Several Observations on the Current Status of the Cultural and Creative Industries in China

1. Several Observations on the Current Status of the Cultural and Creative Industries in China Zhang Jiangang Chinese Academy of Social Sciences

2. I. The Definition of Cultural and Creative Industries ◎ Cultural and creative industries are the commerciali-zation result of copy technology, especially the digital and internet technology. The key is the replicate manufacture and commercial dissemination of the cultural content. So, all cultural industries are medium. ◎Industrial structure of CCI differs from the manufacture in-dustry. In addition to the large media facing the consumers, it has an industrial front-end consisting of a great number of small or micro enterprises. These enterprises provide formatted program or content to the media at the back end of the industries.

3. Two parts of CCI Culture/Arts Creation Creative Industries Small-Macro Companies Cultural Industries Media Group. Life and Cultural Activities

4. II. The Growing of Cultural and Creative Industry in China ◎ The cultural and creative industries in China have a very short history. Because the media industry is not open to the private sector, Chinese cultural and creative industry is still at its enfant stage. ◎ When making the development plan for the then coming 10 years (2001-11), Chinese government used the concept of cultural industries in a positive way. It proposed to “set up cultural products manufacturing and operation institutions and rules”, and “perfect the cultural industries policies”. ◎ The Chinese government realized that cultural products had not only “ideological character”, but also “commercial character”. And some cultural products have stronger ideological character than others. This understanding enables the reform. The establishment and well-administration of domestic cultural market has become a challenging reform task. ◎At that time, Keith Rupert Murdoch was invited to China, and he mentioned that the media industry in US and UK accounted for 5% of their GDP. This number impressed Chinese and became a mid-term target for Chinese cultural industries development thereafter.

5. Statistics and classification of CCI in China ◎ China National Bureau of Statistics began to establish a domestic cultural industries statistic index system from 2003. ◎ NBS did two things: ※ It classified the cultural industries into three categories in 2004. This classification is diagramed as a triple concentric circle. ※ It reported the first annual output value of Chinese CCI: in 2003, the Chinese CCI created 357.7 billion yuan value-added, accounting for 3.1% of the GDP. ◎ In 2012, NBS revised its classification of the cultural industries. It combined the two inner rings of the concentric circles and made slight additions and deletions to the original contents. Now, the Chinese cultural industry includes two parts, 10 categories, 50 sub-categories, 120 items and some extensive items. ◎In 2012, the value-added of Chinese CCI has reached to 1807.1 billion yuan, five times of the number in 2003.

6. the core circle: publication, television and broadcast, film, video products, performance, heritage, museum, library, etc. the periphery circle: internet, tourist service, entertainment, advertisement, exhibition, auction, etc. the connected circle: stationary, toy, photographic equipment, music instrument, printing facilities, television and broadcasting facilities, handicraft article, etc. The classification of Cultural Industries (2004) in China： the core circle the periphery circle the connected circle

7. Yearly Value-added of Chinese CCI

8. III. The Impacts of the Cultural System Reform over the Development of Chinese CCI ◎ The aim of China’s reformation is to establish a socialist market economy system. The reform of cultural system is also market-oriented. There are two tasks of the reform: ※The first is the gradual open of cultural market, i.e. allowing private parties to enter the market. ※The second is to differentiate the government cultural producing departments, and transform the state-owned agencies into enterprises who will compete with other private companies as operators, i.e. transforming them from public serviced units into market players. ◎ The three-year “cultural system reform pilot phase” starting from 2003 made explorations into these two directions.

9. III. The Impacts of the Cultural System Reform (continued) ◎ For the past ten years, the central and local governments of China issued various directive, programmed or supportive policies to promote the development of cultural and creative industries. ◎ In recent years, Chinese government also tried to pursue the mixed economy policy in cultural industries, supporting qualified cultural companies to go public so as to absorb variety sources of capital. ◎ In sum, with discreet but persistent impetus from the national macro-economic department and a group of experts, the cultural system reform of China advances by small steps, and the scale and performance of Chinese CCI progress steadily. It is foreseeable that for a quite long period of time, the CCI in China will continue to grow with a speed in excessive of overall increasing rate of national gross economy.

10. structurally deficient in China CCI ◎ The structurally deficient of CCI is directly related to the contradiction intrinsic to the goal of the cultural system reform. ◎The development policies of Chinese CCI are consisted of two different or even contradicting goals. ※The first is to increase the industrial output value, encourage the enterprises to grow so that they can participate and compete in the international cultural market. ※The second is to regulate the entrance of all cultural products into the market, set up strict review rules for the production and broadcasting of cultural products. ◎Such policies restrict the growing of Chinese CCI on its the speed and space. With such policy regulation, the domestic cultural product supply is tight at some occasions, but superfluous at other occasions. And the overall cultural life (consumption) and cultural activities is neither enthusiastic nor elegant.

11. structurally deficient in China CCI (continued) ◎ Generally speaking, the supply of cultural products is restricted by the demand. However, insufficient variety and quantity of product, and high price as a consequences repressed the elastic effective cultural demand. ◎ However, it is not desirable for the government to see a decreasing output value or increase rate. Hence, they might adopt following two ways to change such negative impressions. ※The first is to include more items into the statistic range. the CCI in China are still at a lower end. ※ The other way is to increase the public spending, the added-value of China’s CCI is inflated. A substantial portion of added-value of the Chinese CCI is extremely ineffective, or “uneconomical”, because consumers dislike such products.

12. IV. Opportunities to Deepen the Reform and Stimulate the Development of China’s CCI ◎ Chinese people’s huge shopping enthusiasm reveal tremendous cultural products consumption potential. ◎ Content innovation is the development bottleneck of China’s cultural and creative industries. Reformation, especially the full open-up of cultural market, will be the only path to this end. The free speech shall be the prerequisite for the market opening up. ◎ The rapid growth of digital and internet technology has completely changed the way media spreads information. Under such circumstances, strict control over the media merely means self-exile. Chinese government should take the current technological development as an opportunity to advance the cultural adminis-tration system reform, “to give full play to the fundamental role of the market”.

13. Government’s role: action or inaction? ◎ On the other hand, Chinese society has great creativity potentials. Self-employed artists in various areas, professional but unincorporated cultural creative workshop (such as music studio) are emerging in large numbers. ◎ It is a clear trend to include the missing portion of cultural and creative economy into the GDP reasonably and wisely through the means of public policy and public finance. It shows an essential way for the countries to scale up and enhance their cultural and creative industries with the assistance from the government. ◎ Should China seize such opportunities and provide new practices for the world?

14. Thank you very much !