Market power sparks cultural creativity

• Source: Global Times
• [22:05 January 18 2010]
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Zhiwu Chen

Editor's Note:

China's cultural industries, such as publishing and film-making, currently lag far behind its success in other fields, such as manufacturing. While Chinese films and books have been hits domestically, they've made little impact overseas, and many young Chinese prefer foreign products. Guangzhou-based Southern Weekend (SW) newspaper interviewed Zhiwu Chen (Chen), professor of finance at the Yale School of Management, Wang Hongbo (Wang), news director of the China Arts and Entertainment Group, and Lü Wenju (Lü), an expert from the Ministry of Commerce, on how to revitalize Chinese cultural industries.

SW: How are the efforts to promote China's cultural industries going? What obstacles do they face?

Wang: The release of the "Revitalization Plan of Cultural Industries" by the State Council last September is very important. I look forward to its effects but am still cautious.

Since 2005 the government has formulated policies encouraging private capital to enter the cultural field, which has brought unprecedented vitality to cultural industries. But when taking further steps, private capital has met various obstacles.

Although private publishing houses do not enjoy full freedom, they have explored one alternative by purchasing and selling book numbers, which is officially prohibited but has become common in recent years.

Since some publishing houses have book numbers but no capability to make a profit from them, they're better off selling them to private publishing houses with better planning strategy and marketing capability.

Nowadays almost 60 to 70 percent of bestsellers are produced by these private publishing houses.

Major government-run film studios make hundreds of films a year, but how many of them have been hits? In contrast, almost every film produced by private film studios, such as those directed by Feng Xiaogang or Zhang Yimou, is very popular.

According to recent policies, State-run performance troupes face greater difficulty in being privatized, because rather than just making copies, as with a film or a book, every performance needs people involved.

There is huge potential in cultural industries, but we previously lacked clear channels for financing, which this plan will help remedy.