By Lai Youwei, Huang Bin & Zhang Xiaolu
Research Report Vol.17 No.5, 2015

In recent years, China has actively carried out reform in the key areas of the cultural industry. The market role is given more play in reallocating cultural resources. There is improvement in the system for managing the cultural sector and in the mechanism for cultural production and operation. The policy environment has been optimized for cultural industry. Satisfactory results have been achieved in the development of cultural industry as a result of the measures taken to protect intellectual property right, develop integrated industries, give support to creative talent, make fiscal, taxation and land policies link with cultural finance. China’s cultural industry has embarked on the track of fast development, with steady increase of cultural consumption and continuous optimization of industrial structure.

I. Main Features of the Cultural Industry Development in China

In recent years, the following features can be seen in the development of China’s cultural industry.

1.China’s cultural industry has embarked on the track of fast development, with continuous optimization of industrial structure

China’s cultural industry has embarked on the track of fast development in recent years. According to the statistics of the 3rd national economic census published by the National Bureau of Statistics in Dec 2014, the value-added generated by China’s cultural industries in 2013 is 2.1351 trillion yuan, which is 3.63% of GDP, increasing by 18.2% on a year-on-year basis. Based on the preliminary statistics of the National Bureau of Statistics, the value-added is 2.4017 trillion yuan and its percentage in GDP rose to 3.77% in 2014.

In the industrial structure, the value-added generated by China’s cultural production sector is 916.6 billion yuan, accounting for 42.9% of the total cultural industry; the value-added produced by cultural wholesale and retail sector reaches 214.6 billion yuan, taking up 10.1% of the total; cultural service sector generates value-added of 1.0039 trillion yuan, 47.0% of the total, producing more value-added than the cultural production sector. Among them, the value-added of “cultural creation and design service” is 349.5 billion yuan, accounting for 16.4% of the total value-added of cultural industry. The trend is obvious that China’s cultural industry is developing to be more high-end and content-based. The structure of the cultural industry keeps being optimized. At the same time, China’s cultural industry speeds up its integration with related sectors of the national economy. Cultural elements are increasingly merged into the development of related industries, enriching their cultural connotation and increasing their value-added.

2.The cultural system reform is gradually deepened, with the state-owned or state-controlled cultural businesses having more development vigor and market competitiveness

In 2008, the General Office of the State Council issued Notice of Two Regulations on Transforming For-Profit Cultural Institutions into Business Enterprises and Supporting the Development of Cultural Enterprises in Reformation of Cultural Mechanism, which improved the supportive policies for transforming pro-profit cultural institutions into enterprises and for the development of cultural enterprises. In 2013, China’s for-profit cultural institutions, including publishing, distribution, film-making, TV series-making, broadcasting and TV transmission as well as ordinary state-owned performing arts troupes, newspapers and magazines of non-current affairs finished their transformation into enterprises. In this process, a large number of eligible players in the cultural market were restructured. A great number of state-owned or state-controlled cultural enterprises successfully transformed from relying on government funding to self-reliance, with stronger development vigor and market competitiveness. Some key enterprises have both the total assets and total sales revenue at the level of 10 billion yuan, such as Phoenix Publishing & Media Group of Jiangsu Province.

State-owned performing arts troupes in Beijing, other provinces, regions and municipalities have phased in transformation. These transformed troupes make full use of their own resources, actively explore and also practice the ways to accelerate transformation, produce artistic works, talent development and market expansion. Preliminary fruits of transformation can be seen, with their own development features formed and their artistic works having some influence in the society. For example, China Pingju Opera House makes great efforts in composing plays. They do a lot of work on creating their original plays, including Xin Fengxia, Trilogy of Oresteia, and plays of significant themes and reality themes. Meanwhile, they have done extensive re-creation of traditional plays, such as Dushiniang and Hau Kiou Choaan. Besides, they re-play some traditional plays, such as Exchanging a Leopard Cat for a Prince, Remember Back to the Cup, and Flower is a Go-between. Through these efforts, they upgrade their plays to a new level. In recent years, the Theater keeps its annual sales revenue at about 12 million yuan, half of which is generated from performances and the other half from theater operation. In 2013, China Pingju Opera House was rated as a national key troupe of local operas.

China’s non-government cultural market players also develop quickly during the process of reforming cultural mechanism. By the end of 2003, over 700 thousand cultural market players were registered in industry and commerce administration offices all over the country, with registered capital of 1.2 trillion yuan. By the end of 2014, over 1.68 million cultural enterprises were registered, among which more than 390 thousand were newly registered in 2014.

3.There is a rapid increase in the per capita expenditure of urban and rural residents’ consumption of cultural goods and services as well as education and entertainment, with a widened divide of expenditure between urban and rural residents

Along with China’s economic and social development and the rise of people’s income, cultural consumption is becoming an increasingly important part in household consumption. The average expenditure of urban residents on this part more than doubled from 1098 yuan in 2005 to 2294 yuan in 2013. While that number of rural residents rose from 296 yuan in 2005 to 486 yuan in 2013, increasing by 64% on a year-on-year basis.

However, as cultural consumption increases fast, two problems deserve attention. First, the expenditure gap of cultural consumption between urban and rural residents has widened. In 2005, urban expenditure on cultural consumption was 3.7 times that of the rural. While in 2013, that gap widened to 4.7 times. (In the same period, the divide of urban and rural consumption per capita became even larger, from 3.1 times to 4.1 times.) Second, the percentage of China’s urban and rural residents’ expenditure on cultural consumption in their cash expenditure steadily declines. The share of urban residents’ per capita expenditure on cultural goods and services as well as education and entertainment in the cash expenditure per capita fell from 13.82% in 2005 to 12.73% in 2013. While the figure of rural residents fell from 13.87% in 2005 to 7.95% in 2013. The share of urban residents consumption has been almost stable around 12%-13% in recent years, while that of rural residents fell all the way to about 8%. The fall of urban spending on cultural consumption is mainly due to the lack of quality and quantity in cultural products and services. The fall of rural cultural spending is mainly due to rural residents’ poor consumption power and inconvenience in cultural consumption.

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