy-local push has crimped sales for many U.S. electronics makers.

Apple suspended its iBooks and iTunes Movies services in China last week after meetings with the country's video and publishing regulator, the State Administration of Press, Publication, Radio, Film and Television, two people familiar with the matter said.

"We hope to make books and movies available again to our customers in China as soon as possible," the company said in a statement.

The case highlights the challenges of navigating China, where laws are often vaguely worded and only clarified much later. In last week's meetings with Apple, officials pointed to broad new rules issued in February that ban companies with any foreign ownership from engaging in online publishing, one of the people familiar with the talks said.

They also cited a 2008 provision that requires companies to get a license to broadcast videos on the Internet and limits license...