CETV says new funds will allow it to take on old rival Phoenix Satellite Television, controlled by Rupert Murdoch.

Hong Kong-based China Entertainment Television (CETV) may be coming back with a vengeance now that it has struck a broadcasting deal with US-based Time Warner group.

The agreement signed last Friday gives Time Warner a production base for Chinese language programming. More importantly, it gives the AOL-Time Warner group a foothold in the all-important China market and CETV a chance to go head-to-head with its old rival - Rupert Murdoch Phoenix Satellite Television, the only other foreign broadcaster with access to mainland China.

It also a personal comeback for entertainment entrepeneur Robert Chua, who invested heavily and has had to weather a series of financial difficulties in recent years. ee as good as Phoenix any day in terms of penetration and wee got top-notch support now. Wel be giving them a run for their money,?nbsp; Chua says.

The Time-Warner deal will see Turner Broadcasting System Asia-Pacific, a division of the group, and Warner Brothers International Television working closely with CETV founder Chua. The station 24-hour Chinese language general entertainment channel will be revamped. Time Warner will offer global marketing and sales support and inject new funds into CETV, though how much money is on the table has yet to be revealed.

A gamble that paid off?

Chua made his name in Television Broadcast Limited, transforming Hong Kong talk show industry with his show 'Enjoy Yourself Tonight'. CETV proved his biggest gamble. Chua pushed a 'no sex, no violence' format for his audience in China. The format worked until Murdoch broadcasting arm was given access in 1997 to Guangdong, one of China richest provinces and CETV was not - hurting CETV's ability to tap the advertising dollars that were crucial to its operation. CETV received a double blow in January 1998 when mainland backers that had pledged investment for the station pulled out. The turmoil reached its height in August 1998 when devoted China viewers, anxious that the station did not close down, sent thousands of small donations to the cash-starved station.

Time Warner deal could signal a 360-degree turn for CETV. The deal with Time Warner comes during a period when telecom, media and technology (TMT) stocks are still hot. Even though venture capital money is becoming much more discriminating, TMT stocks dominate many fund managers?portfolios; they comprised up to 70% of global fund managers?equity holdings in the first quarter of this year.

The Time Warner deal also comes as CETV biggest competitor goes to the market for funds. Phoenix plans to raise between HK$662 million to HK$938 million ($85.4 million to $121 million)  from the market in an initial price offering later this month. If the IPO is successful, the deal could provide a boost for CETV. CETV and Phoenix are both available to China viewers through the AsiaSat 3S satellite. Star TV, which owns a 45% stake in Phoenix, said recently it would commit $500 million in developing its Chinese language programming. It currently produces 1,500 hours of Chinese language programming a year.

Chua isn ready to say how he plans to take on Murdoch Phoenix channel. ure, game shows are very popular in China. There no doubt we will consider shows like ho Wants to Be a Millionaire?'," he says. "But I don want to encourage money culture per se. As chairman, I totally responsible for the content that goes out. I still have to think about the balance here.?

Whatever the plan, it definitely includes getting big revenue streams. That's something Phoenix, which is 45% owned by Shanghai businesman Liu Changle, a former member of China's military and previously part of the state broadcasting establishment, has been able to do with ease from day one.