The tie-up will see the first formal collaboration between the two countries' press arms, both of which are extensively influenced by their governments and are regarded as tools for 'nation-building'.

The move, which will take effect from January, also comes as the government has been exhorting Singaporean businesses to exploit the opportunities presented by China's rapid economic growth.

SPH said yesterday Xinhua-owned Cankao Xiaoxi would carry two pages of business news from its main Chinese-language newspaper Lianhe Zaobao each Tuesday.

Initially, the insert will be limited to Cankao Xiaoxi's Shanghai edition, which has an estimated 200,000 readers. Nationwide, Cankao Xiaoxi claims a circulation of more than three million, according to SPH.

"This collaboration is unprecedented as no major Chinese newspaper has ever entered into a content-sharing agreement with a foreign daily," SPH senior vice-president Chew Keng Juea said.

"It will give Cankao Xiaoxi an additional and regular source of foreign business news. For Lianhe Zoabao, the tie-up means establishing a foothold in the enormous newspaper market in China."

No value for the deal was released, nor the time frame over which it was expected to operate. There was also no suggestion that Xinhua-produced copy would be featured regularly in SPH's Singapore publications.

China controls its domestic media and regards it as a bulwark to help preserve the authority of the Communist Party.

Singapore, which has been ruled by the pro-business People's Action Party since self-government was granted in 1959, exerts near-total control over all domestic media.

Main board-listed SPH is partially held by Temasek, the finance ministry's investment holding unit. But the real levers of power are controlled by holders of special management shares, the issue of which is determined by the government.

Typically, authorities have handed them to the main local banks in the belief that SPH would "remain politically neutral and protect stability and growth because of their (the banks') business interests".

State influence at SPH is further bolstered by the regular placement of former intelligence officers on SPH's board, and the employment of former agents as staff writers. Former SPH group president Tjong Yik Min, for example, used to head Singapore's Internal Security Department.

SPH controls 15 papers in Singapore, including the Straits Times. The company has also been granted a licence to develop interests in television, with two free-to-air channels, Channel U in Mandarin and Channel I in English.

In the year to August, SPH posted a 4.6 per cent drop in net profit to S$307.4 million (about HK$1.36 billion) as group operating revenue fell 12.5 per cent to S$903.5 million.

The fall in profit, which was less severe than most analysts had forecast, was blamed on lower print revenue advertising.

The Singapore government has routinely urged businesses in which it has a stake and those that are independent that they could not afford to ignore the burgeoning China market.

It had also tried to forge harmonious relations with Beijing, although not at the expense of jeopardising its ties with Washington.

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