BIIA co-founder member Business Strategies Group updated recently its report on media regulations in China due to an important announcement by the Chinese Regulator (GAPP).

On 8th April this year, GAPP released a long-awaited document outlining regulatory changes and planned reforms for China’s print publishing industry. It is important to note that these regulations do not specifically refer to foreign publishers; however, it is expected that the relaxation of the regulations and planned reforms will result in a more positive operating environment for foreign publishers. The key highlights of the announcement are as follows:

  • GAPP will encourage state-owned publishing groups in China to raise private capital through various channels including private investment and through listing on stock exchanges.
  • GAPP will push consolidation amongst state-owned publishing groups with the aim of creating six or seven large influential publishing groups ideally with revenues of at least RMB 10 billion (US$1.46 billion). This industry restructuring is scheduled to be completed by the end of 2010.
  • These large restructured publishing groups will be encouraged to become more creative and to expand overseas to further “spread the influence of Chinese culture.”
  • GAPP also called on state-owned publishing houses to merge with and to partner with private publishing houses in mainland China.

By acknowledging the importance of private publishing houses, this GAPP announcement is seen as “legalizing” the existence of private publishers while retaining the right of oversight.  Prior to this change in policy, private publishers (with the tacit approval of the government) largely operated through back-door deals with state-owned publishers.

In short, this move by GAPP calls on state publishers to become more commercial and competitive and puts private publishers on a firmer legal footing in mainland China. As is often the case with regulatory change in China, this announcement actually simply acknowledges what has already been a marketplace reality for some time. Private publishers are the essential creative and entrepreneurial force driving growth in the industry in China.

It is also worth noting that in the eyes of China’s regulators (in most industries), rules are one thing and rule implementation is an entirely different issue. Most analysts are not expecting to see a radical change, only an approval of what is already working on the ground.

The Business Strategies Group states in its report that the key starting point of any discussion of media regulation in China is the fact that the government in Beijing remains firmly in charge of market. The government’s objective is to maintain control of content and, by extension, all forms of media; print, broadcast events and the Internet.

It is important to recognize that the Chinese government currently does not view media as an industry or a market. Instead, it is seen as both a potential threat that could be used to undermine government policies and a potential tool useful in the formation of public opinion and promotion of government policy. This view informs much of Beijing’s regulatory policy.   

To order the report contact:  Kerry Wong BSG Hong Kong []

BIIA Newsletter April 2009 Issue