A Study of Beijing's Competitive Advantage As An

A Study of Beijing‘s Competitive Advantage as an Emergent Media Capital

Angela Lin Huang

Bachelor of Law / Master of Law

A dissertation presented in fulfilment of the requirements for the degree of Doctor of Philosophy

Creative Industries Faculty,

Queensland University of Technology

2012

Keywords

Media capital Media industries Media market Media cluster Media policy China Beijing Institution

Abstract

The development of creative industries has been connected to urban development since the end of the 20th century. However, the causality of why creative industries always cluster and develop in certain cities hasn‘t been adequately demonstrated, especially as to how various resources grow, interact and nurture the creative capacity of the locality. Therefore it is vital to observe how the local institutional environment nurtures creative industries and how creative industries consequently change the environment in order to better address the connection between creative industries and localities.

In Beijing, the relocation of CCTV, BTV and Phoenix to Chaoyang District raises the possibility of a new era for Chinese media, one in which the stodginess of propaganda content will give way to exciting new forms and genres. The mixing of media companies in an open commercial environment (away from the political power district of Xicheng) holds the promise of more freedom of expression and, ultimately, to a ‗media capital‘ (Curtin, 2003). These are the dreams of many media practitioners in Beijing. But just how realistic are their expectations?

This study adopts the concept of ‗media capital‘ to demonstrate how participants, including state-media organisations, private media companies and international media conglomerates, are seeking out space and networks to survive in Beijing. Drawing on policy analysis, interviews and case studies, this study illustrates how different agents meet, confront and adapt in Beijing. This study identifies factors responsible for the media industries clustering in China, and argues that Beijing is very likely to be the next Chinese media capital, after enough accumulation and development, although as a lower tier version compared to other media capitals in the world. This study contributes to Curtin‘s ‗media capital‘ concept, develops his interpretation on the relationship of media

industries and the government, and suggests that the influence over the government of media companies and professionals should be acknowledged. Therefore, empirically, this study assists media practitioners in understanding how the Chinese government perceives media industries and, consequently, how media industries are operated in China. The study also reveals that despite the government‘s aspirations, China‘s media industries are still greatly constrained by institutional obstacles. Hence Beijing really needs to speed up its pace on the path of media reform, abandon the old mindset and create more room for creativity. Policy-makers in China should keep in mind that the only choice left to them is to further the reform.

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Table of Contents

KEYWORDS ...... I

ABSTRACT ...... II

TABLE OF CONTENTS ...... IV

LIST OF FIGURES ...... VII

LIST OF TABLES ...... VIII

ABBREVIATIONS...... X

AUTHORSHIP ...... XI

ACKNOWLEDGEMENTS ...... XII

CHAPTER 1 INTRODUCTION ...... 1

1.1 MEDIA CAPITAL ...... 2 1.2 RESEARCH QUESTIONS ...... 8 1.3 RESEARCH SIGNIFICANCE ...... 9 1.4 RESEARCH APPROACH AND METHODS ...... 11 1.4.1 Document analysis ...... 14 1.4.2 Semi-structured interviews ...... 16 1.4.3 Case study ...... 17 1.5 CHAPTER BREAKDOWN ...... 19

CHAPTER 2 LITERATURE REVIEW: GLOBALISATION AND REGIONALISATION 21

2.1 GLOBAL MEDIA PRODUCTION: DISPERSAL AND CONCENTRATION ...... 22 2.2 MEDIA CAPITAL ...... 24 2.2.1 The cultural turn in economic geography ...... 25 2.2.2 Three operating principles ...... 28 2.2.3 The creative field ...... 35 2.3 CRITICISMS OF MEDIA CAPITAL ...... 41 2.4 CONCLUDING REMARKS: WHERE IS CHINA‘S MEDIA CAPITAL? ...... 43

CHAPTER 3 BACKGROUND: HISTORICAL CONTEXT OF BEIJING AS A MEDIA CENTRE ...... 45

3.1 MEDIA SECTOR REFORM IN CHINA ...... 47 3.1.1 Nation building (1978-1991) ...... 48 3.1.2 Cultural security (1992-2002) ...... 56 3.1.3 Soft power (2002-present) ...... 66 3.1.4 The implication of media reform ...... 67 3.2 MEDIA REGULATORY ENVIRONMENT IN CHINA...... 73 3.3 THE GEOGRAPHY OF MEDIA INDUSTRIES...... 77 3.3.1 Beijing ...... 77 3.3.2 Shanghai ...... 80 3.3.3 Guangdong Province ...... 81

3.3.4 Hunan Province ...... 81 3.3.5 Zhejiang Province and Jiangsu Province...... 82 3.4 CONCLUDING REMARKS: THE PROSPECTS OF INNOVATION ...... 83

CHAPTER 4 REFRAMING MEDIA INDUSTRIES’ EXPANSION IN CHINA ...... 85

4.1 MEDIA COMPANIES ...... 85 4.1.1 State-owned media groups ...... 85 4.1.2 Private media companies ...... 88 4.1.3 Foreign media groups in China ...... 90 4.1.4 Implications ...... 91 4.2 NEW CHARACTERISTICS ...... 92 4.2.1 Competition...... 92 4.2.2 Changing attitudes ...... 93 4.2.3 Development of ICTs...... 94 4.3 MEDIA INDUSTRIES DEVELOPMENT ...... 95 4.3.1 The TV industry ...... 96 4.3.2 The film industry ...... 101 4.5 SOFT POWER AND INTERNATIONALISATION...... 106 4.5.1 Media export ...... 106 4.5.2 International capital ...... 112 4.5.3 Co-production ...... 115

CHAPTER 5 BEIJING: THREE PRINCIPLES OF MEDIA CAPITAL ...... 117

5.1 CURTIN 1: FORCES OF BEIJING‘S ACCUMULATION ...... 118 5.1.1 TV industry: forces of accumulation ...... 118 5.1.2 Film industry: forces of accumulation ...... 120 5.1.3 Different routes, same destination...... 127 5.2 CURTIN 2: TRAJECTORIES OF BEIJING‘S CREATIVE MIGRATION ...... 128 5.2.1 Education institutions ...... 130 5.2.2 Career opportunities ...... 132 5.2.3 Initiated by the capital status ...... 133 5.2.4 The mutual learning effect in media migration ...... 135 5.3 CURTIN 3: BEIJING‘S SOCIO-CULTURAL VARIATION ...... 139 5.3.1 Schizophrenic Beijing ...... 139 5.3.2 Struggling international conglomerates ...... 143 5.3.3 Confident domestic players ...... 145 5.3.4 Regulatory backflips ...... 150 5.4 CONCLUDING REMARKS ...... 154

CHAPTER 6: THE CBD INTERNATIONAL MEDIA INDUSTRY CLUSTER IN BEIJING ...... 157

6.1 THE CBD INTERNATIONAL MEDIA INDUSTRY CLUSTER ...... 157 6.1.1 The Central Business District in Beijing ...... 158 6.1.2 The formation of CBD International Media Cluster ...... 161 6.1.3 The CBD International Media Cluster and the capital city ...... 167

6.2 TENSIONS ...... 170 6.2.1 Small and medium companies ...... 171 6.2.2 The content of media products ...... 176 6.2.3 CCTV’s influence ...... 182 6.3 DISCUSSION ...... 186

CHAPTER 7 BEIJING’S COMPARATIVE ADVANTAGES AS AN EMERGENT MEDIA CAPITAL ...... 190

7.1 PREDICTABILITY, CONTROL AND CONVERGENCE ...... 191 7.2 ISSUES ARISING ...... 197 7.3 BEIJING AS A MEDIA CAPITAL IN THE GREAT CHINESE MEDIA MARKET ...... 202 7.3.1 Adaptive informal institutions ...... 206 7.3.2 Continuous adaption and convergence of the media regulatory system ...... 210 7.3.3 The generational transition of power in Chinese film directors ...... 214 7.3.4 Audiences and other issues in the Mainland TV market ...... 217 7.4 BEIJING‘S ADVANTAGES AND CHALLENGES ...... 219

CHAPTER 8 CONCLUSION ...... 223

8.1 POSITIONING BEIJING IN CHINESE MEDIA INDUSTRIES...... 223 8.2 REVISITING CURTIN‘S MEDIA CAPITAL ...... 231 8.3 SIGNIFICANCE OF THIS STUDY ...... 233 8.3.1 Implication for theory ...... 234 8.3.2 Implication for policy ...... 235 8.3.3 Implication for practice ...... 236 8.4 LIMITATIONS OF THIS STUDY ...... 236 8.5 DIRECTIONS FOR FURTHER STUDY ...... 237

APPENDIX I: LIST OF INTERVIEWEES ...... 238

APPENDIX II SAMPLE QUESTIONS FOR SEMI-STRUCTURED INTERVIEW ...... 241

BIBLIOGRAPHY ...... 245

List of Figures

Figure 1 The full path of media reform in China (compiled by the author) ...... 71

Figure 2 The annual overall output value of China‘s media industries

(2004-2010) (Cui, 2005, 2006, 2007, 2008, 2009, 2010, 2011) ...... 95

Figure 3 Growth of radio and TV revenue 2005-2009 (SARFT, 2010c)...... 96

Figure 4 Structure of Radio and TV revenue in 2009 (SARFT, 2010c) ...... 97

Figure 5 Annual TV advertising (1990-2008) (adopted from Cui, 2010)...... 97

Figure 6 TV drama amount and sales (2005-2010) (SARFT, 2010c)...... 99

Figure 7 Broadcasting and viewing proportion of TV drama (2006-2009) (Cui,

2010) ...... 100

Figure 8 Income of China‘s film industry (2004-2010) (Cui, 2011) ...... 101

Figure 9 Film amount and urban box office (2001-2010) (Cui, 2011) ...... 102

Figure 10 Structure of China's box office (2004-2010) ...... 104

Figure 11 International income of China's film industry (2004-2010) (Cui, 2011)107

Figure 12 The international market of Chinese films in 2009 (H. Li & Wan,

2010) ...... 108

Figure 13: Ten biggest film distribution companies in China ...... 125

Figure 14 Beijing CBD east-extension map (adopted from the website of CBD administrative committee) ...... 161

Figure 15 CCTV's old building vs. the new building (compiled by the author from pictures at: www.cctv.com) ...... 164

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List of Tables

Table 1 The gross income of TV sector in Beijing, Shanghai and Guangdong, 2006-2008 (Source: The Yearbook of Chinese Radio and Television 2007, 2008,

2009) ...... 5

Table 2 Chinese film studios‘ co-production with Hong Kong in the first half year of 1993 ("Film Information Express," 1993) ...... 64

Table 3 Comparison of shiye and qiye (adopted from Donald & Keane, 2002) . 72

Table 4 Major national media policies in China ...... 75

Table 5 Major private TV drama production companies in Beijing ...... 78

Table 6 Box office of the top ten domestic films and the top ten imported films in major Chinese cities 2010 (January to September) (SARFT, 2010a) ...... 102

Table 7 Chinese Kungfu films exported overseas (2005, 2006, and 2008) (Yan

& Li, 2010) ...... 109

Table 8 Amount of exported Chinese films to major overseas market (2008,

2009) (Yan & Li, 2010) ...... 109

Table 9 Import and export of China's TV programs in 2008 (SARFT, 2009) ... 109

Table 10 China's major cinema chains in 2002 (adopted from Rong Tang &

Shao, 2005, pp. 284-285) ...... 121

Table 11 China‘s top ten cinema chains in 2010 (data source: SARFT) ...... 124

Table 12 Media clusters in Beijing ...... 158

Table 13 Location of major private media companies in Beijing (distance calculated based on Google Map) ...... 182

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Abbreviations

BFA Beijing Film Academy BGCTV Beijing Gehua Cable TV Networks BTV Beijing TV CAD the Central Academy of Drama CCCCP The Central Committee of Chinese Communist Party CCFC China Co-production Film Corporation CCP Chinese Communist Party CCTV China Central Television CETV China Education Television CFGC China Film Group Corporation CTPC China‘s TV Production Centre CUC Communication University of China HSTV Hunan Satellite TV MoC Ministry of Culture China Central Television NBSC National Bureau of Statistics of China NDRC National Development and Reform Committee of China SARFT State Administration of Radio, Film and Television SMG Shanghai Media Group WTO World Trade Organization

Authorship

The work contained in this thesis has not been previously submitted to meet requirements for an award at this or any other higher education institution. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made.

Signature: QUT Verified Signature

Date: 31 May 2012

Acknowledgements

It would be impossible for me to complete this thesis without the enormous help and support that I have received from many individuals in these four years. First of all, I would like to express my biggest gratitude and thanks to my wonderful supervisors, Distinguished Professor Stuart Cunningham, Professor Michael Keane and Professor Terry Flew. Stuart‘s critical queries have compelled me through my PhD adventure in a very challenging way and finally I could see more. Whenever I encountered problems, big or small, Michael told me: ‗Don‘t worry, I will help you.‘ And he always did what he said. Terry has kindly included me in the work of ARC funded project Creative Suburbia, by which I was fortunate to get valuable opportunities of conferences and publications. You guys make an unparalleled team!

Many thanks must go to my interviewees and friends in Beijing. A thousand thanks go to Yang Li, who not only has contributed her time and insightful opinions to my field work in Beijing but also generously introduced many of her friends to me; and to Yao Min, who introduced me two of her important business partner and my interviews with them have helped me develop a clearer research direction. Without your continuous support, I would not have come so far. Special thanks go to Shen Jiao and her husband, Xiao Zhaojun. They always kindly let me to stay with them in their small cosy apartment and fed me with their beautiful cooking every time when I was back in Beijing.

I was so lucky to have many friends in Brisbane who have accompanied me during my PhD journey. They are Linda Watterson, Bonnie Rui Liu, Wen Wen, Yaxing Zhang, Henry Siling Li, Weihong Zhang, Mimi Yihsin Tsai, Ivy Lau, Vicki Chihsuan Chiu, Wei Song, Ying Zhou, Judy Tan, Falk Hartig, Mark Ryan, Thomas Petzold, Tripta Chandola, Barbara Gligorijevic, Emma Felton, Ct Suria,

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Yong Guo, Juncheng Dai and many others whose name are not mentioned here. I may have been alone from time to time, but I was never lonely because of you. I would like to thank lovely staff from CIF and CCI – Kate Simmonds, Colleen Cook, Sue Carson, Cheryl Stock, Sharon Kolar, Jenny Mayes and Aislinn McConnell, who have been very patient and supportive from the first beginning till the very end. Your smile has meant so much to me. I must thank the China Scholarship Council and the education officer from the Consulate General of the PRC in Brisbane that sponsored and assisted selflessly my study and living in Australia.

Finally I want to express my deepest love and gratitude to my Mum, Hao Yuping, my Dad, Huang Jianjun, and my husband, Liu Liyong. I always knew that I was surrounded by your love and support though we were parted by the ocean.

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Chapter 1 Introduction

When I set out on my PhD journey I decided to look at the phenomenon of clustering. Over the past two decades clusters have become central to economic development in China; the past several years have seen a wave of cultural and creative clusters, such as art zones, reconverted factories, film, TV and animation parks. All cities seem to have similar cluster plans. My interest was Beijing.

However, much confusion exists about clusters. What constitutes a cluster? How do they work? At the same time as the cluster fever broke there was a similar focus on the bigger picture: the nation and the city. How could China be a media power like the US? How could it stop the wave of imports from Korea? People spoke about creative cities, world cities, knowledge cities, cities of design and cities of culture. What kind of city was Beijing? It was the capital of course; it was trying to be many things at once.

In the course of my early research I came across the concept of ‗media capital‘ (Curtin 2003). This seemed to be a new way of viewing Beijing‘s development, by bringing the cluster idea together with the city. The media capital concept, which I will outline below, is based on a high degree of media concentration and successful media products, especially exports. In effect, media capital is another form of clustering. Michael Curtin, the US scholar who coined this idea, believes that Beijing could not be a media capital because it was a media control centre. I wanted to test this claim.

1.1 Media capital

Curtin, together with many other scholars (for instance see Tunstall 2007), believes that nowadays the global media system is no longer a one-way flow of (mainly) US programming to other places of the world. Rather, according to Curtin, the increasing volume and velocity of multi-directional media flows is emanating from media capitals on the periphery of the world media system, such as Cairo, Bombay, Hong Kong and, more recently, Miami. Curtin maintains that media capitals are places where new mass culture forms containing local specificity are generated and exported while media resources and talent come together, interact and exchange.

Instead of depicting global media as an extension of Hollywood, the global media system is de-territorialised and clustered in specific regions where there are particular attractive resources for international investment. The capacity of these emergent media capitals is improving as they become hubs for a range of media flows, which bring resources and new knowledge. Hence media capital is a dynamic concept, as capital status can be won and lost at different development stages. Media capital is a relational concept. Geographically, a media capital must be envisioned in ‗a terrain over which it holds sway and a constellation of related nodes of cultural endeavour‘ (Curtin, 2007, p. 285). A media capital must be a geographic centre within a field of interconnected locales (Curtin, 2010a). A media capital must be able to constantly absorb resources beyond boundaries, produce distinctive prototypes to its competitors, and extend circulation as far as possible (Curtin, 2007, p. 287). Managerial and productive operations of media enterprises are concentrated in a certain location despite the technological, political, and trade liberalisation that spreads their markets and products transnationally. Gradually, with the concentration of resources, reputation, and talent, the city becomes a flux of complex forces and

flows from near and far. At the same time, media enterprises are driven by market forces searching persistently for socio-cultural variations that bring new market opportunities and stimulate distinctive production. Consequently, they can produce new exportable cultural forms and circulate products at multiple geographical locales through flexible and far-reaching distribution operations that interface effectively with local nodes of exhibition and marketing.

As a result, capital in Curtin‘s context has two meanings: a centre of activity (geographical) and a concentration of resources, reputation and talent (economic). Michael Curtin illustrates the temporal dynamism and spatial complexity of the global media from three aspects:

(a) Logic of accumulation. In this principle, Curtin explains the centripetal tendencies of production and centrifugal tendencies of distribution through an economic geography perspective: driven by the pursuit of profit and assisted by the development of ICTs and other technologies, modern enterprises are able to operate across borders of states and regions to reduce production costs, extend the market and increase speed of distribution.

(b) Trajectories of migration. Creativity is a core resource for media industries and comes from pools of labour that continually acquire new prototypes motivated by aesthetic innovation and market considerations. With accumulation of resources, media talent is attracted to the new production centres because of the growth in work opportunities. The creative migration stimulated by job opportunities enhances the attractiveness of the region to other media workers, which in turn drives the growth and expansion of media industries in the region.

(c) Forces of socio-cultural variation. Media products adapted to local traditions, resources and preferences are more easily accepted by audiences in particular geo-linguistic regions due to cultural proximity (Straubhaar 1991). Moreover, national and local institutions, such as ideology, policies and institutions intervene and complicate the production, distribution and migration.

The question of why Beijing wants to be a media capital and how it might become a media capital need to be contextualised in recent history. The thesis argues that Chinese media is at an important crossroads, trying to commercialise and trying to become stronger in media production exports. In the past decade there has been a concerted attempt to utilise clustering and regional media groups as a development strategy. This has obvious limits, which I will discuss in Chapter 6. However, one of the key driving forces behind media development in China is the Chinese ‗going out‘ strategy, which has been taken up in media under the slogan ‗soft power‘ (ruan shili). For Beijing to be a media capital it therefore has to be a producer of soft power. In this thesis I describe China‘s media as progressing through three identifiable periods (1) nation-building (2) cultural security and (3) soft power. It is the last of these that links directly to media capital.

Beijing is the media centre of China. The Chinese media industry has made rapid development in recent years, but it is by no means a balanced development. Beijing, Shanghai and Guangdong Province are the three most prominent ‗media hotspots‘, or what Chinese scholars term ‗media highlands‘ (chuanmei gaodi) (Tan & Wang, 2009). The evidence I provide in this thesis shows that Beijing prevails amongst these competing hotspots. Yu Guoming has evaluated media development in Chinese cities taking into account five aspects: production, profit, consumption, advertising and environment. Beijing tops his list (Yu, 2010). In the TV sector, according to The Yearbook of Chinese Radio and

Television 2007, 2008 and 2009, Beijing, Shanghai and Guangdong Province accounted for more than half of the national TV market of China, and Beijing again assumes the leading position (see Table 1).

With respect to the film industry, according to SARFT, the total box office surpassed RMB ten billion in 2010 (SARFT, 2011a) and domestic films were among the top ten best-selling films of 2010. After Shock (tangshan da dizhen), Let the bullets fly (rang zidan fei), If you are the one 2 (feicheng wurao 2), Detective Dee and the mystery of the phantom flame (di renjie zhi tongtian and Ip man 2 (ye wen 2) (www.sina.com.cn, 2011) are produced or co-produced by domestic film companies located in Beijing, such as Huayi Brother Film Company and China Film Group. In addition, both China Film Group and Huaxia Film Distribution Company, the only two companies authorised to import and distribute foreign films, are located in Beijing.

Table 1 The gross income of TV sector in Beijing, Shanghai and Guangdong, 2006-2008 (Source: The Yearbook of Chinese Radio and Television 2007, 2008, 2009)

2006 2007 2008

Sales of Sales of Sales of Sales of Sales of Sales of TV shows TV drama TV shows TV drama TV shows TV drama (million (million (million (million (million (million RMB) RMB) RMB) RMB) RMB) RMB)

Beijing 502.48 395.86 710.63 438.35 1019.61 809.24

Shanghai 163.62 132.55 230.27 188.09 325.34 133.81

Guangdong 181.48 127.16 209.75 151.87 189.98 139.47

National 2079.44 1499.67 2368.85 1519.67 2420.66 1642.53

Beijing not only prevails in mainland China, but is also attracting media personnel and investment from around the world, especially among the pan-Chinese community. Directors, producers, actors and investors from

Shanghai, Guangzhou, Hong Kong, Taiwan and Singapore have moved to find work and make deals in Beijing (see G. Chen, 2004). Desmond Hui (2003) has observed that Hong Kong is experiencing an inevitable ‗brain drain‘. More multinational corporations moved their Asian-Pacific headquarters to Beijing and Shanghai after China‘s accession to the WTO. The small local market has severely hindered further development of Hong Kong‘s TV and film industry. It is becoming imperative for Hong Kong producers to seek collaborations in mainland China. The Hong Kong film producer Wu Siyuan believes Beijing is China‘s film centre and therefore releasing a film in Beijing is more effective (cited in Y. Zhang, 2009).

In addition to attracting media resources, Beijing has all the stakeholders in China‘s media industries and therefore provides a representative case study for close analysis of how media industries operate in China:

 Beijing is the national decision centre of the media industries. Being the capital of China, it is the locus of government departments related to the media industry, including the State Administration of Radio, Film and Television (SARFT), Ministry of culture (MoC), Ministry of Industry and Information Technology (MIIT) and the General Administration of Press and Publication (GAPP).

 Beijing has the greatest concentrations of domestic media organisations in China. Beijing serves as the major node of Chinese media industries‘ networks and nearly all the national media enterprises are in Beijing, as it is the cultural and political centre of China. The two most important state-owned national media companies, CCTV (which is the biggest TV group in China and covers one third of the national TV market) and China Film Group Corporation (CFGC, which accounts for over 50% of the

Chinese film market) are both located in Beijing. Furthermore, most competitive private media companies, such as Enlight Media (guangxian chuanmei), H.Y. Brother (huayi xiongdi), Poly bona (baoli bona), Orange Sky (chengtian jiahe) and Galloping Horse Film & TV Production (xiaoma benteng) are in Beijing.

 Beijing has a high proportion of creative talent. It is acclaimed as the cultural centre of China. Large numbers of cultural workers have migrated to Beijing. Most renowned Chinese directors, producers, actors and screenwriters are attracted by the symbiosis of a unique local landscape, ancient civilisation and modern pop culture. Many settle down in Beijing. Recently, many entertainers from Hong Kong, Taiwan and even Singapore have taken up residence in Beijing. In early 2009, the Hong Kong film director Chen Kexin (Peter Chan) opened his film studio in Beijing. Ma Chucheng (Jingle Ma), Liu Zhenwei (Jeffery Lau), Chen Jiashang (Gordon Chan), Wu Yusen (John Woo) and Er Dongsheng (Derek Yee) all followed, and signed up with media companies in Beijing.

 Beijing is the headquarters for most international media companies. In 1995, Viacom set up its representative office in Beijing and launched its collaboration with CCTV on entertainment programs and children‘s shows. In 1999, News Corporation set up a representative office in Beijing. Japan‘s Fuji TV started to cooperate with CCTV; broadcasting news produced by CCTV on its news website is a part of their collaboration. At the present moment, international media companies are only allowed to co-produce TV and film. So they often establish covert and ‗under the radar‘ joint ventures with Chinese media organisations and state-owned TV stations, most of which are located in Beijing.

1.2 Research questions

According to Curtin, a media capital exports media product. Though Beijing is the media centre of China, the question still remains: is Beijing a media capital? In most cases, so far, Beijing has not even been considered. In order to address literature gaps related to media capital, I take Beijing, the political capital of China, as a case study. Therefore the primary research question is:

What are the possibilities of Beijing becoming a media capital?

In order to address the primary research question, five subsidiary research questions are proposed:

(1) How do media industries operate in Beijing?

(2) Is Curtin‘s media capital framework able to be directly applied to China? In which way should the media capital notion be revised when it is applied to China?

(3) What factors differentiate Beijing from other known media capitals?

(4) Is there a push for Beijing to be an international media capital? If yes, where does it come from? If not, what is holding it back?

(5) What are the strengths and weaknesses of Beijing as a media capital?

1.3 Research significance

The research has significance for several reasons. The upsurge of interest in cultural and creative industries in the past decade has heightened place competition among Chinese cities (Keane, 2007a, 2011; Liu, Huang, & Zhang, 2008; Zhang, 2008). Shanghai is striving to be a business centre; Beijing, as the political capital, aspires to be a global city through the enhancement of its media assets. Media industry, the most vibrant of creative industries, is worthy of close observation. According to Anke Redl and Rowan Simons, ‗the development of the media, the most political and commercial of modern industries, provides a unique insight into the reality of socialism with Chinese characteristics and the challenges facing China as it emerges as a major world economy and cultural force‘ (Redl & Simons, 2002, p. 18). Prior studies have demonstrated that local business networks are both the key driver of industrial agglomeration (Curtin, 2005; Keane, 2006; Porter, 1998; Scott, 2006b) and one of the defining characteristics of Chinese social, political and communicative organisation (Shoesmith & Wang, 2002). But existing Western studies of China‘s media do not deeply investigate the local network of Chinese media industries, nor do they tend to link cultural studies with geographic deployment. Instead, the focus appears to be on ‗propaganda‘ or ‗ideology‘, deployed as concepts to critique Chinese media as technologies of power (Donald & Keane, 2002). As a result, there is a lack of analysis of the development trajectories arising from the changing political-economic, institutional and social dynamics of Chinese media industries.

In relation to Chinese media industry studies, several principles should be borne in mind: the foremost principle of media regulation in East Asia remains national sovereignty (Goldsmith, 2003); Chinese media industry is still in the process of transition in terms of control (Keane, 2006, p. 837); and, most

importantly, the context of the media industries in China is one where the government not only supervises the media but also intervenes in shaping competition and collaboration between media companies of various scales and ownership forms for its own national development priorities. By contrast, Curtin‘s argument is generally based on the observation of the Western free market model (e.g. Hong Kong and Hollywood). As Michael Keane argues, the theoretical issue of how media and communication studies ought to connect with non-Western contexts is urgently needed, because the current Western theoretical frameworks are incapable of engaging with the field outside the Western enclaves where it is predominantly practised (Keane, 2006, p. 837). Therefore, the media capital concept, although it starts from analysing the historical evolution process of local networks and provides a rational way to elaborate the ceaselessly changing media industry, needs certain modifications when it is applied to Beijing, since it has never been adopted in order to study any part of mainland China.

Based on the above, ‗the tensions, contradictions, compliance, and partial resolution between the state and the market [in China] harbour great possibilities for theory building and testing‘ (Ma, 2000, p. 32) whereas a discourse on the local and the interior of Chinese media industry is still apparently missing both in Western and Eastern hemispheres. Given the complexity of local networks of Chinese media industry, an inside-out and bottom-up approach to the Chinese media industry through the approach of media capital is crucial and vital.

This project will, therefore, be based on the city of Beijing, and will focus on the geographic redeployment of media industry in Beijing caused by the relocation of CCTV. It will investigate the changes to the Chinese media industry, such as infrastructure, business environment, governmental policies and development features generated by this redeployment. It will investigate the ways in which

the network of Chinese media industry relationships are operating in order to identify major factors influencing the clustering process of China‘s media industry, thus informing understandings of geographic locations and Chinese media industry development.

Such an empirical approach enables us to examine the possibilities of Beijing becoming an international media capital, while also adjusting Michael Curtin‘s media capitals model into a framework that can be utilised to understand Chinese media industry from the perspective of cultural and economic geography. It is anticipated that the research program in this thesis will have both practical and theoretical applications, and will make an important contribution to both the Chinese media industry and the research literature.

1.4 Research approach and methods

This research investigates commercial TV and film industries, and excludes sectors such as news and documentary. This parallels Curtin‘s analysis, which mainly focuses on the commercial entertainment sector. In the Chinese context, it is also highly relevant that such sectors as news and documentaries remain very much as media institutions (shiye). They are heavily regulated, which leaves little room for competition. This research also excludes new media services (such as SNS and IPTV), as research on new media requires different research methods, models, perspectives and approaches (Williams, Rice, & Rogers, 1988).

Resolving Beijing‘s media capital status presented me with a complicated set of problems. It would be simple to adopt the approach that Beijing could not be a media capital because of the state‘s socialist ideology and the legacy of

excessive government control and censorship, in line with Curtin‘s media capital model and his observations on Beijing (Curtin, 2010a, 2011). However, political power that is heavily concentrated in Beijing enables the clustering of media industries and provides access for companies to negotiate with the government and even to change the government‘s approach, which will be discussed in Chapter 7. Hence it is necessary to identify difficulties in applying Curtin‘s media capital notion directly in Beijing.

In order to investigate how Beijing might qualify as a media capital I needed to get inside the system, to talk with a range of players or stakeholders. I made use of qualitative methods, primarily semi-structured interviews. While my research interest was specific, at the same time there was a need for flexibility and a degree of open-endedness in the interviews in order to further explore points made by interviewees, where their unique characteristics or circumstances make it necessary or useful (Weerakkody, 2009, p. 167). I used document analysis and case study to complement my interviews in the first and third phases of this research. A qualitative way of thinking was adopted, as this project studies ‗meaning‘ (Hesse-Biber & Leavy, 2006, p. 8), namely: how to understand China‘s media industries clustering and export through Curtin‘s media capital perspective, and to identify what variables and vectors, and to what extent, we needed to revise the media capital idea when applying it to China.

The focus of this research is to come up with a more holistic image of China‘s media industries, one which produces descriptive, interpretive and culturally-situated knowledge by interplaying Curtin‘s media capital idea with data collected during my field work in Beijing. According to Stake (2010), qualitative research relies on human perceptions and understanding. Therefore, the outcomes of qualitative research are representations and presentations of salient findings from the analytical synthesis of data, such as new insights and

understandings of social complexity, the evaluation of a policy‘s influence, and a critique of existing social orders (Saldana, Leavy, & Beretvas, 2011, p. 4). In terms of media and communication studies, Hollifield and Coffey (2006) observed that qualitative research has been widely used in media and communication studies, especially by scholars at the crossroads of media economics and policies, as qualitative research takes nuances and contexts into account when analysing data, discussing results and forming arguments.

On the other hand, this research is related to geography, as it discusses the relationships between media industries and the environment in Beijing to explore how the trajectory of media industries is altered by Beijing‘s physical and social cultural landscape and how the city‘s landscape develops and changes along with the development of media industries. Nowadays, qualitative research is commonly used in geography to address various issues of culture, society, economy and places (Hay, 2010). Qualitative research is able to help geographers understand and explain the social and cultural differences through the perspective of participants in the place. This is more difficult in quantitative research.

This research uses a range of methods, including document analysis, interviews and case study analysis, in order to gather useful and usable data to answer the research questions proposed in this chapter.

According to Al James (2006), research questions should be derived from ‗a simultaneous revisionist cycling‘ between academic debates, government documents and evident socio-economic issues; and case study, interview and social-based qualitative analysis should be adopted to seek the answer to research questions. Hence this study is designed as follows:

I conducted document analysis on relative statistics, policies and other types of government discourses to discover the status quo of media industry clustering in Beijing and to identify the rationale of Chinese media industries‘ accumulation strategies by combining the result with government policies. Informed by the results of the interviews, I undertook a case study of the change of geographic deployment of the media industry in Beijing caused by the relocation of CCTV in order to propose and test answers to research questions.

1.4.1 Document analysis

The first phase of this project is to discover the current situation and characteristics of development regarding media industry agglomeration in Beijing. But due to the insufficiency and the inconsistency of authoritative statistical data in China, statistics are only utilised to provide a broad depiction. Relevant data can be retrieved from Beijing Statistical Information Net1, Beijing Cultural and Creative Net2, eBeijing3, the website of the State Administration of Radio Film and Television, the website of General Administration of Customs of China, the website of Beijing Customs and the website of State Administration of Foreign Exchange. I looked at the Yearbook of Chinese Radio and Television to examine major events and statistical data regarding radio and

1 Beijing Statistical Information Net is the only dedicated website of Beijing Statistics

Bureau to disclose statistic data. For more information, please see: www.bjstats.gov.cn

2 Beijing Cultural and Creative Net is the only dedicated website of Beijing Cultural and

Creative Promotion Center to release information concerning creative industries in Beijing.

For more information please see: www.bjci.gov.cn

3 eBeijing is the Official Website of the Beijing Municipal Government, please look at: www.beijing.gov.cn 14

TV sectors, and several series of Blue Books, including the Report on Development of China’s Radio, Film and Television, the official statistics report published annually by SARFT, the Report on Development of China’s Media Industry, the Report on Development of China’s Cultural Industry. By exploring these data sources, I was able to analyse the development trend of China‘s media industries and identify the scale and function of Beijing‘s media industries.

Moreover, I conducted a document analysis on relevant government policies to reveal the major themes that the Chinese government is pursuing. Most government policies are listed on the websites of the Ministry of Culture, the State Administration of Radio Film and Television, China‘s General Administration of Press and Publication, and China‘s General Administration of Customs.

However, it is necessary to make a connection between the language used in policies and that of the ‗real world‘, between policy-makers who produce documents and the audience for whom the documents were intended, if we are to understand their essential elements. Such policy documents, when read without contextual background, do not reflect the real situation (Prior, 2011). Faced with difficult access to government officials, in this phase I used other document sources, such as political speeches and official commentaries, as complementary components in the system of government actions and discourses. This type of governmental discourse that I drew on included: Chinese senior leaders‘ speeches on Chinese core leadership, which normally can be found at the www.xinhua.com; articles in party newspapers, including The People’s Daily (renmin ribao), Enlightenment Daily (guangming ribao) and The Economic Daily (jingji ribao).

1.4.2 Semi-structured interviews

The second research method that I employed as a means of collecting data and evidence was semi-structured interviews. Weerakkody (2009, p. 166) points out that in media research, interviews allow researchers to collect information from interviewees when the phenomenon under study cannot be directly observed or measured. Moreover, in studies of geography, interviews are often used when investigating complex behaviours and motivations and in understanding how meanings differ among different groups of people (Dunn, 2010).

Interviews involved ‗active asking and listening‘ (Hesse-Biber & Leavy, 2006, p. 119) on the ‗theme of mutual interest‘ (Marshall & Rossman, 2011, p. 142), as these are useful for finding out about people‘s experiences, the way they do things, their motivations, their attitudes, their knowledge, the way in which they interpret things or the meaning they attach to things (McGivern, 2003).

It is still widely believed that because of government control, the Chinese media industry is hamstrung and, accordingly, Beijing will not develop into a media capital. My hypothesis is that a unique economic-political system is actually forming in China. In making this claim, I am drawing on remarks that the Chinese media environment is not like a ‗birdcage‘ (Ma, 2000, p. 28); that is, the government is not indifferent to the vibrancy of the bird, namely media industries. Chinese media companies have never stopped searching for a means to achieve longer sustainability and they have coped with what Ma (2000) called ‗structural coexistence‘ and overt conflicts with government in their own ways. They have found ways of negotiating with government. Beijing is the best place to see these deliberative processes in action.

In order to comprehensively understand the tension between the government and the media industry itself, my interviewees included four categories: managers/directors in Chinese media organisations; media workers; foreign media personnel; and media scholars. Informed by my document analysis, I interviewed people from these groupings in order to further identify causal relationships and patterns of interaction, as well as to access the myriad cultural assumptions, competing possibilities, trade-offs, historical contingencies and multiple motives that underpin corporate decisions and non-decisions that are rendered invisible in survey data (James, 2006, p. 297). For the information of interviewees, please refer to the list of interviewees in Appendix 1.

1.4.3 Case study

A case study typically examines a group of people, an organisation, an event, a process, an issue or even a campaign (Gerring, 2007; Weerakkody, 2009). Multiple realities or diverse perspectives of information are linked up into a coherent framework. More importantly, a typical case is an exercise in theory-building and is the most information-rich and fruitful way for junior scholars to invest their limited resources (James, 2006, p. 294).

For this reason, in the third phase of this project, I conducted a case study on the most significant media cluster in Beijing, the Beijing CBD International Media Industry Cluster, around the CCTV new building at the heart of CBD in Chaoyang District. This is a significant development as China attempts to up-scale its innovative productivity through new forms of creative organisation and management (Keane, 2007a). I looked not only at the cluster itself but also at the migration trend of media industries from the west of Beijing to the CBD in the east of the city. The purpose of conducting a case study was to show

cause-and-effect relationships between government ambitions, local networks and industrial development.

The Beijing CBD International Media Industry Cluster started forming in 2004 and was officially recognised by the Beijing municipal government in 2008. It is located around the CCTV new building (which recently finished construction) at the heart of the CBD in the eastern part of Beijing. Over 80% of overseas news agencies and 167 international media organisations are located in this cluster, including CNN, VOA, BBC, Viacom, Timer Warner, Disney as well as significant Chinese media such as CCTV, Beijing TV and Phoenix TV. According to statistics, over 1700 cultural and media organisations were situated in the CBD by September 2010. A Chaoyang District government‘s report claimed that on average one media company per day has moved into the CBD since 2006 (The Propaganda Department of Chaoyang District Government, "Ten years of CBD," 2010). The Beijing CBD International Media Industry Cluster is the epitome of the clustering process of the media industry in China, and it includes most of China‘s media companies.

CCTV conceived a plan of moving to the core area of CBD in 2004, and the construction of the new building began shortly after. This decision arguably represents a strategic change, from party organ towards an international media enterprise. Moreover, production companies, broadcasting institutions, advertising companies, training organisations, and performance agencies, which used to be in the west of Beijing and close to the current location of CCTV, began moving to CBD soon after this news was released. The reason for the change of media landscape is that a business relation with CCTV is a symbol of strength; a shorter geographical distance to CCTV enhances opportunities for entering into a contract with CCTV. Media companies collaborating with CCTV can benefit from economic profit and from reputational effects. Later on, Beijing

TV (the local TV station of Beijing) and Phoenix TV (the most popular overseas TV station based in Hong Kong) moved to the CBD. A huge conglomeration of media business and media workers has formed since.

In this case study, I collected first-hand data by site visit and combined it with data collected during the document analysis and interviews in the first and second phases. I analysed relationships between major institutional factors, such as media companies, TV stations, administrative sector of clusters, local governments and independent creative forces to probe into the causality and implication of the clustering process.

1.5 Chapter breakdown

The remainder of this thesis is organised as follows:

Chapter 2 explores theories related to media capital and clusters to interpret three principles (logic of accumulation, trajectories of creative migration and forces of social-cultural variation) and to investigate how they act on each other in order to describe the research context. Then the literature gaps are identified and corresponding research questions are proposed.

Chapter 3 begins with a historical review on media reform in China so as to generalise characteristics of Chinese media industries and to understand the role of various stakeholders in China‘s media sector. Following this, the chapter investigates the implications the characteristics of Chinese media industries with regard to the understanding of media capital.

Chapter 4 shows the larger picture of competition in the TV and film industries in China, the relationships between different types of organisations, the regulatory environment and the export of China‘s media industries informed by Chapters 2 and 3.

Chapter 5 focuses on how the three principles of media capital play out in Beijing in the soft power era. This chapter investigates media production and export in Beijing and how the intersection of people and social-cultural variables influences development. In conclusion, I discuss the consequence of the three principles for media industries in Beijing.

Chapter 6 is a case study on the media cluster around CCTV‘s new building in the CBD of Beijing in order to investigate the change of the geographical deployment of media companies and workers. The relocation of CCTV allows us to take a close look at the relationship between the government, industry and location; it demonstrates tensions emanating from the process of agglomeration.

Chapter 7 discusses how different factors interact in Beijing and the kind of ecology that such interaction takes on with regard to media industries; it analyses issues arising from previous chapters and identifies possibilities and difficulties for Beijing to become a media capital.

Chapter 8, the concluding chapter, summarises findings in order to answer the research question of this thesis.

Chapter 2 Literature review: Globalisation and regionalisation

It is often argued that globalisation is engulfing every corner of this earth. For the boosters of globalisation, it seems that the world is becoming flat, as fast developing communication technologies and global transportation have diminished the need for the collocation of management, labour and consumption (Freeman, 2000); consequently, the impact of geographic location on site selection has been reduced (Friedman, 2006). However, Dickens maintains that within the geo-economic map of globalisation we can not only find dispersal but also economic concentration tendencies that give rise to the agglomeration of economic activities in localised geographical clusters (Dicken, 2007, p. 21). This is a core factor in the cultural and creative industries: it is argued that ‗while the distribution and marketing of cultural products spans globally, the development and production – but not always the reproduction – of them is highly clustered in a few major cities, such as London, Los Angeles, Paris, Tokyo, Moscow, Mumbai and so on‘ (Lorenzen & Frederiksen, 2008, p. 155).

In this chapter, I explore the relationship between globalisation, regional identity and media capital. The first section looks at the bidirectional development trend of global media production. Though Hollywood still holds its advantageous position as the global media production centre, the importance of places other than Hollywood is growing rapidly. Media products are produced in Hong Kong, Tokyo, Cairo and Mumbai and are spread trans-regionally. These newly-emerging media centres outside the US demonstrate how satellite technologies and ICTs enable media companies to transmit technology, knowledge and products over boundaries. Furthermore, the emergence of new

media centres shows that location of production can be a unique component for competitive media products.

In this context, it is important to note increasing regionalisation in the global media market while acknowledging that Hollywood still dominates media industries globally. Following this opening discussion I examine the media capital notion and its three operating principles: logic of accumulation, trajectories of creative migration and forces of social-cultural variation. As the key concept, media capital provides a perspective and an approach, which combines a range of theories including political economy, urban studies, economic geography and policy studies, for understanding the development orbit and driving dynamics of media clusters. This leads into a discussion of how to win and keep the status of media capital, a question that will be discussed throughout the following chapters. I introduce theories to illustrate that the key is to combine agglomerated production systems with the geographic milieu so as to facilitate accumulation, to accommodate innovation and to reinforce the cultural identity of the location. Finally in this chapter I offer some critical perspectives on applying ‗media capital‘ directly in China.

2.1 Global media production: dispersal and concentration

In media industries, globalisation has frequently been used as a synonym for Westernisation or Americanisation (Giddens, 2002): this reflects the fact that the best known global movies and TV industry products are produced out of Hollywood (Miller, Govil, McMurria, & Maxwell, 2001). But the wide application of satellite technologies and ICTs has enabled flows of capital, technology, knowledge and people, and has generated a strong multi-directional tendency. In addition, it has been observed that contemporary media products

frequently contain interchangeable elements (Keane & Moran, 2004), although it is also argued that media conglomerates still keep a firm hand on the generation and ownership of intellectual property (Miller, et al., 2001). Therefore, media companies are capable of flexibly choosing suitable production locations for different purposes. Most scenes from Lord of the Rings were shot in New Zealand; the CGI of The Matrix was mainly generated in Australia. Moreover, media companies such as TimeWarner, Disney, News Corporation and Sony, have stretched out their antennae globally by various means, including offshore production, joint ventures, production deals and diagonal mergers. Global media production networks are formed as a result.

Nonetheless, globalisation should not be understood simply as de-territorialisation (Storper, 1997). The emergence of a range of different media centres, especially those outside the US, shows a reverse trend to the simple global dispersal of production. This indicates agglomerations of knowledge, practitioners, and technology in certain areas. It has been argued that the global impact of American media is declining and the preference for local cultural content is still strong despite cultural convergence and globalisation (Tunstall, 2008). The dispersion of production stems mainly from the general belief that it is possible to standardise production processes due to the globalisation of trade, the spread of ideas and access to technologies.

At the same time, a shift from mass production and consumption to ‗flexible specialization‘ and smaller niche markets (Amin, 1994; Harvey, 1989; Lash & Urry, 1987, 1994; Lipietz, 1992; O'Connor, 2007; Scott, 1988) validates that location of production can be a unique component for competitive media products (Scott, 2006a, p. 10), since culture is interwoven with the lived experience of consumers (S. Hall, 1986, p. 39), as well as the symbolic content of media products being highly valued (Harvey, 1989; Lash & Urry, 1994). It is

difficult for a program which meets the tastes and concerns of one audience to have the same merit in a different context (Bielby & Harrington, 2002); as a result, there is at least the potential for a more polycentric global media production system and this tendency is even more obvious in the TV sector than in film. Thus, as Joseph Straubhaar (Straubhaar, 1991, 2010) contends, we see the increasing interdependence of the global media market, one that bears a strong regional flavour.

Outsourcing production in the wake of globalisation has in fact generated a transfer of knowledge or control (Flew, 2007; Storper, 1997), which further enables the formation of ‗complex‘ international flows of programs and a ‗multilayered‘ global media system (Cunningham & Jacka, 1996a; Sparks, 2007). Other than Hollywood in the USA, cities that used to be deemed as the periphery are becoming major centres of cultural production for both local and global markets (Goldsmith, Ward, & O'Regan, 2010; Lorenzen, Scott, & Vang, 2008). TV Globo in Brazil and Televisa in Mexico are not only major national TV producers but are also major soap opera exporters in the Latin American TV market. Japan, Korea and Hong Kong have established themselves as major media producers for pan-Asian markets (Curtin, 2003; Flew, 2007). In terms of the number of films, India remains the world‘s leading film producer, but Nigeria is closing the gap after overtaking the United States for second place (UIS, 2009). Consequently, a polycentric and polycultural global system is forming (Anheier & Isar, 2008).

2.2 Media capital

In 2003, Michael Curtin provided a perspective through which we can understand the spatial dynamics of media industry agglomeration, by proposing

the concept of ‗media capital‘ (Curtin, 2003). According to Curtin, media capitals are ‗centres of media activity that have specific logics of their own; sites of mediation; locations where complex forces and flows interact; meeting places where local specificity arises out of migration, interaction and exchange; places where things come together and, consequently, where the generation and circulation of new mass culture forms become possible‘ (Curtin, 2003, pp. 203-205). Media capital is also a dynamic concept, since although it acknowledges dominance it is also observed that capital status can be won and lost, and the term itself has two subtle meanings: capital as a centre of activity (geographical) and capital as a concentration of resources, reputation and talent (economic).

As media capital is a key concept informing this study, I investigate its relationship to a range of other forces, including political economy, urban studies, cultural economic geography and policy studies, in order to lay out a theoretical framework for understanding the development orbit and driving dynamics of media clusters.

2.2.1 The cultural turn in economic geography

Curtin states that media capital is a relational concept. A city‘s status as a media capital is embodied in its geographical, historical, cultural or industrial relations with other cities. The point here is to establish that media capital provides an interpretation of the global media production system through a perspective that Flew (2009) terms ‗cultural economic geography‘. This approach explains the distinctive relations between space, knowledge and place. We need to critically review this approach in order to better examine Curtin‘s media capital idea.

Economic geography recognises that the central element of economic life is the place-specific and clustered nature of many economic activities (Dicken, 2007; Soja, 2010). Cities and city regions are involved in networks that transcend national boundaries. Therefore place is a kind of node, or point, where relations and connections meet across space; the interaction of relations and connections reshapes the economic landscape of the place (Massey, 1995). However, with the rise of a global cultural economy, cultural goods are no longer largely the possession of the upper middle class. In the cultural, or creative, economy, culture becomes a serial of products that can be sold and purchased in the market. Place acquires a unique identity and becomes a site for generating distinct bodies of knowledge. Hence, in media industries, the global media production system is developing into a ‗polycentric‘ system that embodies a tendency of increasing diversity in global media industry as the development of niche markets (Scott, 2005, pp. 167-168) and their distinctive place-based look, feel and meaning are embedded into their outputs (Lorenzen, et al., 2008, p. 590). All of these propositions signify the ‗cultural turn‘ in economic geography, which proposes that ‗economic categories are themselves discursively as well as materially constructed, practised and performed at different spatial scales‘ (c.f. Flew, 2009; James, Martin, & Sunley, 2007).

Being a complex nexus of diverse disciplinary perspectives rather than a coherent school, cultural economic geography emphasises the mutual constitution and fundamental inseparability of the economic sphere and the cultural sphere (James, 2006). James (2006) holds that, on the one hand, cultural economic geography is a direct response to the shift towards a post-industrial, knowledge-based, global capitalist economy in which social relations are of apparent importance to economic success/failure; and, on the other hand, it challenges structurally determinist accounts of economic change that have previously dominated the field, and argues that the economy determines culture

in a predefined hierarchy of epistemic significance. In other words, we need to locate and contextualize the economic within cultural, social and political relations (Massey, 1995).

Gertler (2003a) outlines three themes relevant to culture‘s implications for economic geography. Firstly, the increasing significance of niche markets push firms to shift away from standardised production to customised production: this requires more flexible production processes and labour divisions, both inside and between companies; the specialised offerings of external inputs and suppliers lowers risks and encourages productivity. Secondly, production processes as well as the process of innovating becomes more and more socialised, hence the shared social attributes embedded in regional cultures facilitate knowledge exchange, inter-firm learning and trust bonds. Thirdly, economic prosperity is increasingly path-dependent as it is conditioned by historical patterns that are embodied in material objects, the experiences of individuals and social structures, and increasing returns to scale that result in the self-reinforcing of economic change, so it is necessary to understand the historical social, economic and cultural paths taken by production regions.

Thus, the economic geography approach informs the following discussion on media capital in the following aspects: (1) in which way the tendencies of media production towards ‗flexible specialization‘ has influenced the formation of media capital; (2) how the local social attributes, or the ‗untraded interdependencies‘ (Storper, 1997), facilitate the further growth of media capital; (3) how habitus and convention alter the development of media capital.

2.2.2 Three operating principles

According to Curtin there are three principles of media capital: (1) logic of accumulation; (2) trajectories of creative migration; and (3) forces of social-cultural variation.

 Logic of accumulation Stimulated by the pursuit of profit and assisted by the development of ICTs and other technologies, modern enterprises are able to operate across borders of states and regions to reduce costs on production and increase the speed of distribution. The logic of accumulation explains the centripetal tendencies of production and centrifugal tendencies of distribution through the economic geography perspective. Geographer David Harvey points out that companies make the most of productive capacity and realise the greatest possible return by concentrating productive resources on the one hand and through the extension of markets on account of the demand for enhancing efficiencies on the other (Harvey, 2005). Transportation and communications technologies, referred to as ‗time-space shrinking technologies‘ by Peter Dicken (2007), overcome natural and political borders and transmit tangibles and intangibles internationally, including materials, products, ideas, images, knowledge and even people. However this generates uneven development and, accordingly, the New International Division of Labour (NIDL). MNCs (Multinational Corporations), the major players in the global economy, subcontract to developing countries for low-wage labour and tax incentives while leaving the more technical and skilled aspects of production in the home country (see Flew, 2008; Fröbel, Heinrichs, & Kreye, 1980).

Toby Miller and colleagues (Miller, et al., 2001) have applied this insight into the media industries in order to illustrate Hollywood‘s domination over the global media production system. Miller coined the term ‗New International Division of Cultural Labour‘ (NICL). Scholars argue that Hollywood majors distribute production activities (‗activities of the hand‘) to developing countries where labour is cheaper in order to both reduce cost and ‗discipline‘ US cultural workers. To some extent, countries competing for this ‗footloose‘ international capital are unwilling to impose new taxes or new policies of constraint to avoid possible reduction in investment, due to its high mobility. On the other hand, they further centralise the generation and ownership of intellectual property (‗activities of the mind‘) as the basis for ongoing revenue streams (Miller, et al., 2001). Miller et al. thus contend that Hollywood sustains and even reinforces its hegemony over global media markets and that the global market indeed serves the hegemony of Global Hollywood in undercutting national film policies (ibid, p. 52). Though the media industries are seemingly open and dispersed, Hollywood‘s power and logic of domination is achieved via its huge globalising network of subcontracted firms, as well as recycling its copyright and products in different national markets (Miller, 2011).

Curtin also indicates that redeploying the creative resources and reshaping its terrain of operations are critical for media companies to win market share and increase profitability. In terms of contemporary media industries, Curtin contends that capitalism develops ‗a disposition towards surveillance and adaptation‘, which realises efficiencies by centralised productive resources and the durative enhancement of delivery systems, rather than just a mode of accumulation (Curtin, 2007, p. 11). Examples, such as Hollywood cinema, the Indian commercial film industry and even the Hong Kong film industry during the post-World War II era, demonstrate this principle well (Curtin, 2008). As public goods, film distribution is different from other forms of industrialised

manufacturing (Hesmondhalgh, 2002; Kepley, 1990). Each film, as a commodity, can still be provided to potential customers after being accessed by existing customers. As technology develops, it gets cheaper and easier to reproduce and circulate a film print. Therefore, for screen industries, their concern is to disseminate their feature films as widely as possible, and in doing so ensure access to theatres in far-flung locales.

‗Flexible specialisation‘ encourages the global hegemony of Hollywood by allowing subcontracting. However ‗flexible specialization‘ can also lead to a transfer of knowledge or ‗control‘ (Flew, 2007, p. 95) and a mutual shift between local and global production systems during the process of economic globalisation (Maxwell & Miller, 2005). Facts also have proved that accumulation is not only central to Hollywood, the globally renowned media capital (Scott, 2005), but also explicit in the emergence of those new media capital which have distributed their media products transnationally (Curtin, 2007; Flew, 2009; Tunstall, 2008), such as Mumbai, Cairo, Rio de Janeiro and Hong Kong. In order to explain this, Michael Curtin maintains that creative migration and social-cultural variation, coming along with the economic accumulation, act on the formation of media capital ‗without privileging one among them‘ (Curtin, 2009, p. 117) while acknowledging that resources and assets can be distributed across multiple locations due to the rapid improvements in transport and communication, global standardising of consumer tastes and production processes. In spite of depicting global media merely as an extension of Hollywood, media capital discerns that the process of globalisation is driven by a dual force that is not only composed of de-territorialisation, but also clustering at specific regions where there are particular attractive resources for international investment. For production centres that are alternatives to Hollywood, their capacity improves as

they become hubs for various media flows, which brings more resources and new knowledge.

 Trajectories of creative migration Creativity is a core resource for media industries. They require pools of labour that are self-consciously motivated by aesthetic innovation as well as market considerations in order to continually acquire new prototypes. Michael Curtin argues that in terms of media capital, managing creative talent involves offering attractive compensation and favourable working conditions and, more importantly, it requires the maintenance of a reservoir of specialised labour, which is the cause of congregation of media companies in particular cities (Curtin, 2007). How is it then that certain cities attract and sustain creative migration, and what urban infrastructures accommodate creative personnel?

According to Peter Hall, creativity is the marriage of art and technology (P. Hall, 1998, 2000). But he also points out that housing the creative industries does not necessarily equal to being a creative city (Hall, 2000). Creative industries create a new urban image that is more attractive to mobile capital and creative talents. Factories and warehouses used to be the magnet pulling workers to industry clusters. However, in the age of creative industries, in replacing old factories and warehouses, culture creates a new urban image, making the city more attractive to mobile capital and mobile professional workers (P. Hall, 2000, p. 640).

Richard Florida associates creative personnel, or what he terms the creative class, with the ‗experience‘ (Florida, 2005, p. 134). Based on his interviews, Florida claims that experiences with high-quality, also explained as active participatory recreation, reflect and reinforce the identity of a creative class. A creative city,

therefore, should be able to provide creative workers with creative lifestyle and consumption, such as affordable spaces, artists, and various nightlife (c.f. Tay, 2005; Ward, 2002). Characteristics of creative cities should lie not only in the vibrancy of the arts and the cultural sector, but also in the ability for generating employment opportunities and output in the service and culture industries (Sassen, 1995). In other words, the key to a creative city is in having the creative industries rooted and embedded in the city. Behind bars, lofts, studios and galleries is a production system generating jobs and opportunities for creative labour, and policies for re-organising urban space for social and economic innovation, which, in turn, improves the quality of urban development.

The emergence of a cluster might be accidental, but its evolutionary spiral follows a familiar trajectory. With the accumulation of resources, media talent is attracted to the new production centres to take advantage of the growing work opportunities. In effect, employment opportunities act like a magnet on creative workers: the chance of finding a job is relatively higher when close to a large pool of employment opportunities. Due to the frequent changes in content output (i.e. audience demand for novelty) constant transactions emerge among contractors, subcontractors and creative talents; the agglomeration of creative labour is encouraged and sustained in order to stimulate novelty (Christopherson & Storper, 1989). For directors and managers, the proximity to local subcontractors and talent allows them to supervise and make changes as frequently as they need. This is desirable for media companies since their central condition of existence is rapid product innovation (Collins, Garnham, & Locksley, 1988).

Agglomeration of talent feeds the media industry, which requires pools of labour that are self-motivated to continually seek out new prototypes. Therefore media talents ‗have a major impact on the value creation or destruction in a

[media] company‘ (Aris & Bughin, 2005, p. 375). What follows from this are mutual learning effects, which can enhance product quality and promote innovation through informal and formal means. Aside from lower costs, learning is generated by agglomerating interrelated producers and talents (Scott, 2000b). Thus, geographical aggregation is not only the centralisation of the workforce but, more importantly, it evolves into ‗active hubs of social reproduction in which crucial cultural competencies are maintained and circulated‘ (Scott, 2000a, p. 33). The creative milieu, which is defined as ‗a shared space and tradition in which people can learn, compare, compete and collaborate and through which ideas can be proposed, developed, disseminated and rejected‘ requires a certain amount of trust and openness (Leadbeater & Oakley, 1999, p. 31).

Economically, the creative milieu provides ‗an essential framework for high levels of information generation and interchange and for frequent experimentation by individual firms in regard to industrial processes and products‘ (Scott, 2006b, p. 7). Culturally, it not only provides creative talent with a space for inspiration but also attracts talented people to communicate and exchange information and knowledge (Gertler, 2004). Their identity as a ‗creative class‘ is constantly reflected and reinforced by participatory recreation (Florida, 2005, p. 134). Thus, ‗a growth spiral‘ is formed. Creative migration is stimulated by job opportunities, which enhances the attraction of the region to other media workers, which in turn drives the growth and expansion of the region (Curtin, 2007).

 Forces of social-cultural variation However, media capitals rarely emerge strictly as a response to market forces. Curtin says that political stability and expressive freedom are central to the rise

of Hong Kong (Curtin, 2007; Flew, 2009). Therefore the third principle, forces of social-cultural variation, is necessary for media capital, according to Curtin.

Firstly, cultural proximity allows appropriation and adaptation of media content according to local traditions, resources and preferences (Ang, 1996). Ang argues that cultural globalisation is non-linear and fractured in the ‗particular appropriation and adaptation of such standardized rules and conventions within local contexts and according to local traditions, resources and preferences‘ (ibid p. 154). Research has also shown how local media industries in regions outside Hollywood successfully dominate local markets and export within geo-linguistic regions. Often this occurs through imitating US generic models and adapting them to local tastes (Sinclair, Jacka, & Cunningham, 1996). Latin American telenovelas, with audiences in the Spanish- and Portuguese-speaking worlds, Hong Kong-produced ‗Canto-pop‘ and action/martial arts films in Chinese-speaking markets, and Australian serial dramas or ‗soaps‘ in English-speaking markets are relevant examples of media programs popular in particular geo-linguistic markets (c.f. Cunningham & Jacka, 1996b; Flew, 2007; Lull, 1991; Straubhaar, 1991; Zha, 1995). The reason is that in the audience‘s pursuit of cultural proximity, which contains not only the language but also the music, costume, humour etc., they will seek the pleasure of recognising their own culture in TV programs (Sinclair, et al., 1996, p. 14).

Moreover, intervening factors, such as national and local institutions, modify and complicate the centripetal tendency of production, the centrifugal tendency of distribution and the migration of creative labour. National differences in state ideology, the nature of political institutions and the nature of economic institutions continue to weigh heavily, ahead of convergence in the institutional and policy environment (Doremus, Keller, Pauly, & Reich, 1998). Transnational corporations (TNCs) are not ‗placeless‘ since nation-state institutions greatly

impact on the corporate operating and TNCs remain living in the local ‗ecosystem‘ (c.f. Dicken, 2003; Gertler, 2003b). By making policies, government can either create a market-driven system out of an intangible public resource or compel industry around the world to adapt to its commercial models.

Recognising the urgent necessity of media policy, Curtin argues that policy-makers should focus on the supply side of the equation and intervene selectively to enhance the productivity of particular media centres and institutions by providing infrastructural, educational and financial resources that might stimulate further growth, because new media capitals can‘t be produced without foundations. On the other hand, policy-makers should support and subsidise media institutions in providing resources for local, national and alternative cultures, on the basis of market dynamics and talent migrations. Policy-makers also should emphasise public cultural infrastructure, such as libraries and public parks, in order to foster civic identity, enhance social civilisation, enhance property value and provide spaces for public discourse (Curtin, 2008).

2.2.3 The creative field

Based on the three principles Curtin has identified, media capitals serve as hubs in different flows of ideas, money, resources, people, culture and technology. But since the status as a media capital can be won and lost, how to win and keep that status is a question for cities that are either already media capitals or are striving to develop into media capitals. Allen Scott (1999) argues that in the domain of cultural industry an agglomerated production system is combined with its immediate geographic milieu, and this combination is greatly encouraged by the increasing returns effects, aside from inter-firm transacting

and local labour market processes. Hence Scott suggests that particular places are dynamically integrated into the system of production, and these products, in turn, define and redefine their places of origin, so that an open-ended relationship will be formed, which can result in continual shifts or a mutually reinforcing stability.

 The formation of creative milieu facilitates accumulation

As far as the media industries are concerned, as a kind of commodity, media content has three distinctive characteristics: (1) high level of risk due to uncertain tastes of consumers; (2) ‗immaterial or intangible forms‘ (Collins, et al., 1988); and (3) ongoing demand for originality and novelty. Since the chances of failure are fairly high in cultural markets (Hesmondhalgh, 2002), the central condition of existence of a media industry is rapid product innovation (Collins, et al., 1988). Therefore, media is generally dominated by the private sector, especially large-scale worldwide corporate organisations that can afford the huge investment and risks. Legal contracts are a significant means of managing risk (Williamson, 1975, 1985). Ultimately, a range of media companies are bound together by contracts and tend to cluster in certain cities. The potential for media capital is thus formed.

In clusters, collective intelligence, which exists at every level of experience, arises from the interaction of enough individual elements to facilitate ongoing self-organisation (Cooke & Lazzeretti, 2008, p. 3). Philip Cooke proposes that the key driver of creative work is the combination of knowledge activity itself and ‗massive complexity from its characteristic dialectic‘ (Cooke, 2006). This combination seeks an environment accommodating ‗social interaction, recognition and consideration from peers‘ (Cooke & Lazzeretti, 2008, p. 4). Only when such an environment is fostered to provide ‗transaction spaces‘ and 36

‗translation zones‘ for creative workers, can implicit knowledge be articulated together with explicit knowledge to engender cross-industry practices. This environment is called creative field by Allen Scott, who refers to structures within industrial agglomerations encouraging learning and innovation effects or a set of interrelationships that stimulate and channel individual expressions of creativity (Scott, 2006a, 2006b). Scott describes the creative field as ‗any system of social relationships that shapes or influences human ingenuity and inventiveness and that is the site of concomitant innovations‘ (Scott, 2006b, p. 3). In a creative field, place, community and the media industries are closely interconnected.

Small and medium enterprises (SMEs) have grown rapidly to become an extremely significant part of overall employment in the creative industries (O'Brien & Feist, 1995, 1997; O'Connor, 2007; Pratt, 1997). In this sense,

as the notions of aesthetic reflexivity and a more intuitive engagement with the eddies and tugs of cultural currents came into play as a central part of business operations, creative workers were no longer to be characterized as crushed by the wheels of a corporate sector whose values they resisted as best they could but possessed the means of operate most effectively (O'Connor, 2007, p. 31).

Allen Scott makes a similar analysis. At first he divides capitalist production into vertically and horizontally integrated corporate models (Scott, 1986). Then, in his detailed investigation on Hollywood, Scott describes the relationship of SMEs and the media production system in the following way:

[T]he production system was significantly reconstituted as a congeries of many small and medium-sized firms linked together in shifting coalitions by flexible production networks. The majors, for their part, took on a variety of new roles, one of the more important of which was to provide central coordinating services to the vertically disintegrated networks proliferating around them. (Scott, 2005, p. 5)

Because both the efficiency of the production system and creativity are enhanced by the networking of SMEs in a particular area, the creative field emerges in its definitive form, which indicates that a creative field is the extension of the ‗learning region‘ (Cooke & Morgan, 1998; Storper, 1996) in the area of creative industries. Based on the above, it can be demonstrated that it is in the creative field that creativity and innovation in the modern cultural economy takes root. In the guise of ‗sets of industrial activities and related social phenomena forming geographically-differentiated webs of interaction giving rise to diverse entrepreneurial and innovative outcomes‘ (Scott, 2006b, p. 3), a creative field integrates different individuals‘ talents and abilities to assume an interdependent character directed to economic ends.

 Creative field accommodates innovation while attracting creative personnel.

An intrinsic element of creative field is that both the field on the one side and its effects on entrepreneurship and innovation on the other are reflexively intertwined with one another (Scott, 2006b, p. 3). One significance of the creative field is that the concept provides a dimension to better understand the relationships of different individuals who work in various forms of clusters and the patterns of the interaction that produces entrepreneurial opportunities, 38

especially the dynamics that accelerate their contribution to regional innovation as agglomeration intensifies. Therefore, innovation in the creative field is driven by the dual dynamic force of knowledge flow and culture, understood in terms of sensibility or creative orientation.

Innovation is fundamentally a learning process, involving doing, using, observing and sharing (Dicken, 2007, p. 98). A result of innovation dynamics is the accumulation and development of relevant knowledge, both tacit and explicit, and media industries are certainly no exception in this respect. The individual worker, the firm, specialised institutions and other typical active sites of knowledge-accumulation in the creative field are able to amplify their power to generate new knowledge when they are interrelated. As discussed in the last section, a great deal of relevant study (Cumbers, Mackinnon, & Chapman, 2003; Porter, 2000) indicates that inter-firm flows of knowledge are an important stimuli of innovation, and locational proximity is critical for knowledge transmission.

Place functions as a guarantee of products (Molotch, 1996), to some extent near the accumulated symbolic value of the fashion designer‘s label (Bourdieu & Delsaut, 1975). Therefore cultural differentiation exerts a significant influence on the function of the creative field in a very tangible way. So the other innovation dynamics are culture and sensibility. As the important component of cultural industries, media industries greatly value prototypes. Thus media industries are highly uncertain and risky due to the constantly changing taste of customers. In order to lower risks, vertical and horizontal disintegration (Caves, 2000; Scott, 2002; Scott, 2005, 2006a; Storper & Christopherson, 1987) are pervasive in media industries, such as subcontracting, which, in turn, leads to intensive transactions between masses of independent producers. Interactions between individuals produced in transactions, combined with other mechanisms,

give birth to distinctive cultural communities in particular places, where workers not only develop technical skills but also share sensibilities and attitudes to enhance their creative capacities.

 Creative field reinforces cultural identity by fostering the creative milieu along with urban renewal.

As Justin O‘Connor contends, ‗cultural industries have to be understood as embedded cultural and business activities; and they have to coordinate tensions of culture and economics and personal and professional life which mainstream business theory hardly explains‘ (O'Connor, 2007, p. 38). As a result, cultural production systems strongly relate to the cities where they are located (O'Connor, 2007). Scott further develops the argument, proposing that cities are ‗collectivities of human activity and interest that continually create streams of public goods that sustain the workings of the creative field‘ and the symbolic meaning of cultural products has been woven into the ‗physical and social fabric‘ of cities where a high portion of the labour force is engaged in cultural industry (c.f. Scott, 2001, p. 13; 2004; 2006b, p. 14).

In a creative economy where creativity dominates economic development, cultural activities power economic growth and culture/creativity turns into the magic device that creates a new urban image, making the city more attractive to both mobile capital and mobile professional workers (P. Hall, 1999, 2000). Although the ‗most superficial manifestations of a creative environment‘ (Leadbeater & Oakley, 1999, p. 31) are workshops, restaurants and bars, in a broader sense, the quintessence of creative cities is about ‗how local urban spaces can be reimagined, rejuvenated and re-purposed within a competitive global framework‘ (Tay, 2005, p. 220). While reimagining, rejuvenating and

reconstructing the local urban spaces, a creative milieu is shaped in the creative field of the city.

The creative field is, therefore, the institutions and infrastructures embedded in media capital, both tangible and intangible, that support media industries through their contributions to the culture and ‗brand‘ of a place. By expounding the self-reinforcing association between place and product, while the creative field is forming in clusters, and is nurturing clusters in turn, localisation and urbanisation meet in the innovative milieu that is central to the creative field and others‘ work in creative industries (Cunningham, 2006; Keane, 2007a; Wu, 2005).

2.3 Criticisms of media capital

Korean scholar Woongjae Ryoo has argued that media theories developed by Western scholars are usually derived from the experiences of Western countries and, therefore, can be problematic when applied to non-Western circumstances. In particular, they tend to neglect serious consideration of the particular state, capital and media relationships that have evolved in Asian countries, especially those Asian countries where government performs a far more active and assertive role of taking on the challenges of globalisation (Ryoo, 2008, p. 887). As a result, there are two literature gaps lying in the existing theories:

In China‘s case, media studies encounter a special type of political-economic reality in which the state is both an actor and a regulator of the market; it complies with the market in managing transnational capital but retains complete political control (Ma, 2000). In fact, the Chinese government and the media market are not external to each other and ‗[t]he state consolidates its power by

promoting a consumer culture that fosters and satisfies social desire‘ (Ma, 2000, p. 28). However, none of the abovementioned theories have taken this recognition into account; they take for granted capitalistic democracy as a default backdrop for media dynamics (Downing, 1996).

In Curtin‘s recent work, he asserts that ‗national political capitals tend not to emerge as media capitals, largely because modern governments seem incapable of resisting the temptation to tamper with independent media institutions‘ (Curtin, 2010b, p. 266). But this conclusion is somewhat hasty since most of the current media capitals have benefitted from state policy: a case in point is Seoul. Curtin‘s media capital‘s framework primarily covers the entertainment sector in the screen industry, notably the commercial TV and film industries, which are strongly supported by Asian governments. China has announced a raft of favourable policies for creative industries. The influence of government policies, both negative and positive, needs to be explored in greater depth.

Curtin structures his media capital concept partly around the argument that media products are distinctive prototypes, rather than redundant batches of products with interchangeable parts, and that each product is unique (Bordwell, Staiger, & Thompson, 1985). However, this view has been challenged by Moran and Keane (2004), who argue that contemporary media products contain interchangeable elements. Although the global industry tries to maintain the distinctiveness (the prototype) of each media product and media conglomerates still keep a firm hand on the generation and ownership of intellectual property (Miller, et al., 2001), the process of copying formats and interchanging elements is more and more evident. Therefore there may be other possible factors or principles modifying and varying the developmental path of media capital.

2.4 Concluding remarks: where is China’s media capital?

In this chapter I have illustrated the bidirectional development of global media production, the media capital notion itself and its three operating principles: logic of accumulation, trajectories of creative migration and forces of social-cultural variation. I have also discussed how to win and keep the status of media capital and have identified that combining the agglomerated production system with the geographic milieu is crucial for the competition of media capital status in terms of clustering enterprises, attracting personnel and enhancing the place‘s environment.

The application of media capital to China is problematic unless some revision is made on the basis of political and social context. Firstly, the concept as it stands oversimplifies the role of government in mainland China. Studies have shown that media industries benefit from a close access to the government in Asian countries. Secondly, the question of uniqueness and IP is confounded by practices of formatting. Places that once were on the periphery win bigger market share and grow into satellite media capitals in their geo-linguistic regions by copycatting and localising successful formats. This has occurred in the case of Hunan Media Group in southern China.

Nowadays, mainland China is striving to compete in the media sector with Hong Kong, Taiwan and Korea. In Curtin‘s model, Hong Kong is still best positioned as the media capital of China despite gradually losing its lustre after 1997. Hong Kong is moving to the mainland to seek new markets, as I have already noted. In Taiwan, media industries have made considerable progress, but these too are increasingly eyeing the mainland (Chua 2012). Meanwhile, place competition is becoming more severe in mainland China. Historically, Beijing is the national media centre. Nevertheless, media industries in Shanghai, Guangdong Province,

Hunan Province, Zhejiang Province and Jiangsu Province are growing fast and are catching up to Beijing.

Is Beijing going to be the next Chinese media capital that can attract media enterprises and personnel and export media products across China, Hong Kong, Taiwan and other countries? If yes, where is the driving force and what modifications do we need to make to the original notion of media capital? Before attempting to answer these questions, I will first, in the next chapter, consider the historical background of media industries in China.

Chapter 3 Background: historical context of Beijing as a media centre

China‘s status in the global media market is rising not only because of its huge potential market and its contribution to the diversity of contemporary media expression, for instance the global recognition accorded fifth generation film directors, but also because of its recent attempts to turn around its cultural export deficit and promote soft power. However, different discourses on Chinese media industries are produced in and outside of China: the enthusiasm of media reform in China vs. the international impression of creative potential held back by excessive regulation; the national ambition of media commercialisation vs. the underdeveloped performance of Chinese media industries globally; the national campaign of enhancing China‘s soft power internationally through media internationalisation vs. the deteriorating international image of China.

In this chapter I review the history of media industries in China. This is important if we are to apply the media capital concept to what Lee describes as a ‗unity of contradictions‘ (2009). I elaborate on historical background and review media reform progress in China through three stages. Following this, I present the media regulatory environment in China and the current geographic distribution of media industries. Finally, I offer some reflections on Beijing‘s national media ‗centre‘ status.

Media has strong interconnections with politics and economics. Political economists argue that ‗property ownership, economic control and class power [are] inextricably tied together‘ (Murdock & Golding, 1977, p. 28). Media has an increasingly large economic significance in capitalist economies being

among ‗the first and foremost industrial and commercial organizations which produce and distribute commodities‘ (Golding & Murdock, 1973, pp. 205-206). The range and content of cultural products can be explained by situating them within the nexus of the material interests which frame their creation and distribution (Murdock & Golding, 1977).

As discussed in Chapter 2, one of the keys to developing and sustaining media industries is innovation: media capital from this perspective requires suitable institutions. This has been termed ‗a workable platform‘ by John McMillan. He identifies five elements: ‗information flows smoothly; property rights are protected; people can be trusted to live up to their promises; side effects on third parties are curtailed; and competition is fostered‘ (McMillan, 2002, pp. ix-x). However, as Joseph Chan has argued, media is a double-edged sword in China: it is about maintaining ideological control on the one hand and embracing marketisation on the other (Chan, 1993, 2003).

Ever since the founding of the People‘s Republic of China, media has been an important propaganda tool. It was strictly controlled by government to consolidate socialist ideology. Hence in China ‗information‘ must be censored before it is released to the public. The monopoly status of state-owned media institutions for most of the four decades after ‗liberation‘ led to a difficult market environment for private media companies when they were finally given air to breathe; the CCP‘s voice has to be embodied in media content. From the 1990s, the Chinese government has been encouraging the transition from government-funded cultural institutions (shiye) to industries (chanye/qiye); a rapid process of commercialisation has taken place in the Chinese media sector. This dual nature of Chinese media industries complicates and deepens the specificity of Chinese media studies.

3.1 Media sector reform in China

As an old Chinese saying goes, history is the mirror in which one can foresee one‘s rise and fall (yishi weijian, keyi zhi xingti). For that reason it is necessary look back at media reform history in China before digging into ongoing developments. Chinese media wasn‘t industrialised until the late 20th century. Before 1978, being fully under the government‘s control, China‘s media sector was strongly associated with the socialist planned economy. At that time, media was the government mouthpiece rather than an industry; there were no media firms in China at all, only government-owned media institutions (shiye).

Moreover, media was not a neutral observer but a function of government, a soldier in the national army. Its mouthpiece function was embodied not only in the management system in which the CCP played the core role, and where it had no commercial function at all, but also in the media content that took political propaganda as its only orientation (Xinling Chen, 2009). Direct government funding was the only legal revenue resource for media organisations; and all of the inputs, revenue, employee benefits and equipment were under the administration of the government. Therefore the only concern of media players at that time – state-owned TV stations and film studios – was ‗political correctness‘ (ibid, p. 45). As a result, the priority of media was given to political propaganda as a non-profit public service institution sponsored by the nation (X. Liu, 2007).

It has been over thirty years since China started its media industry reform in 1978. Up to the present, the reform has experienced three phases, and is still going. These three phases are now discussed in more detail.

3.1.1 Nation building (1978-1991)

The first phase is the nation building period from 1978 to 1991. During this period, in order to build a strong nation, China started to recognise the economic properties of media in order to reduce the government‘s financial burden. Shortly after the Third Plenary Session of the Eleventh Central Committee of CCP, eight newspapers in Beijing, including the People‘s Daily (renmin ribao), requested a pilot reform according to ‗institution grouping, enterprise management‘ (shiye danwei, qiyehua guanli). The Ministry of Finance approved the request in 1978. In January 1979, Shanghai TV broadcast the first commercial advertisement, heralding the beginning of modern screen industries in China. CCTV (China Central Television), one of the pilot units, set up the China Television Service Company and produced China‘s first international co-production, which was co-invested with Japan. The official endorsement was given when the Propaganda Department of Central Committee of CCP issued the ‗Notice on Publishing Commercial Advertisements of Foreign Goods‘ (B. Cao, 1999). At the National Radio and TV Planning Conference in February 1980, the economic value of media was recognised by the central government for the first time (Zhao, 2004).

Since then, the Chinese government has gradually, and sometimes reluctantly, loosened its hold over the media sector in order to facilitate competition and accelerate economic development. Only the central government and the provincial governments were allowed to set up television stations. In 1983, the ‗four-tier system‘ (siji ban) policy was issued at the 11th National Broadcast Conference to improve the ‗Two-level‘ status so that city and county governments were able to build up local TV stations and broadcast local news and programs in addition to the National central station (CCTV) and provincial stations. The ‗decentralization of administration‘ (Keane, 2007a) resulted in

local governments entering the media field. This conference pointed out that media reform should explore all possible sources of revenue and raise the economic efficiency of the broadcasting sector. Advertising became the largest revenue source of China‘s media sector. In 1983 the total income from advertising was 120 million RMB in newspapers, magazines, TV and radio. By 1992 the TV sector alone had received over 2 billion RMB from advertising (Xie, 2007).

However, the media system did not change a great deal, as at the time media only sought to broaden finance sources to cover the shortage of government funding. As the former Chinese president Jiang Zemin said, ‗the leadership has to be in the hand of Marxists‘ (Jiang, 1989). This backward-looking management system hampered the function of market law and severely restricted media development. For instance, the positive influence of commercialisation in the TV sector was not reflected in the film sector. In 1979, the number of audiences for films was 27.9 billion, although only 50 films was produced (Huang, 2007). However, by the end of 1980s, the number had dropped to 16.8 billion, despite more films being available in cinemas (Rong Tang & Shao, 2005). The reason is that during this period the governing authority of film was the State Film Bureau of China‘s Ministry of Culture (MoC), which was not placed under the State General Administration for Radio, Film and Television (SARFT) until 1986. National distribution could only be carried out by the China Film Group; local distribution was managed by the local branch of MoC and could not determine the screening arrangements. Under the planned economy framework, distribution was disconnected from the production. Consequently the distribution sector suffered heavy losses and had to shift their focus to other business, which resulted in the serious financial difficulties of film studios (Gao, 2008).

 TV in Beijing (1978-1991) Beijing has been the centre of the TV industry since the late 1950s. China‘s first TV station, Beijing TV, was set up in 1958. Beijing TV was renamed China Central Television (CCTV) in 1978. CCTV has played a significant role in China‘s TV industry development. Its competition and relationship with provincial TV stations has changed over the three stages of media reform. Hence the logic of the TV industry development in Beijing has also evolved as a consequence of the dynamics generated by changing competition.

For a long time, film was the most important content on TV screens in China. Before 1979, CCTV was only on air for 2-2.5 hours every day, and during the broadcasting time it played one film of around 1.5-2 hours and filled the rest of time with TV news and some studio programs. Meanwhile, the provincial TV stations‘ task was to relay CCTV to local audiences. At that time, there was hardly any TV content production in China. However, after the Cultural Revolution, CCTV, for the first time in China, produced eight TV dramas and evoked a positive response from audience across the country. Feeling threatened by the booming TV industry, the film sector refused to provide any new film to any TV station. This caused a serious shortage of available content to TV stations, especially CCTV. The National Broadcasting Authority (the predecessor of SARFT)‘s call for longer air time aggravated the content shortage to some extent.

In order to solve the content famine, the first National TV Program Meeting was held in Beijing in August 1979. In this meeting the National Broadcasting Authority advocated that all TV stations produce TV dramas, and announced that China would import film and TV dramas from overseas. Under the pressure of audience and the government, CCTV reached out in 1979. Ten TV dramas and one American TV drama were purchased from Hong Kong. The American

TV drama was ‗The Man from Atlantis‘, which unfolded a whole new world before Chinese audience‘s eyes.

Inspired by audience‘s fondness for TV dramas, in 1981 the famous Chinese dramatist, Jin Shan, suggested to the Propaganda Department of the Central Committee of the Communist Party of China that they ‗rouse the mass to make TV dramas‘ (fadong qunzhong lai gao dianshiju) (Guo, 2008, p. 194). By ‗the mass‘ he meant including as much as possible professionals and organisations from other sectors, such as theatre and film, in TV drama production, instead of only TV stations. Once approved by the central government, many film studios and theatrical groups established a TV drama office and started the production of TV dramas. The Beijing TV Art Centre, China‘s first TV production studio, and regarded as China‘s DreamWorks of quality TV dramas, was set up in September 1982.

Later, in 1983, China‘s TV Production Centre (CTPC) was established by merging several TV drama production centres into CCTV‘s TV drama department. These two centres have made a significant contribution to China‘s TV industry by developing new genres, commercialising operations and exporting programs. The Beijing TV Art centre produced China‘s first full-length TV drama series, Four Generations under One Roof (sishi tongtang); China‘s first full-length indoor TV drama series, Expectation (kewang), symbolises the shift of TV drama from elite culture to pop culture; China‘s first TV comedy, Stories from the Editorial Board (bianjibu de gushi), set a precedent for product placement; and A Native of Beijing in New York (beijingren zai niuyue) was China‘s first TV drama produced on a bank‘s mortgage loan (Zhu, Keane and Bai 2008).

CTPC adapted the four masterpieces of Chinese literature and produced A Dream of Red Mansions (hong lou meng), The Journey to the West (xi you ji), Romance of the Three Kingdoms (san guo yan yi) and Water Margin (shui hu). These four TV drama series were sold to Hong Kong, Taiwan, Japan, Korea, Thailand, Malaysia and Singapore (Keane 2008). Furthermore, CTPC started a surge of building shooting bases in China. During the preparation for shooting of A Dream in Red Mansions, CTPC built the Grand View Garden (da guan yuan) for the use of shooting scenes. This has now developed into a tourist attraction in Beijing. CTPC also built several large-scale shooting bases in Zhuozhou City, Hebei Province, Nanhai City, Guangdong Province, and Wuxi City and Jiangsu Province.

During the nation-building stage, the ‗four-tier system‘ (siji ban) policy established provincial TV stations and city TV stations as strong players, generating some innovation. For instance, Shanghai TV station enhanced its appeal to audiences in the southeast coastal region by exchanging programs with other TV stations. However, according to policies at that time, all TV stations were obliged to provide TV programs to CCTV and to relay CCTV programs. Also, since CCTV was the only TV station covering the whole country, local TV stations were willing to associate with CCTV in order to promote their programs on a nationwide scale. In addition, due to uneven economic development and diversified cultural and aesthetic criteria in different regions, CCTV functioned as the balance point in the four-tier system. It represented most of the Chinese audience and couldn‘t be replaced or challenged by any local TV station (Guo, 2008, p. 208). CCTV was the biggest and most valuable broadcasting platform in China for any product. As TV stations were allowed to increase revenue by commercial advertising, the central government allowed investors and production organisations to rent air time from CCTV to broadcast their programs, but denied their requests to establish more stations or channels.

CCTV adjusted its second channel, CCTV-2, in order accommodate this new demand. CCTV contracted three TV columns on agriculture, technology and demographic education to three production centres controlled by government branches. Moreover, CCTV-2 started accepting sponsorship advertising in its daily economic news program and split the revenue with local TV stations, as long as they agreed to relay CCTV-2. In this way, CCTV enhanced its bond with local TV stations and accelerated its commercialisation at the same time.

During this nation-building stage, TV industry‘s accumulation in Beijing benefited from two factors. The first one was the CCTV factor. The hegemony of CCTV in the national market was unchallenged. The government‘s support for CCTV strengthened its production capacity regarding personnel, equipment, technology and network, which, in turn, enhanced Beijing‘s advantage in media resources and built up its reputation as the national TV centre.

Another important factor is Beijing‘s status as the national cultural and artistic centre. The content of TV programs has long been dominated by elite culture. For example, the most popular topics of TV drama are history and literature. The cultural talent base in Beijing – professors, writers and dramatists – were a significant advantage for Beijing‘s TV production. In order to preserve its elite culture and to resist ‗spiritual pollution‘ the Chinese government stressed television‘s propaganda function. Since there was no profound change in the media system in this stage, the development of the TV industry in Beijing, or even in the whole of China, is hard to correlate with Curtin‘s accumulation based on marketisation and industrialisation (Curtin, 2007). In China there was competition in neither the TV market nor free TV market forces that could mobilize trans-regionally. However, the development of the TV industry in Beijing at this stage laid a solid basis for the accumulation of TV industries in Beijing.

 Film in Beijing (1978-1991) Shanghai, not Beijing, is the birthplace of the Chinese film industry. China‘s first feature film was shot there in the 1920s. At that time, Shanghai was the most important settlement for Western colonial powers and enjoyed a creative environment. Famous writers and artists, including directors, actors and actresses, as well as educated middle-class people, came to Shanghai. Furthermore, as the earliest foreign trading port in mainland China, Shanghai had convenient access to film technology, equipment and creative concepts from outside China. Later, due to war, many film-makers moved to Hong Kong and contributed to its film industry.

From 1949, the film practitioners who stayed in China were faced with a new system, a different environment and new aesthetic standards promoted by the political regime. As the political centre shifted north to Beijing, Shanghai lost its standing as China‘s film centre. Film production was evenly scattered in several areas and a structure of ‗four big studios and three small studios‘ (sida sanxiao) was formed. The four big film studios were August First Film Studio (bayi dianying zhipian chang) of the People‘s Liberation Army in Beijing, the Changchun Film Studio in Jilin Province, the Shanghai Film Studio and the Beijing Film Studio; the three small film studios were Pearl River Film Studio in Guangdong Province, Xi‘an Film Studio in Shaanxi Province and Emei Film Studio in Sichuan Province.

After the Cultural Revolution, the film market revived and, consequently, China‘s film industry saw an upsurge of production. However, audiences were soon diverted to television, as well as other burgeoning entertainment activities, and the film industry began to deteriorate. Facing this predicament, the Chinese

government deepened commercialisation reforms in an effort to reverse the declining trend. Film studios were categorised as enterprises in 1984 and were made responsible for profits and losses.

Several areas were allowed to adopt floating fares in 19854. Beijing was one such area. Since then, a viable environment has developed. The Beijing municipal government subsequently adopted two measures to develop the film market. The first was to stimulate initiatives in distribution and screening. Cinemas in Beijing were able to take bigger profit share as long as they fulfilled the target quota of screening. Motivated by this flexible profit-splitting system, cinemas in Beijing began to renovate and reequip to attract more audiences. Some cinemas even took on innovative promotion methods, such as exclusive premiers ahead of the release date, showing movies late at night, and giving prizes for watching (Rong Tang & Shao, 2005, p. 216). Even now, Beijing remains China‘s biggest regional film market. The second measure was that distribution companies at district and county levels in Beijing were permitted to choose films, purchase film copies and make their own management decisions.

Although there was no systematic change within the film system during the nation-building stage, Beijing steadily grew into an important hub for film co-production with Hong Kong, mainly due to the political and cultural background. The Chinese government was seeking ways to increase the communication between the mainland and Hong Kong. Left-wing film practitioners in Hong Kong needed support to compete with the more dominant ‗right-wing‘ film production forces. The China Co-production Film Corporation

4 Film ticket price was set by the central government in China before 1985. But since then these areas have been able to adjust the ticket price, to a certain extent, according to local consumption levels. 55

(CCFC) was founded in Beijing in 1979, and by 1991 had co-produced 185 films. In 1982, four left-wing film companies in Hong Kong merged into Sil-Metropole Organization (yindu jigou) and accepted investment from Beijing. Burning of the Imperial Palace (huoshao yuanmingyuan), co-produced in 1983 by CCFC and the New Kwun Lun Film Production Company Ltd. (xin kunlun) was widely hailed both in mainland China and Hong Kong.

Another important factor facilitating the film industry‘s growth in Beijing during the nation-building stage was the cultural and educational advantages of Beijing. According to Tom Wang, CEO of Beidong Media, while the Cultural Revolution from 1966 to 1976 destroyed cultural and artistic institutions across the country, cultural resources were comparatively better preserved in Beijing (Interview with Tom Wang, 2009). During the nation-building stage, Beijing was the centre of new ideas. Exposed to new culture, art forms and concepts, the fifth generation of directors graduated from the Beijing Film Academy. The success they earned internationally served to establish Beijing prestige within China‘s film industry.

3.1.2 Cultural security (1992-2002)

The second phase, the period of cultural security, spans from 1992 to 2002. The important point to note here is that this period witnessed the release of many media units and organisations from state funding. The objective was to make these units more competitive and more profitable. However, the liberalisation of domestic media coincided with the inevitable threat posed by global media. Because of this, the term ‗national cultural security‘ was evoked by the end of the 1990s.

Driven by the profits from commercial advertising, the Chinese media sector was proactively involved in market operations, especially after Deng Xiaoping made his Southern Tour Speeches about the socialist commodity economy in 1992. The Chinese advertising market increased by 93.42% in 1992 and 97.57% in 1993, the largest annual increase in history (X. Wang, 2003). Balancing the dual functions of propaganda and industry meant that economic interests of media units were released from direct political supervision; the industrial function of media was further consolidated in several documents. In 1992, radio, film and TV were officially categorised as a tertiary industry in a document called ‗The decision on accelerating the development of the tertiary industry‘ (SCoC, 1992).

This was the first time that both the film and television sectors were recognised as industries in an official document. In 1998, the Chinese central government announced, during the first meeting of the Ninth National People‘s Congress, that financial support to most media institutions would be reduced by one third. Media entities were consequently forced to become independent of government financing within three years. Driven by the growing advertising market, the total income of media industries in 2003 rose to 51.4 billion RMB; advertising revenue was 28 billion RMB and government funding was only 7.6 billion RMB (SARFT, 2004).

Realising the commercial potential of media markets, media entities such as TV stations requested more reform. However, most institutional innovation was officially recognised by the government only after it had succeeded in practice or, as media professor at Fudan University, Li Liangrong argues, ‗bottom-up‘ reform was carried out during that time (Li, 2004). These types of innovations started on a regional level where local governments had a strong desire to advance economic development, and were very much lured by the media

industry‘s economic power. For instance, Guangzhou TV Station in southern Guangdong province initiated a plan to outsource program production: the station invested in only a few TV programs and dramas, and most production activity was subcontracted to individuals.

Economic interest was not the Chinese government‘s only concern at that time. Seeing foreign media companies lured by the opening up policy, the central government started to worry about ‗cultural security‘. Therefore, even though there were few systematic changes in reform, the central government began to redeploy media resources across the nation; provincial governments were encouraged to build up media conglomerates in order to prepare for the coming WTO accession. These media conglomerates are regarded as institutional groups managed in an enterprise way. In other words, these are government-managed ‗national champions‘ capable of competing with the likes of News Corporation and Time Warner. During this period, China‘s biggest film company, the China Film Group Corporation, was established in Beijing in 1999. As all of these reorganisations were undertaken under government order, and private capital was still prohibited from investing in the media sector, government remained the important decision-maker for the development of the media industry, and for decisions pertaining to content innovation.

 TV industry in Beijing (1992-2002) Entering into the cultural security stage, TV advertising became the most important income stream for TV stations. CCTV‘s advantage in advertising was strong despite the fact that more provincial TV stations were allowed to broadcast nationally via satellite.

Along with the deepening commercialisation of media industries, CCTV set up its business development office in 1992 and carried out producer contracting systems in 1993. CCTV‘s daily news editorial program, Oriental Horizon (dongfang shikong), was the first TV program to contract out to producers. The producer contracting system endowed producers of Oriental Horizon more freedom regarding program planning, personnel recruitment, fundraising, expenditure, filming and marketing, all of which used to be managed and coordinated by CCTV. Producers of Oriental Horizon borrowed RMB 200,000 from CCTV as start-up capital for program production; CCTV also allocated five minutes of advertising time for each broadcast. One month after its premier, the 5-minute advertising time had become hot and the producers recouped enough income to pay the RMB 200,000 back to CCTV. The advertising rate for the program grew tenfold, from RMB 2,500 per second to RMB 30,000, over ten years. CCTV also adjusted its personnel system in order to match the producer contracting system. Staff in the Oriental Horizon production team (most of them were not CCTV‘s permanent personnel) were allowed to enjoy the same welfare and salary as the full-time CCTV staff, or even better. In 1994, CCTV signed the formal employment contract with all the practitioners hired by its several TV columns, which created a new employment system in China‘s media industries.

Starting with the producer contracting system, outsourcing from CCTV and BTV (Beijing TV) gave birth to private TV production companies. However, no private film and TV production companies were allowed by the government until 1997; private TV production companies ran their business under cover of advertising companies prior to that time. They traded for advertising time by producing programs for TV stations, and gained profit by selling advertising time. Feng Gang, an ex-journalist and director at CCTV, left and founded Jiashi Advertising Cultural Development Company in Beijing in November 1994,

which is regarded as China‘s first private TV production company. Later on, more staff from CCTV, BTV and other state-owned media organisations left their jobs in the state-owned system and established their own production companies in Beijing, inspired by the business opportunity, especially after private media production companies were finally acknowledged by the government in 1997.

Beijing rapidly became the most concentrated area of private TV production companies, especially the influential private production companies. For example, Cheerland Entertainment Organization (qixinran chuanbo jigou), which produced several successful TV programs for CCTV, such as Lucky 52 (xingyun 52), was established in 1997 by Yuan Mei, an ex-director at CCTV; Enlight Media (guangxian chuanmei), which produced the Chinese Entertainment Report (Zhongguo yule baodao) and sold this to BTV and many other provincial TV stations, was founded in 1998 by Wang Changtian, an ex-producer at BTV; the Yinhan Communication Company, which contracted BTV‘s lifestyle channel, was established in 1999 by Xia Jun and Wang Jianping, two ex-producers from CCTV. The reason for the intensive emergence of private TV companies in Beijing is that during this period CCTV was the biggest advertising broadcasting platform covering the whole country. Private TV companies targeted CCTV as the most valuable partner, due to their profit model of trading for advertising time by outsourcing production for TV stations. Advertising time on CCTV, the only national TV station, could be sold for a better price. The other reason is that the high density of TV stations in Beijing generated the biggest demand for TV programs. In addition to CCTV, BTV and CETV (China Educational Television) were also located in Beijing. Furthermore, most local television stations have offices in Beijing because they need to keep in close contact with Ministry of Radio, Film and Television (the predecessor of

SARFT). As a result there were more business opportunities in Beijing for private production companies.

TV drama production used to be understood as a propaganda tool conducted by state-owned institutions under the instruction of the state ideology (Guo, 2008, p. 268). However, the TV drama Expectation (kewang) made by Beijing TV Art Centre was screened on CCTV in 1990 and introduced popular culture (tongsu wenhua) in China‘s TV dramas. The emergence of popular culture engendered TV drama‘s potential for commercialisation. Since then, more TV drama transactions have been conducted in Beijing. Beginning with Stories from the Editorial Board (bianjibu de gushi), produced by the Beijing TV Art Centre, TV drama production organisations started to make a profit through product placement and attached advertisement (Zhu, Keane and Bai 2008). TV dramas were sold to TV stations at very low prices, or were even provided for free at that time.

The central government‘s response to the rising popular culture also sent a positive message. In 1991, the Standing Committee Member of the CCCCP Political Bureau, Li Ruihuan, praised the success of Expectation and noted that a TV drama is meant to please the audience first, and then to educate (Zhao, 1994). The Ministry of Radio, Film and Television (the predecessor of SARFT) required CCTV to adhere to the principle of ‗giving priority and better price to TV dramas with high quality‘ (youzhi youjia youbo). Later on, encouraged by the central government‘s enthusiasm, TV drama production organisations started making bigger investments in production, which greatly stimulated the TV drama market. Beijing Cultural and Artistic Audio-Visual Press spent 2 million RMB on producing No Question, I Love You (ai ni mei shangliang) and Beijing TV Art Centre borrowed 1.5 million USD from the Bank of China to shoot A Native of Beijing in New York (Beijingren zai niuyue). The bigger investment

forced these production organisations to make full use of the commercial operation to cover costs and make profit. Then No Question, I Love You (ai ni mei shangliang) was sold to CCTV for RMB3.5 million and the Beijing TV Art Centre was able to cover costs by trading A Native of Beijing in New York (beijingren zai niuyue) with CCTV‘s prime time advertising (Keane 2002; Zeng 2008).

Although provincial TV stations began to expand their coverage to the whole nation via satellite, none have been able to challenge CCTV‘s dominance in the national market, due to its size and first mover advantage. Private TV production companies gained most profit by producing advertisements. CCTV was a more ideal choice. Furthermore, Beijing, as the most economically advanced city in China, along with Shanghai, has many client resources for advertising. In addition, as illustrated above, most founders of private TV production companies used to work in CCTV or BTV. Hence it was easier for them to start their business in Beijing by maintaining a connection with CCTV or BTV and to secure enough outsourcing tasks.

Unlike TV stations and production organisations in places outside of Beijing, CCTV, BTV and other state-owned TV production organisations in Beijing tended to wait for the central government‘s approval before conducting systemic reform. However, despite this conservatism, they were able to achieve results once they began to commercialise by exploiting the advantages that they had accumulated, namely: talent, equipment, technology and funding. CCTV, as the TV regimen directly under the central government, was well protected by national media policies and was assisted in competition with other TV stations. Therefore, the state-owned TV force also grew stronger in Beijing.

 Film industry in Beijing (1992-2002) China‘s film industry dropped to its lowest ebb by 1992. SARFT subsequently commissioned the China Film Group to establish a film trading market in Beijing in April 1993 and to hold two to three film trade fairs in order to activate the film market. The China Film Group was also allowed to import ten foreign movies annually in 1994. Since then, Beijing has established its film trading centre with the assistance of government policies. The Chinese government made a decision to intensify reform and liberalise controls over the film industry. SARFT organised a meeting in Beijing and lobbied enterprises that used to be involved in the film industry to increase their investment on film industry. State-owned film studios were encouraged to be more involved in the commercialised market competition.

The Beijing Film Studio stands out. Since 1992, it started raising private capital for film production and splitting revenue with investors. It absorbed nearly RMB 200 million and produced 30 films in 1995, which set a new record for China‘s film industry. It set up its own audiovisual publishing company, theme parks based on its shooting base and animation production companies. More importantly, it attached great importance to co-productions with Hong Kong. It won more co-production opportunities than other film studios by offering better conditions and, therefore, gained better economic effects. Beijing Film Studio‘s openness to co-producing films with Hong Kong, especially popular films (yule pian), helped it to reap fat financial returns, which accelerated its later development. Through co-production with Hong Kong film companies it was also able to enhance collaboration capacities and to build a stable relation with Hong Kong regarding channel, resources and personnel. This in turn created new opportunities for media collaboration between mainland China and Hong Kong.

Table 2 Chinese film studios’ co-production with Hong Kong in the first half year of 1993 ("Film Information Express," 1993) No. Film Studio Total yield Amount of co-produced films

1 Beijing Film Studio 18 13

2 Changchun Film Studio 15 1

3 Shanghai Film Studio 8 4

4 Emei Film Studio 8 2

5 Xi‘an Film Studio 7 4

6 Xiaoxiang Film Studio 7 1

Reflecting on the development opportunities in this stage, it is clear that the Beijing municipal government saw proactive ways to participate in the film industry; it enacted promotion policies and strategies to accelerate film industry development. In 1996, the Beijing Municipal Film Company, the China Film Company, and 12 cinemas in Beijing jointly established the Beijing New Film Association Company Ltd. (xinyinglian yingye), which soon became a significant player in China‘s film market.

Beijing TV, the Beijing TV Art Centre, the Beijing Municipal Film Company and the Beijing Cultural and Artistic Audio-Visual Press then co-founded a joint-stock film company, Beijing Forbidden City Film Company (beijing zijincheng yingye), which co-established the Beijing Forbidden City Sanlian Distribution Company Limited with Beijing New Film Association Company Ltd. This entity covered the complete industrial chain from production to distribution. The Beijing Forbidden City Film Company has been a pioneer in China‘s film industry since its establishment. It produced China‘s first New Year movie (hesui pian) The Dream Factory (jiafang yifang), directed by Feng Xiaogang, who is a famous film director in mainland China, and conducted a commercial promotional campaign.

The Beijing Forbidden City Film Company‘s success illustrates two key factors contributing to the film industry in Beijing during this period. The first is combining entertaining attributes with the main melody of socialism (shehui zhuyi zhu xuan lv). In the cultural security stage, in order to cope with the impending competition with foreign film companies, China‘s film industry experienced a shift from the old stereotyped film format serving state ideology to a form of mass entertainment more appealing to audiences. For film companies, surviving in the market competition required playing with popular culture while keeping in line with the state ideology. As the political centre of China, Beijing provided companies with the closest possible access to the government‘s ideological requirements while also enhancing the industry‘s production quality as the cultural centre of China.

The second factor is government support, which is crucial in the immature market economy in the cultural security stage of reform. Before 2003, there were no private film companies. Competition, which would normally be regulated by the market, was in the hands of government. The Beijing municipal government proactively accelerated the film industry‘s development, as it has been passionate to maintain its prestige in film industry and retain its statue as the cultural and artistic centre of China. It was able to smoothly and efficiently coordinate the collaboration and marriage of different departments. For example, the Beijing Forbidden City Film Company was a joint-venture of TV, film and publishing. It had access to more directors, scriptwriters, actors and production team members owing to its joint-venture characteristic and the flow of personnel. The share of resources greatly improved its production capacity. Moreover, the government‘s tolerant attitude towards the film industry, due to its aspiration for Beijing as China‘s cultural centre, allowed space for business innovation and

format innovation. Accordingly, a film friendly environment was fostered. This bred a nation-leading film industry in the city.

3.1.3 Soft power (2002-present)

The third phase is best described as the era of soft power. During this period, the Chinese government accelerated reform of the cultural system in order to conform to the requirements of World Trade Organization (WTO) membership while ensuring there were measures to help domestic media industries compete with foreign media groups (Zhao, 2003). During the cultural security stage, the Chinese government realised that developing its media industries was a strategy to cope with globalisation. Entering into the third stage, the Chinese government is paying more attention to ‗soft power‘. The direction of reform has drifted between loose and tight control, as regulators balance political concerns with profit opportunities. At the 16th National Congress of CCP in 2002 the central government confirmed the existence of two categories: cultural undertakings or cultural institutions (wenhua shiye) and cultural industries (wenhua chanye). Entertainment programs, including TV drama and film, were permitted to be produced and operated by the private sector.

Media commercialisation deepened in this period. The National Work Conference of Cultural System Pilot Reform in June 2003 decided to establish 35 pilot units, 9 pilot regions and 8 pilot newspaper presses across China to experiment in cultural industry development. Domestic capital was encouraged to invest in performance, TV and film production and to participate into the shareholding reform of some state-owned culture units (SCoC, 2005). In order to support cultural trade, China‘s Ministry of Culture reached an agreement with the Export-Import Bank of China (China Exim) to provide a RMB 20 billion

(2.9 billion U.S. dollars) credit line to cultural industries. The ‗Instructional Advice on the Financial Support for Cultural Export‘ was promulgated by the Ministry of Commerce of China and other relevant departments in 2009. Based on the principle of ‗recommended by each department, examined independently by China Exim‘, the ‗Instructional Advice‘ focused on supporting cultural enterprises and projects to ‗go out‘.

In order to maintain control over the core functions of the media, the government announced what it called ‗four unchangeables‘ (sige bubian), namely: the media remains the mouthpiece of the CCP; the media remains under the direction of the CCP; media leaders remain responsible to the CCP; and the media must maintain ‗correct public opinion‘. The most sensitive issue, however, is foreign investment, which is a good example of government vacillating. In 2004, foreign capital was allowed to co-found radio, film and TV program production companies that would produce ‗non-journalism‘ programs, but, in 2007, this policy was abolished and foreign capital was limited to co-production and was completely forbidden from investing in any TV or film company (c.f. NDRC, 2004, 2007). During this period, it is clear that the government formed an intention to value economic development and support domestic media companies, both state-owned and private, by diversifying ownership, liberalising investment and readjusting structures. At the same time, it persisted in the control of ideology and it monitored the activities of foreign media companies by reinforcing censorship and restrictions on license granting.

3.1.4 The implication of media reform

China‘s media reform is a consequence of two forces, one international and the other domestic in nature. Firstly, WTO accession has pushed the government to

deepen reforms; secondly, the transition from institution to industry has accelerated commercialisation.

 WTO accession In December 2001, China finally joined the WTO after thirteen years of negotiations. The audiovisual services were quarantined from the General Agreement of Trade in Services (the predecessor of General Agreement on Tariffs and Trade) component of the WTO agreement, except for minor concessions in content distribution and cinema theatre construction. This result demonstrated that media production remained highly sensitive, both politically and culturally, and that China was trying to buy time for domestic media industries to grow strong enough to compete with foreign media groups (Keane, 2007a).

According to Zhao Yuezhi (2008, p. 138), nationalism in the media industry has risen throughout mainstream Chinese press and academic literature. This characterises the impact of WTO accession as the old Chinese fable of ‗wolves are coming‘. Prior to 2001, Time Warner, Disney and News Corporation were compared to wolves coming to eat the sheep, referring to Chinese domestic media organisations. The Chinese government deferred opening up of the media sector. In the Report on Development of China‘s Cultural Industry 2003, Jiang Lansheng and Xie Shengwu argued that the way to deal with this situation was to find out how to connect Chinese media and cultural industries to the global track; how to effectively absorb foreign capital and expertise; and, most importantly, how to strengthen the domestic industries‘ global market position (L. Jiang & Xie, 2003; c.f. Zhao, 2008, pp. 138-139). A sense of cultural crisis was evident in the late 1990s, but by 2000 a new discourse ‗safeguarding national cultural security‘ had emerged (Zhao, 2008, p. 177).

China‘s entry into the WTO brought changes. According to the principle of reciprocity, while taking on more obligations and responsibilities, China has received more rights and benefits, which are of use to ensure China‘s interests are served in international competition (Liu, 2002). The media market is expanding as consumer demands are growing. WTO Accession has forced the hand of government, reforming attitudes and ways of thinking about media industries. With the opening of media markets, media organisations are exposed to more intense competition, some of whom are strengthened by participating in competition (G. Wang, 2005).

Although it remains to be seen whether these optimistic predictions ultimately occur, the media market in China has indeed changed a lot. Taking the film industry as an example, the government has been determined to keep film distribution out of Hollywood‘s control by putting a strict ban on any foreign involvement in film distribution, regarding it as critical to autonomy, while allowing the domestic sector to become a stronger competitor (Brent, 2000; Miller, 2005). Yet, under the General Agreement on Tariffs and Trade (GATT) of WTO, China promised to import 40 films per year, with the number increasing to 50 by 2005, 20 of which would be first-run Hollywood blockbuster movies. Tariffs on audiovisual imports were reduced, the domestic market was opened to foreign distributors, and foreign investors were allowed to own up to a 49% share in companies that build, own, and operate cinemas in China (Zhao, 2008, p. 163). However, in spite of promises to liberalise the quota system of imported films remains intact; censorship remains tightly in government hands; and domestic distribution remains strictly controlled by the two state-owned film distribution companies, China Film and Huaxia Film.

 from institution (shiye) to industry (qiye)

As mentioned previously, media reform occurs in a circular way; it begins as bottom-up, often starting from the periphery. Most reform occurs in places other than Beijing. Media organisations in Guangdong Province, Hunan Province, Jiangsu Province and Shanghai have been active in media reform and have experimented with various measures. Once their ‗experiments‘ obtain preliminary results, the reforms are imitated by other organisations and, in many cases, they are eventually recognised by the central government. This shows that the motivation for reform and innovation in China‘s media industries is much stronger in places outside of Beijing.

The initiation of each wave of media reform does not happen without gaining the explicit, or implicit, support of the local government. The local government offers support as long as the economic benefit brought by the reform is tangible. The manner of supporting media reform varies; it can be procedure facilitation, administrative assistance or silent consent. The eventual success of the reform relies on the central government in Beijing. Furthermore, the central government will exhaust its political power to spread the reform at all levels once it accepts it. The full path of media reform in China (as shown in Figure 1) is bottom-up at first and then top-down, which means reform starts from the periphery, outside of Beijing, but its fate is decided by the core decision-makers in Beijing.

Figure 1 The full path of media reform in China (compiled by the author)

Phase 1 Phase 2

The Central Macro The Central government government

Changing the Pushing the reform central throughout China government’s by all mind by the administrative success means

Local government Local government Meso

Persuading the Implementing the local government reform and by the potential benefit media benefits organisations

Media Media Micro organisations organisations

The transformation from media institution (shiye) to media enterprise (qiye) indicated the circular path. This transformation provides a clue to understanding the government‘s attitude towards media and China‘s media industries‘ driving forces and restrictive factors. According to Zhang Xiaoming, institutions (shiye danwei) are part of the public service system, comparable to public service organisations in other countries. The reform in China‘s cultural sector is a process of ‗industrialising‘ these institutions, or turning them into companies (qiye) (X. Zhang, 2006). Donald and Keane (2002) have proposed a table to

demonstrate this transformation. Drawing on their work, Table 3 shows the difference between media institution (shiye) and media company (qiye).

Table 3 Comparison of shiye and qiye (adopted from Donald & Keane, 2002) Shiye Qiye

Economic Command economy / State capitalism/authoritarian system Planned economy liberalism; Gradual decentralisation of management

Media Engineer state model Architect state model (state regulation facilitates regulatory guidelines for investment in infrastructure)

Function of Propaganda/mobilisation Informational; media of masses viewer-friendly Media Mass line; cultural Shift to entertainment function; characteristic despotism entrepreneurial self-sufficiency; internationalisation of content

Zhang Xiaoming maintains that the reform of China‘s cultural system has resulted in a highly stratified operational system. Media enterprises coexist with public media institutions (shiye). Neither the state nor the market is external to each other (J. Wang, 1998).

Institutional bodies, including state ministries and governments at all levels, play an important role in the management of China‘s media industries (Redl & Simons, 2002). Eric Kit-wai Ma has observed that in China media ‗commercialization involves highly manipulative relations between political powers, economic interests, and pay journalism‘ and ‗the articulation of power, money, and media is much more obvious and direct‘ (Ma, 2000). In China, media is an important tool for enhancing the state‘s soft power (Hu & Zhang, 2004; Sun, 2010a), and, hence, the development of media industries means far

more than marketisation. For China, it is concerned with the destination of Chinese culture (Xie, 2002); it is seen as the way for a nation to communicate with the world (Zhu, 2004).

Ideology remains a significant consideration not only for media firms to produce media products, but also for government to decide whether a TV program or film can be broadcast. The ‗four unchangeables‘ discourse discussed in the previous section of this chapter demonstrates that capital investment is restricted and is under strict surveillance by the government. The state can punish a rebellious individual or media organisation by direct order once the authority is infringed (Ma, 2000, p. 26). In doing so, the Chinese government can successfully cripple the independent power of media industries and tame them, at least temporarily.

3.2 Media regulatory environment in China

The media regulation system in China includes content censorship, media ownership, financing and distribution regulation, market access (licensing), and import and export regulations. The regulatory authorities relevant to media industries are: the Publicity Department of the CCP Central Committee5, SARFT, MoC, and GAPP. The Ministry of Commerce and the State Administration of Taxation are sometimes involved in media industry regulation with regard to financial support, import and export, and tax reduction.

5 It was translated into The Propaganda Department of the CCP Central Committee. But the official translation was changed to The Publicity Department in late 1990s. 73

The Publicity Department of the CCP Central Committee, which directly reports to Li Changchun, the propaganda chief of CCP, is an internal division of the CCP in charge of ideology-related work. It has the highest leadership role in the media regulation system. Although it seems to be a Party organ, it has no executive power. It determines the development of media industries by taking direction from the Standing Committee of the Political Bureau of the Central Committee of the CCP. It also controls media outlets and content by conveying CCP‘s highest instructions to the media on what is and what is not to be said. The chief editors of China‘s major media outlets must attend the department‘s central office on a weekly basis to receive instructions on which stories should be emphasised, downplayed or not reported at all.

SARFT is the executive branch under the State Council in charge of administration and supervision of state-owned enterprises engaged in the television, radio and film industries. It directly controls state-owned enterprises at the national level. It is responsible for censoring materials that might be objectionable to the Chinese government or to its assessment of cultural standards. It is the major administrative authority for China‘s media industries as it has the widest administrative scope covering production and distribution, content and organisation, platforms and programs, and institutions to companies. It has local branches at the provincial and city levels, which are responsible to the local TV and film companies and institutions.

The Ministry of Culture (MoC) is responsible for cultural policy and activities in China, including managing national museums and monuments; promoting and protecting the arts (visual, folk, theatrical, musical, dance, architectural, literary, televisual and cinematographic) domestically and abroad; supervising content broadcast on the internet; and managing national archives and regional culture centres. MoC is in charge of approving and facilitating national cultural projects.

As the main governmental division responsible for cultural system reform the MoC works together with SARFT on aspects of media reform.

The General Administration of Press and Publication (GAPP) is the administrative agency responsible for regulating and distributing news, print and internet publications in China. It regulates copyrighted products, although it does not assume direct responsibility for media industries.

Some major national media industries policies are listed in Table 4 below. It is clear that the Chinese government has endeavoured to promote the reform, to develop media industries and to facilitate media export. However, in terms of foreign capital, the government shows different attitudes towards the film and TV sectors. Foreign capital is completely excluded from reality shows and other types of light entertainment shows, but can be used to co-produce TV dramas. In addition to co-producing films, foreign capital is allowed to co-fund film companies and cinemas. This fits into Tom Wang‘s observation: ‗The Publicity Department of CCP Central Committee‘s control over films is quite loose. That‘s why we can see many experimental films in China. However the control on TV drama is much stricter. Therefore SARFT has different standards for TV and film. TV is more of the party‘s organ whereas film is more like a type of art.‘ (Interview with Tom Wang, 2009)

Table 4 Major national media policies in China No. Name Year Major content Some opinions on Promote cultural industries; 1 deepening cultural system 2006 Deepen the commercialisation reform reform on state-owned media institutions; Cultural industries Encourage export; 2 2008 revitalisation plan Welcome more investment and financial support from private sector Guiding opinions on 3 2009 and state-owned financial financial support for

cultural industries organisations. revitalisation and development Opinions on the reform of 4 separating production from 2009 broadcasting Some measurements on 5 deepening film 2009 development ad reform Guiding opinions on 6 promoting film industry 2010 development Provisions on film 7 1997 censorship Administrative provisions 8 on Radio and TV programs 2004 production and operation Censorship and licensing Temporary provisions on 9 business qualification of 2004 film companies Administrative provisions 10 2010 on TV drama content Temporary provisions on Sole proprietorship is not allowed for 11 foreign investment on 2003 foreign capital in any sector in media cinemas industries; Foreign capital can‘t exceed 49% in Administrative provisions joint-venture film companies and 12 on Chinese-foreign 2004 cinemas, with the exception of capital co-producing films from Hong Kong, Macau and Administrative provisions Taiwan ; 13 on Chinese-foreign 2007 Foreign capital is completely co-producing TV drama prohibited in TV columns production companies; Script-writers, producers, directors Catalogue for guidance of 14 2007 and chief actors of any co-produced foreign investment film or TV must be staffed with over 1/3 Chinese staff. Catalogue for guidance of 15 2009 Facilitate media products export. cultural products and

service export

3.3 The geography of media industries

Media industries are heavily concentrated in Beijing, Shanghai and provinces in the southeast coastal regions in China (Tan & Wang, 2009). These areas are referred to as the ‗media high ground‘ (chuanmei gaodi) by Chinese scholars (ibid, p. 446). In order to evaluate the status quo of the development of media industries in different areas of China and to estimate development potential, Yu Guoming of Renmin University came up with a media index to measure development from the perspective of production, profit, consumption, advertising and environment. Beijing, Shanghai, Guangdong Province, Jiangsu Province and Zhejiang Province are the top five areas (Yu, 2010).

3.3.1 Beijing

Beijing has the highest number of media companies, especially large companies. It has double the number of large film and TV companies than Shanghai (Liu, 2009). In the TV sector, most provincial TV stations set up offices and production bases in Beijing, often near CCTV and BTV. In 2010 there were 129 registered TV drama production companies and organisations in China of which 41 were in Beijing, and 1076 TV program production organisations were in Beijing, accounting for 23% of the total amount across the country (SARFT, 2010b).

Most of the large TV production companies are in Beijing. CCTV is the biggest state-owned organisation in TV drama production. CITVC and Beijing Zhongbei TV Art Centre Co., Ltd. are very important state-owned TV

production organisations. In 2010, SARFT approved 122 shooting plans submitted by TV drama production organisations and companies in Beijing, accounting for 25% of TV drama production nationwide. In the film industry, nearly all the large private film companies are in Beijing, such as Huayi Brothers, Poly Bona, Stella Media Group (xingmei chuanmei), Beijing New Picture Film Co. (xinhuamian yingye), Orange Sky Entertainment Group (chengtian yule) and Enlight Pictures (guangxian yingye), in addition to two state-owned film companies, China Film Group and Beijing Forbidden City Film Co.

Table 5 Major private TV drama production companies in Beijing Establishing No. Name Time

1 Hairun Movie & TV Group (hairun yingshi) 1993

2 Pegasus Movie & TV Group (jinyingma yingshi) 1993

3 Yingshi Film & Drama Production Co. 1994

4 Huayi Brothers Media Group 1994

5 Rosat Film & TV Art Co. Ltd. (rongxinda) 1995

Beijing Beida Huayi Film & Drama Co.Ltd (Latterly 6 1996 merged into Media China Corporation Limited)

7 Beijing Xinbaoyuan Movie & TV Investment Ltd Co. 1998

Beijing Galloping Horse Film & TV Production (xiaoma 8 1998 benteng)

9 Ciwen Pictures 1999

10 Beijing Hualu Baina Film & TV Co. Ltd. 2002

Beijing is China‘s primary hub for media transaction and export. The China Film Group and the Huaxia Film Distribution Co. Ltd., the only two film

companies certified by the government to import and distribute foreign films, are in Beijing. The China Radio, Film & Television International Exposition, focusing on the exhibition of international film and television programs, exhibition of technical instruments, high-level forum and the awards ceremony for national radio, film and television has been jointly hosted by SARFT and the China Media Group in Beijing every year since 2003. It is the largest film and TV trading and exhibition event in Asia. In 2010, the exhibition area was 22000 square-meters. It attracted 1,300 exhibitors with 6,758 different programs, and the trade sum reached 2,429 million RMB6.

Starting in 2011, Beijing launched another annual international media showcase event, the Beijing International Film Festival, which is sponsored by SARFT and the Beijing Municipal Government. It aims to provide a platform for exchange and transactions for domestic and overseas films. In 2011 this event attracted 334 film institutions and 860 film industry professionals from around the world, including Twentieth Century Fox, the German Film Institute, the Tokyo International Film Festival, CJ Entertainment, etc. The total transaction value reached 2.794 billion RMB and set the highest record in domestic film festivals and exhibitions. According to the Catalogue of cultural export enterprises of excellence in China (2009-2010) (MoC, 2009) and the Catalogue of cultural export projects of excellence in China (2009-2010) (MoC, 2010), Beijing has an obvious advantage in cultural export. In these two government documents, there are 59 key radio, film and TV export companies in China and 18 are in Beijing. Moreover, 43 of the 91 key radio, film and TV export national projects are in Beijing.

6 It was retrieved by author from the news on the China Radio, Film and Television

Programs Net. More information can be found at http://www.chnpec.com/2010/0829/489.html. 79

3.3.2 Shanghai

As mentioned earlier, Shanghai is the birthplace of the Chinese film industry. By the 1980s Shanghai had lost its early edge in media industries, particularly in the TV and film sector. As Tom Wang, CEO of Beidong Media, commented, there is little chance for Shanghai to get back its old glory (Interview with Tom Wang, 2009). According to SARFT, there were only 12 TV program production companies and 378 TV program production companies in Shanghai in 2010 (SARFT, 2010b). In terms of large companies, Shanghai has the Shanghai Media Group (SMG), the Shanghai Film Group and Chinese Entertainment Shanghai (shanghai tangren dianying). Compared with Beijing, Shanghai has fewer film and TV businesses. However, Shanghai illustrates significant momentum in market reform, as the Chinese cultural critic Mao Shian maintains (quoted by Cao, 2010). The White Countess (bojue furen), jointly produced by Merchant Ivory Productions, Sony Pictures Classics and the Shanghai Film Group in 2005, was the first film in which a Chinese company was able to share box office takings with foreign companies. The Shanghai Film Group was China‘s first film enterprise to co-produce a blockbuster film with the world‘s top film company, Universal Pictures. They co-produced The Mummy: Tomb of the Dragon Emperor in 2008. Furthermore, Shanghai was also the first place in China to initiate separation of production from broadcasting in a state-owned media group. In 2009, the reform plan of Shanghai Media Group (shanghai wenhuang xinwen chuanmei jituan) was approved by SARFT. In this plan Shanghai Media Group was renamed to Shanghai Radio and Television Station and the profitable production sector of the station was peeled off and formed into the new SMG (shanghai dongfang chuanmei jituan youxian gongsi), the core business of which is content production and investment. Finally, Shanghai

is China‘s financial centre. A mature financial environment exists there, and people in Shanghai are considered to be entrepreneurial and experienced in capital operation.

3.3.3 Guangdong Province

Guangdong Province has been active in TV drama production since the 1980s. In 2010, ten TV drama production companies and 751 TV program production companies were located in Guangdong Province, just next to Beijing (SARFT, 2010b). Guangdong‘s success owes much to its proximity to Hong Kong. Guangdong Province has produced several series of TV dramas that swept across China in the 1990s. Guangdong TV produced China‘s first reality TV show The Great Survival Challenge (shengcun datiaozhan) in 2000, inspired by a reality show produced by Hong Kong TVB (Keane et al 2007). While more and more Hong Kong actors and actresses are shifting their emphasis to mainland China due to the flagging local market. The significance of Guangdong Province is growing gradually as the convenience of transportation between Guangdong Province and Hong Kong reduces commuting cost, and, as the two centres speak Cantonese, there is less of a language difficulty than in other places.

3.3.4 Hunan Province

The most successful provincial satellite TV channel in China is Hunan Satellite TV (HSTV), which is owned by Hunan Media Group (hunan guangbo yingshi jituan). In addition to HSTV, Hunan Media Group has another nine television channels including Hunan Economic Channel (Hunan Jingshi) and, together with Qiong Yao (a famous Taiwanese writer), produces many successful 81

romantic TV dramas, such as Princess Pearl (huanzhu gege). According to the Report on Development of China’s Media Industry (2010), Hunan Satellite TV ranks first in audience, profit, growth potential and branding among all provincial TV channels in China (Cui, 2010, p. 241). The entertainment-focused style of Hunan Satellite TV provides its unique brand. Hunan Satellite TV received 4.58 billion RMB from advertising in 2008 and this makes it the biggest advertising attractor among all the other provincial TV stations. Hunan Satellite TV has produced several successful entertainment shows, such as Happy Camp (kuaile dabenying) and Super Girls (chaoji nvsheng). However, most of Hunan Media group‘s TV programs and dramas are produced by itself or are commissioned from companies it owns; the local market is basically occupied by the Hunan Media Group and the space for other media companies is quite limited. According to SARFT, Hunan province has the fewest TV production companies of any major media region in China – only 4 TV drama companies and 81 TV program companies. Only 12 shooting plans of TV drama were approved by SARFT in 2010, also the lowest yield among Beijing, Shanghai, Guangdong and Zhejiang.

3.3.5 Zhejiang Province and Jiangsu Province

Zhejiang and Jiangsu Provinces are the two fastest developing media regions. Thanks to the Hengdian World Studios, the world‘s largest film and television shooting base by area, media business has grown rapidly in Zhejiang Province. Zhejiang has a huge pool of available private capital due to its manufacturing industry. 51 TV dramas of 1,778 episodes were produced in Zhejiang Province in 2012 and Zhejiang Province is now the second largest TV drama production centre in China (www.sina.com.cn, 2012). The Zhejiang provincial government shows great support to the media industries. Tempted by the local tax

preferential policies, many media companies have set up new offices in Zhejiang in order to reduce costs. Similarly, Jiangsu Province has had success with media industries and has attracted many businesses there due to the Wuxi Movie/TV Base in Wuxi city. It is estimated that the brand value of Jiangsu Radio and TV Corporation reached RMB 7.3 billion, only next to CCTV and Phoenix TV, and higher than all the other provincial media corporations in China (www.people.com.cn, 2010).

In sum, Beijing has obvious prominence among these media hotspots. However, that doesn‘t mean that Beijing‘s position won‘t be surpassed. Media business is greatly enhanced due to technological development, especially when government keeps loosening controls and local governments continue to make supportive policies.

3.4 Concluding remarks: the prospects of innovation

China‘s media sector is undergoing the transition from institution (shiye) to industry (qiye). Tensions between shiye and qiye result from the government‘s ambiguous, even ambivalent, attitude towards media. The creative industries fever that has appeared in China has encouraged the government to develop media industries. However, media is naturally associated with propaganda in China. As Horner, a Senior Fellow at Hudson Institute who pays special attention to how China's evolving views of its modern historical experience and its intellectual and cultural traditions influence contemporary developments, argues, the traditional Chinese way of showing a country‘s greatness prioritises cultural pride ahead of economic, political, military and diplomatic success, which are already the necessary requirements for greatness (Horner, 2009, p. 33).

The Chinese government is reluctant to allow the media market to run its course. The government endeavours to develop media industries that can transmit and popularise Chinese culture transnationally while, at the same time, making a profit. It supports media industries because of the propaganda they can create. State-owned media organisations are allowed to incorporate with private capital, and even to co-produce with foreign media companies. Private companies are widespread in every sector of media industries.

Beijing‘s national media centre status is maintained by the tension between shiye and qiye. However, its innovative capacity is compromised by the same tension. Thirty years of media reform have not led to a market that rewards originality and innovation. The main objective of many Chinese media companies is to earn quick cash through copying and imitating rather than inventing and creating. However, innovation is crucial for media companies that want to survive in the media market. Beijing may not be the best place for innovation but is a good place for establishing connections.

Chapter 4: Reframing media industries’ expansion in

China

In order to provide a comprehensive understanding of media industry development in Beijing and to evaluate Beijing‘s advantages and disadvantages as a site for media industries clustering and export, I examine the types of media enterprises (qiye) in China that have formed as a result of reforms. Following this, I interpret development trends and the regulatory environment in China. Finally, I examine China‘s media exports and international collaboration7.

4.1 Media companies

As media reform has deepened in the past decade, pushed by China‘s accession to WTO in 2001, three types of media companies have emerged: state-owned media groups, private media companies and foreign players.

4.1.1 State-owned media groups

Jing Wang has written that China‘s accession to the WTO was a major turning point in media industries:

On the track of ‗strengthening and supersizing (China‘s sectoral economy)‘ (zuoqiang zuoda) so as to combat multinational corporations infiltrating

7 All the data in this chapter is collected at SARFT‘s statistics information website, unless otherwise noted. More information can be found at : http://gdtj.chinasarft.gov.cn/index.aspx?ID=2435c168-d7dc-4947-87f9-f02943945300 85

China after China‘s entry into the WTO, the Chinese government pushed the logic of spatial restructuring beyond translocality to incorporate a ‗networked‘ notion of transboundary coordination (‗boundaries‘ here refers to both the sectoral and the geographical)‘ (Wang, 2005, p. 16)

Because of the perceived benefits scale economy, the Chinese government has looked towards ‗conglomerate formation‘ (jituanhua). Chin-Chuan Lee argues that organising state media conglomerates to stimulate ‗managed competition‘ is China‘s national response to global challenges (Lee, 2002, p. 10).

Jing Wang believes China‘s media sector is a typical example of how administrative constraints have produced powerful blockades to local media attempts at trans-boundary and trans-sectoral business mergers. She contends that a factor driving Chinese media sector‘s industrialisation and conglomeration is ‗the percolation of the networked spatial logic through every policy domain‘ (Wang, 2005, pp. 16-17). This argument explains SARFT‘s national call to build a Chinese cross-industrial and cross-regional media ‗aircraft carrier‘ and ‗combined fleet‘ (Li & Li, 2007). In the Plan of Development of Radio, Film and Television (2001-2010) released in 2000, one of the development objectives was to build up several internationally influential, competitive, trans-regional and trans-industrial media groups during the planned period. These media groups, formed under government orders, are institutional groups managed in an enterprise way (shiye jituan, qiyehua guanli). In other words, they are government-managed ‗national champions‘ designed to be capable of competing with the likes of News Corporation and Time Warner (Keane, 2007a, p. 101).

Guided by the media group strategy, 19 state-owned institutional TV and film groups had been set up by 2005 (Chen, 2009). The most significant being the China Media Group, the only national-level media corporation, which was

established on 6th December, 2000. It consists of six national media organisations, including CCTV, Central People‘s Broadcasting Station, China Radio International, China Film Group and the other two central media institutions. With more than 20,000 employees and total fixed assets of 21.4 billion RMB, it is expected by the Chinese government to be a national champion and to compete with foreign counterparts (Zhao, 2008, p. 100). However, SARFT stopped approving applications for establishing new State-owned media groups in December 2004 in order to draw a clear line between this type of institutional media group and market competitive media companies (Li & Li, 2007), although institutional media groups and newly-established media institutions were still allowed to set up subordinate media companies.

State-owned media groups have three characteristics:

(1) Local protectionism. Most of these groups are under local government orders and are managed in respective territories. The performance of media groups are closely related to political achievements of local government officials. In this way, a regional monopoly is strengthened instead of reduced. However, it makes it difficult for media groups to develop across a regional boundary without the assistance of local government and the central government. For instance, SARFT is the broker for the collaboration between Hunan Satellite TV and Qinghai TV. The collaboration between Shanghai TV and Ningxia TV wouldn‘t have been achieved without the approval of the Ningxia government.

(2) Lack of value chain integration. Formed at the behest of local government, most state-owned media groups were designed to broaden communication channels. They didn‘t have a clear idea of their target audience, nor did they have a plan for integrating production and broadcasting. Many have been

working to stand out from other state-owned media groups by branding. For instance, Hunan Satellite TV (HSTV) officially proposed the channel target of ‗nationwide rating, nationwide coverage, national influence and national market‘ and ‘creating the most vigorous TV entertainment brand in China‘ by insisting on the core concept of ‗Happy China‘. However, a survey shows that most media group branding strategy does not work as expected (Hu, Li, & Huang, 2011).

(3) Inflexibility. With the convergence of traditional media, internet and telecommunication, restructuring of the value chain is having an effect (Lin, 2009). The dominance of state-owned media groups that have been assisted by local government support is now challenged by private media companies that are more flexible in integrating with new media.

4.1.2 Private media companies

In addition to state-owned media groups, private media companies are an important emerging force in China. Before private capital was officially encouraged to directly invest in TV and film production in 2003, 80% of TV programs and films were produced or co-produced by private companies that were under the cover of an advertising company in 2002 (Lu, 2005). Ever since 2003, private media companies have greatly accelerated their pace of development, and most of the best-selling TV programs and films are produced or invested in by the private sector. China‘s first blockbuster, Hero (yingxiong), was co-produced by Beijing New Picture Film Company (Beijing xinhuamian yingye youxian gongsi), a private film production company.

Entertainment Live Show (yule xianchang), produced by Enlight Media, a private media company, has been sold to more than one hundred TV stations throughout China. According to Zhou Jianqing (2008), compared with state-owned media groups, private media companies are more innovative, more flexible and better at marketing and conducting multiple operations.

However they have some weaknesses:

(1) Most private TV production companies are heavily reliant on state-owned TV stations. Due to the monopolised market, which does not reward originality and creativity, they have had to compromise when negotiating with TV stations. Sometimes they have to give up the copyright; sometimes they are even unable to show their name in the program when broadcasting. The seriously unequal market also results in vicious competition, which severely prohibits development, dampens enthusiasm for innovation and lowers the quality of production.

(2) Private media companies are more vulnerable in the heavily regulated system. It is harder for them to know broader policy trends and they need to apply for production licences, whereas the state-owned media groups don‘t need to, and they are more likely to be targeted and punished by the government as they often have to break regulations in order to survive in the market. For example, SARFT asked TV stations all over China to reduce the broadcasting of criminal TV drama in 2004 at a time when the crime genre was the hottest selection in the TV drama market. As a result, a lot of private media companies suffered a great loss.

4.1.3 Foreign media groups in China

Even when taking into account the massive amount of piracy in the Chinese market, it still represents a huge market, and this has brought international companies to China. Among the different parties in the media production system in China international media conglomerates are considered to be ‗outsiders‘. They have entered China‘s media market in various collaborative forms. There are two major models for foreign media group penetration, according to Tang Runhua, research fellow in journalism research centre of Xinhua News Agency (Runhua Tang, 2005).

One model is content collaboration: this can be easily managed, costs less and gets returns quickly, but generates less profit and has limited growth potential. The collaboration of Viacom and CCTV is an example. The other model is co-developing channels, which requires large investments over a long period of time and is high risk, but has potentially high returns. News Corporation is the most renowned example of this type, and its retreat from China demonstrates how high the risk is of this model. Tang Runhua (2005) has identified several considerations for foreign media companies. The first is paying attention to the relationship with government. Of course, this really goes without saying, but it is essential not only for gaining the understanding and support of Chinese leaders at all levels but also to express friendship to China and be seen to be doing something for China. For instance, AOL Time Warner distributes the English Channel of CCTV by cable to New York, Houston and Los Angeles (Landler, 2001). Also entertainment programs are the ideal choice for a foreign media group to get into China because they have low sensitivity in terms of politics and policies and they are easier for local audiences to accept. And finally it is necessary to consider localisation in product content, distribution channels and personnel.

Foreign media companies face the difficulty of localising in China (Fung, 2006, 2008). Their business ‗know how‘ and experience derive from activities in pluralist media environments. In China they have to deal with language and cultural barriers, different managerial cultures, unfamiliar regulatory regimes and the difficulties of content localisation. A report by David Wolf, CEO of Wolf Group Asia, criticises the assumption that any Western media product will be accepted by Chinese consumers. He argues that Chinese audiences want media content about themselves and that the desire for foreign cultural products is declining (Nicholson, 2009).

4.1.4 Implications

The three types of media companies acting in China‘s media industries have different relations with government, which in turn influences the nature of the media system. The closest to government are state-owned media groups, just like the government‘s favourite son who is supported and protected; the second closest to the government are private media companies, like the government‘s step-son who is seen and protected as a family member when facing trouble, but still is not very close and will be punished or even abandoned if mistakes are made; the foreign media groups are certainly the least close to government and are, to complete the metaphor, like a neighbour living next door who is welcome when behaving in a way favoured by the family but who will be thrown out of the house at any sign of contrary behaviour.

4.2 new characteristics

Rapid commercialisation has taken place in the Chinese media industry. According to Report on Development of China‘s Media Industry 2011 (Cui, 2010, 2011), the overall output value of Chinese media industries in 2010 reached about RMB 580.8 billion, increasing by 17.8% from 2009; the total box office of 2009 climbed to RMB 10.172 billion (63.9% up from 2009) and the general revenue of the film industry was RMB 15.721 billion. CCTV‘s income from advertising in prime time of 2010 rose to RMB 12.6 billion.

4.2.1 Competition.

According to statistics, the average daily intake of TV content viewed by audiences hasn‘t changed much since 1997, although viewing options are greater. China‘s TV market has entered a new phase of competition on limited market share (G. Xie, 2005). As a result, CCTV (China Central Television), which used to be the only television medium broadcast all over China until the 1990s, now has to compete with provincial TV stations, which have completed their strategic change to national media in ten years and have grown into new forces challenging the sovereignty of CCTV in the national TV market. Indeed, when it comes to regional markets and niche markets in China, CCTV does not necessarily win all the time. For instance, Shanghai‘s TV market is dominated by the TV channels of SMG (Shanghai Media Group). Hunan Satellite TV and Anhui TV, two provincial TV stations, have gained wide acceptance in China for their strengths in entertainment programs and TV dramas. However, the bigger threat is from outside due to China‘s gradual opening of its media market, as promised in its entry to WTO. For most Chinese audiences, the most popular overseas TV station in the Chinese TV market is Phoenix TV, because of its better reaction to emergencies compared with domestic TV stations. Despite 92

having restrictions on it, Phoenix TV reached 44 million (16%) television households as early as 1998 (Ji, 2001).

4.2.2 Changing attitudes

Media is still the official organ of the Chinese government and the CCP, but a subtle change has occurred in the attitude of the Chinese government towards the media industry. Firstly, media policies are experiencing a shift from controlling to nurturing. On a visit to People’s Daily in June 2008, Hu Jintao made an important speech (J. Hu, 2008) that stressed ‗nurturing‘ both mainstream media and new media to form a clearly positioned, distinctively featured, perfectly complementary and extensively covering structure of ‗public opinion‘.

Although it is unrealistic to anticipate a huge change, the Chinese government is beginning to think differently. Influenced by the concept of soft power (Nye, 2005), the government has advocated the media sector to accomplish its mission of improving the international image of China alongside its abiding role of domestic political propaganda. According to the speech of Li Changchun, member of the Standing Committee of the Political Bureau of the Chinese Communist Party (CCP) Central Committee during the 50th anniversary ceremony of CCTV, enhancing China‘s communication capacity domestically and internationally is of direct consequence to China‘s international influence and international position, and every media worker should endeavour to ‗let China‘s voice be heard worldwide‘ (B. Li & Wu, 2008).

In order to achieve these two goals, the Chinese government has endeavoured to export its media product overseas. For example, the Deputy Minister of China‘s

Ministry of Culture, Ouyang Jian, remarked in the beginning of 2009 that China is going to develop export-oriented cultural enterprises to be more involved in international competition, and will construct creation and production bases overseas to produce cultural products according to local consumption habits (J. Ouyang, 2009).

4.2.3 Development of ICTs.

In late 2008 and early 2009, China accomplished a series of reorganisations of the telecommunication industry and issued 3 pieces of 3G licenses to the newly restructured China Mobile, China Telecom and China Unicom. Additionally, China‘s first Direct Broadcasting Satellite was successfully launched in June 2008 and subscribers to digital cable television programs had exceeded 40 million householders by the end of 2008. All of these developments of new ICTs in China imply an inevitable trend of Chinese media industry, which is the convergence of telecommunication networks, radio and TV networks, and the internet, a convergence of traditional media industries and new media industries (Cai & Tang, 2008). Zhang Haitao, the deputy chief of SARFT, said that a digitalised network of broadcasting will be carried out in three steps: digitalise the production, then the transmission, and the terminal last (H. Zhang, 2008). Moreover, an industry standard is under development for the convergence and unification of telecommunication networks, broadcasting networks and the internet. (Tencent, 2008). Consequently, the regulatory role of market is probably growing, and a new shift regarding media polices is likely to come along with the emerging development, which will bring new features to the Chinese media industry.

4.3 Media industries development

According to National Bureau of Statistics of China, the annual growth rate of the Chinese economy was 11.2% during the period of the eleventh five-year plan. By the end of 2010, China had become world‘s second largest economy, with GDP of USD 5879.1 billion (NBSC, 2011b). The steady and fast growth of the national economy has provided a solid foundation for the development of China‘s media industries. After deducting price factors, the per capita disposable income of urban residents in China rose by 9.7% per year during the period mentioned above, and the average spending on cultural and entertainment activities rose by 17.9% per year (NBSC, 2011a). This delivers the message that there is a huge potential for consumption of media products in China and for advertising products through the media to Chinese consumers.

As described in Chapter 3, following 30 years of reform, the Chinese government has been separating media industries (qiye) from media institutions (shiye). However industries and institutions are still interdependent and mutually restrained. According to Director of Media Economics and Management Research Centre at Tsinghua University, Cui Baoguo, the overall output value of China‘s media industries reached 580.8 billion RMB in 2010, nearly doubling the overall value of 2004 (Cui, 2005, 2011).

Figure 2 The annual overall output value of China’s media industries (2004-2010) (Cui, 2005, 2006, 2007, 2008, 2009, 2010, 2011)

700 580.8 600 481.1 500 490.796 Annual overall output value 400 423.656 422.08 (billion RMB) 300 320.5 298.1 200

100

0 2004 2005 2006 2007 2008 2009 2010 95

4.3.1 The TV industry

China has a huge TV consumption base. There are 18.73 million households with cable TV subscriptions and 87.98 million households with digital cable TV subscriptions in China in 2010; TV coverage has extended to 97.6% of the population of the whole country. Driven by market demand, China‘s TV industry has developed quickly. China‘s total revenue for radio and TV has grown at 20% per year during the eleventh five-year plan period and hit 223.8 billion RMB in 2010, according to Zhang Haitao, the Deputy Director of SARFT (SARFT, 2011b).

Figure 3 Growth of radio and TV revenue 2005-2009 (SARFT, 2010c)

2000

Government subsidies (100 million 1500 RMB)

Cable TV fee (100 million RMB) 1000 Advertising (100 million RMB)

500 Total Revenue (100 million RMB)

0 2004 2005 2006 2007 2008 2009

Among the four types of income sources, advertising accounted for 42% of the total revenue of radio and TV industry in 2009. The main beneficiaries of advertising are state-owned TV stations, since they are the only broadcasting platform in China, although some TV production companies are able to occupy a small share by using such strategies as placing advertisements in their products in TV dramas. TV advertising profit has been rising since 1990, and in 2008 China‘s total TV advertising was RMB 60.016 billion. 96

Figure 4 Structure of Radio and TV revenue in 2009 (SARFT, 2010c)

42% Others Government subsidies

22% Cable TV fee

Advertising

23% 13%

Figure 5 Annual TV advertising (1990-2008) (adopted from Cui, 2010)

700 600.56 609.16 600

500 TV advertisng (100 404 million RMB) 400 291.54 300 231.03 200 168.91 135.63 90.79 100 44.76 5.61 20.54 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2007 2008

Currently there are 366 TV stations and 1173 TV channels8 in China, according to SARFT‘s list of broadcasting institutions. Hence TV broadcasting, production and trading are driven by the broadcasting needs of TV channels. SARFT‘s data

8 Only national TV stations, provincial TV stations and city TV stations are counted; whereas county TV stations and education TV stations are excluded. More information can be retrieved at: www.sarft.gov.cn

shows that in 2009 about 2.65 million hours of TV programs9 were produced, 4.72 million hours were sold, and around 15.78 million hours were broadcasted. Most content is purchased and exchanged between TV stations and production companies. 50.2% of the broadcasting content was obtained by purchasing and exchanging in 2008. Self-produced content is another important content resource. The frequent trading and exchanging of TV programs led to a huge increase in the number of production companies in China. According to SARFT, there were 4,678 TV content production companies in China in 2011, nearly twice the number of 2007.

Competition is becoming more obvious due to the rapid expansion of TV channels. Many television stations copy other stations‘ successful formats rather than create new formats. For example, the popularity of HSTV‘s singing context show, Super Girl (chaoji nvsheng) in 2005 induced a fever for talent shows (xuanxiu jiemu). With the success of Jiangsu Satellite TV‘s dating game show, If you are the One (feicheng wurao), many TV stations, including Dragon Television, HSTV and Zhejiang Satellite Television, started producing their own dating shows.

The most important type of content is TV drama and films. Nearly 7 million hours of TV drama and films were shown on TV in 2009, which amounted to 44.26% of total broadcasting hours in that year. There were 436 TV dramas and a total of 14,685 episodes produced in 2010. In a report from China Economic Weekly, the former director of SARFT, Wang Taihua, said that TV drama‘s

9 In this thesis TV program refers to all the TV content for broadcasting, including news,

TV column, TV drama, advertising, and others types

contribution to TV stations advertising income was over 50%, and that TV drama occupied about one third of the audience share (Zhou & Wang, 2011).

However, TV drama production is the most vulnerable sector to government policy adjustments. For example, crime drama was the most popular genre in 2003, but SARFT started to ‗purify‘ screens in 2004 in line with the CCP‘s campaign of ideological and moral education of juveniles. TV stations were banned from broadcasting crime dramas in prime time in 2004, and were required to reduce the total broadcasting time of crime dramas. According to Tang Haifei, a producer from China International Television Corporation, the whole TV drama industry experienced a round of reshuffling in that year, and many production companies who had invested a lot of capital in producing crime dramas had to close due to capital turnover difficulties.

Figure 6 TV drama amount and sales (2005-2010) (SARFT, 2010c)

600 2500 529 514 500 502 500 2100 2000 402 400 1600 1500 1500 1400 TV drama amount 300 1100 TV drama sales (million RMB) 1000 200

500 100

0 0 2005 2006 2007 2008 2009

Figure 6 shows that TV drama sales increased significantly in 2009. However the growth is related to the government‘s preference for cultural and creative industries. Massive investment has been injected into TV and film production

whereas the amount of senior personnel has not grown much. The famous media producer, Peng Sanyuan, made this observation on her Weibo (the most popular Chinese microblogging website, akin to a hybrid of Twitter and Facebook) on 15th April, 201210. She commented that the quality of TV production is declining despite fast growth. As a result, the growth trend of TV content production is hard to sustain in the long run since nowadays audiences have more choices than simply passively accepting programs and TV dramas screened on television.

Figure 7 Broadcasting and viewing proportion of TV drama (2006-2009) (Cui, 2010)

Proportion of the total 100.00% broadcasting time

Proportion of the total 80.00% viewing time

60.00%

34.60% 34.10% 40.00% 32.60% 32.20%

20.00% 26.10% 25.40% 25.00% 24.70%

0.00% 2006 2007 2008 2009

The domestic TV market is already saturated. There are 32 satellite TV stations in China and broadcasting space rises every year. In addition, the expansion of digital TV has further increased content and channels. However CSM‘s ratings survey data shows that viewing time has not changed much since 2000. Therefore the competition between TV stations is about fighting for a bigger piece of the cake rather than making a bigger cake. TV production companies have to extend their target market to the internet in order to increase the profit,

10 Peng Sanyuan is a famous TV producer in China. Her Weibo address is: http://weibo.com/u/2028778307

100

while also maintaining a good connection with TV stations. For instance, Fight and Love with a Terracotta Warrior (gujin dazhan qinyongqing) was sold to www.pps.tv, China‘s biggest internet TV provider for RMB 2.7 million RMB. Most importantly, realising that broadcasting is no longer the only king in the market, both TV stations and production companies are paying more attention to innovation in order to enhance content quality and advance brand building to win a bigger audience share.

4.3.2 The film industry

China is now one of the world‘s three biggest film producing countries, along with India and the US. The film industry has developed at a high speed. In 2010, the total income of the film industry was RMB 15.721 billion, 47.4% higher than 2009; 526 films were produced, six times the amount in 2001; national box office achieved 10.172 billion RMB, 64% higher than the box office in 2009; and 87 awards were won in 25 international film festivals.

Figure 8 Income of China’s film industry (2004-2010) (Cui, 2011)

Domestic box office (billion RMB) 12 TV rights fee (billion RMB)

8 Total income (billion RMB)

0 2004 2005 2006 2007 2008 2009 2010

101

Figure 9 Film amount and urban box office (2001-2010) (Cui, 2011)

Film amount Urban box office (billion RMB)

600 12

500 10

400 8

300 6

200 4

100 2

0 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Figure 8 shows that among different types of income sources, box office revenues have grown the fastest, indicating that there is a strong domestic film consumption base in China. Due to the quota restriction on importing films from overseas, domestic films have occupied over half of the total box office for many years. In general, the top ten domestic films performed better at the box office than the top ten imported films, except for Avatar, which swept across the globe in 2010, as Table 4 shows. Blockbusters have become the most favoured type of film production. The investment in seven of the top ten domestic films exceeded RMB 100 million.

Table 6 Box office of the top ten domestic films and the top ten imported films in major Chinese cities 2010 (January to September) (SARFT, 2010a) Domestic films Imported films Box Box office office Ranking Title Ranking Title (million (million RMB) RMB) After Shock 1 67.332 1 Avatar 137.870 (tangshan dadizhen) 2 Let the bullets fly 60.365 2 Inception 44.207

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(rang zidan fei) Detective Dee and the mystery of the Alice in 3 phantom flame (di 44.137 3 22.640 Wonderland renjie zhi tongtian diguo) The 4 Ip man 2 (ye wen 2) 29.228 4 21.876 Expendables Harry Potter If you are the one 2 and the 5 23.404 5 20.581 (feicheng wurao 2) Deathly Hallows: Part 1 Sacrifice (zhaoshi 6 19.310 6 Iron Man 2 17.637 guer) Little Big Soldier Clash of the 7 16.218 7 17.518 (dabing xiaojiang) Titans Just Call Me Prince of 8 Nobody (daxiao 15.393 8 Persia: The 15.822 jianghu) Sands of Time The Love of the Hawthorn Tree Resident Evil: 9 14.662 9 13.795 (shanzhashu Afterlife zhilian) 10 14 Blades (jinyiwei) 14.470 10 Toy Story 3 11.920 Sum 304.159 Sum 323.867

In 2010 the box office for domestic films was RMB 5.734 billion, which was 56.3% of the total box office in China. But this reveals a big issue for China‘s film industry: it makes films in a high quantity, but many of these are of a low quality. In 2010 alone, only about 260 domestic films were shown in cinemas, although 526 films were produced in total (ent.ifeng.com, 2011). Half of the films were not able to sell to cinemas mainly because of the low quality. In contrast, only 20 films were imported and shown in China from overseas, but still, though competing with the 260 domestic films shown in Chinese cinemas, they managed to gain 43.6% of the box office in 2010. 103

Figure 10 Structure of China's box office (2004-2010)11

Box office income of domestic films (billion RMB) Box office income of imported films (billion RMB)

100% 90% 80% 6.7 9 11.8 15.2 17.8 27 44.38 70% 60% 50% 40% 30% 8.3 11 14.4 18 25.6 35.1 57.34 20% 10% 0% 2004 2005 2006 2007 2008 2009 2010

Encouraged by rising box office revenues, 313 new cinemas were opened and 1,533 cinema screens were added in 2010. The increase in cinema construction in China is a promising development for China‘s film industry, a growth that appeals to the Chinese government, banks and other financial institutions. For example, half of the investment of After Shock (tangshan da dizhen), the best-selling Chinese film of 2010 came directly from Tangshan city government funding. Twenty-four provinces and municipalities have set up special funds for cultural industries, allocating more than 27 billion RMB by October 2010. Ten commercial funds for cultural industries of 42.75 billion RMB controlled by government capital have been established from 2009-2010 (www.ccizone.com, 2011). State-owned banks have started to provide loans for film production. Huayi Brothers received a loan of 120 million RMB from Industrial and

11 Data used in this figure is collected by author from serial film administration news on

SARFT website. More information can be found at http://www.sarft.gov.cn/catalogs/gldt/20070831155418550472.html

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Commercial Bank of China (ICBC) in 2009. ICBC also loaned Poly Bona 55 million RMB in the same year. In the ‗Guiding opinions on promoting film industry development‘ released by the State Council of China in 2010, banks and financial institutions are encouraged to develop more and newer ways of investing in the film industry (SCoC, 2010).

Due to the global financial crisis, investors have been more discreet about their investment in China. The Chinese government‘s promotion and support on creative industries encourages ‗hot money‘ shifting into the creative industries (J. Zhang, 2009). In addition to government capital and state-owned commercial banks, more private investment funds are involved in film production, tempted by the huge returns in the film industry. Hot money from coal mining and real estate has flooded into the industry. 140 billion RMB has reportedly been taken from the mining industry due to government adjustments in Shanxi Province, China‘s major coal base – the film industry is a favourite area for investors to put their money (H. Chen, 2010). It‘s said that there are over ten film investment funds in China based on hot money. Some are Hong Kong based, some are established by local private investors in mainland China and some are joint-ventures with foreign capital (S. Zhang, 2011).

According to Li Erwie, the co-founder of Huayingxing Film TV and Entertainment Fund, in a speech at the Cultural Creative Industries Investment, Financing and Capital Operation Forum in 2011 in Beijing, these funds operate in five ways: directly investing in films, which may require involvement in the actual production itself; investing with a fixed annual rate of return; copyright repurchase or mortgage; purchasing the complete copyright or regional copyright; and prioritised paying back (Li, 2011). Even some internet companies are being attracted to the film industry. Among them are Shanda Interactive Entertainment Limited, the biggest online game company in China, and Tencent

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(www.qq.com), the largest IM service provider in China. The stock market is also another useful way of fundraising. Huayi Brothers listed in the Chinese share market in 2010, Poly Bona in the NASDAQ, and Orange Days Entertainment in Hong Kong. CEO of Huayi Brothers, Wang Zhongjun, has said that China‘s film industry doesn‘t lack funding, but good personnel and films (L. Yang, 2011).

4.5 Soft power and internationalisation

Influenced by the soft power strategy, the internationalisation of China‘s media industries includes four aspects: exporting media products overseas; extending broadcasting channels internationally; international capital operations; and co-production.

4.5.1 Media export

According to statistics, the export of China‘s TV and film products has been growing in the past few years. The total export income of China‘s media industries was 2.1 billion RMB in 2007 and rose to 3.358 billion RMB in 2009. The average annual growth rate is about 26.5% (H. Li & Wan, 2010). According to SARFT‘s 2011 report, China‘s TV programs, drama and films have been exported to more than 100 countries and regions around the world, among which Southeast Asia is still the most important market for mainland‘s media products (SARFT, 2011c, p. 133). This report concludes that private media companies are becoming a significant part of China‘s media exports. Four private companies, Star Media Limited (sida shidai) in Beijing, Beauty Media (qiaojiaren) in Beijing, Huayi Brothers Media (huayi xiongdi) in Beijing and Zhongnan Animation Company (zhongnan katong) in Zhejiang Province, are the most 106

important export enterprises, accounting for 71% of exports among 59 key media export companies in China. Geographically, Beijing is the most important hub for China‘s media exports; there are 17 key media export companies in Beijing, which accounted for more than half of the total media export of China in 2010 (ibid, p. 134).

Film is the biggest income source compared to other exported media formats, such as light entertainment shows and TV dramas. In 2010, 47 films were sold to 61countries and regions. The international income, including box office overseas and sales, was 3.517 billion RMB in 2010, 26.9% higher than in 2009, although Figure 11 shows that the growth of China‘s film industry‘s international income is stable, with international income only accounting for about 25% of the total income of China‘s film industry. The major international markets for China‘s film industry are the US, Asia-Pacific and Europe. The USA is a particularly important market for Chinese films. In 2009, two films were sold to the USA and the total income, in the USA, was 610 million RMB, 22.1% of the total international income of China‘s film industry in 2009. 15 films were sold to Europe for an income of 406 million RMB. 8 films were sold to Japan for an income of 761 million RMB. 11 films were sold to Korea for 314 million RMB (Cui, 2011).

Figure 11 International income of China's film industry (2004-2010) (Cui, 2011)

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Overseas sales and box office (billion RMB)

4 3.517 3.5 2.759 3 2.526 2.5 1.91 2.02 2 1.65 1.5 1.1 1 0.5 0 2004 2005 2006 2007 2008 2009 2010

Figure 12 The international market of Chinese films in 2009 (Li & Wan, 2010)

USA

Others USA Japan 24.21% 22.11% Korea

Europe Europe 14.72% Japan Others Korea 27.58% 11.38%

Generally, there are two types of exported films: Kungfu films and art films. Most Kungfu films exported overseas are co-productions with Hong Kong, and these films account for most of the box office income, as Tables 8 and 9 show. But according to the law of diminishing returns this unitary type of exported films is too simple and will ultimately lose audiences, who generally look for novelty (Yan & Li, 2010). Art films (yishu pian), the other main category, are normally aired at international film festivals and events. However, few are shown in commercial cinemas. As Tom Wang, CEO of Beidong Media, who used to work in Huayi Brothers and now owns his own media and animation

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company, said: they are not very helpful for the export of Chinese films since they have very limited target consumers. (Interview with Tom Wang, 2009)

Table 7 Chinese Kungfu films exported overseas (2005, 2006, and 2008) (Yan & Li, 2010) Amount of Kungfu Box office Percentage of the overseas box Year films exported (billion RMB) office of Chinese films in that year 2005 4 15.7 95.4% 2006 5 9.6 83% 2008 6 16.5 95%

Table 8 Amount of exported Chinese films to major overseas market (2008, 2009) (Yan & Li, 2010) Amount of exported co-production films Amount of exported films Country 2008 2009 2008 2009 USA 4 8 2 2 Japan 8 9 6 8 Europe 13 18 9 15 Korea 15 16 11 11

The export scale of China‘s TV programs is small compared with the film industry, but it is increasing. Traditionally, the main target markets for China‘s TV programs are Taiwan, Hong Kong, Southeast Asia, Europe, the US, Japan and Korea. More recently, the Middle East and Africa have also become important export markets. The rise of Arabian and African television markets is closely related to China‘s international political strategy.

Table 9 Import and export of China's TV programs in 2008 (SARFT, 2009) Latin Item Europe USA Japan Korea Africa Sum America Spending on importing TV 71.52 70.29 5.48 35.78 79.68 N/A 454.21 programs (million 109

RMB) Total income on exporting TV 15.53 10.11 1.89 13.41 2.09 2.53 124.76 programs (million RMB) Time length of imported TV 6,551 7,463 165 582 2,869 N/A 20,550 programs (hour) Time length of exported TV 346 1,464 124 846 410 500 10,300 programs (hour) Amount of imported TV 3 10 2 18 34 N/A 122 dramas Amount exported 11 12 1 19 9 13 149 TV dramas Spending on importing TV 4.52 1.45 3.24 29.01 75.72 N/A 242.93 dramas (million RMB) Total income on exporting TV 14.10 9.12 1.05 12.73 1.40 0.97 75.25 dramas (million RMB) Episodes of imported TV 54 20 67 407 1,439 N/A 3,594 dramas Episodes of exported TV 239 898 102 801 304 542 6,662 dramas

The program genres exported are mostly TV drama and documentary. During the 49th MIPTV in Cannes in 2010, the sale value of exhibited Chinese TV programs was USD 8 million, in which CITVC (China International Television Corporation) won USD 3.31 million as a sale agent of TV dramas and documentaries. 199 TV dramas of more 6,700 episodes were sold overseas in

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2010. The revenue from exporting TV dramas was USD 27 million, 35% higher than 2009. But, as the Director of TV drama Division of SARFT, Li Jingsheng, points out, ‗China is a big country of TV drama, but not a strong country of TV drama‘ (Dong & Zheng, 2011). He said that Chinese TV dramas have a small market share in the world; the major audience is limited to Chinese diasporas. The price, which used to be USD 25,000 per episode now is only USD 10,000 per episode.

Some entertainment shows are exported overseas, though it is a very small part of China‘s TV program export. In 2010, the income from entertainment show exports was USD 2.2 million, accounting for 4% of the total export revenue. I love the lyrics (wo ai ji geci), an entertainment show produced by ZTV weishi), was sold to WaTV in Malaysia for USD 1,000 per episode. This show has been broadcast in Indonesia, Malaysia and Brunei. It is reported that MTV Asia, covering Hong Kong, Macau, Taiwan and Singapore, showed intent to buy the show (www.sina.com.cn, 2008).

There are three ties – cultural, economic, and political – which connect China with its major export markets. Europe and North America have a strong economic relationship with China; East Asian countries such as Korea and Japan have inherited Confucian culture from China, while Hong Kong and Taiwan share the same Chinese cultural and historical traditions; the export to African and Arabian countries looks more like a quid pro quo due to political interest between these countries and China.

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4.5.2 International capital

The internationalisation of China‘s media industries is reliant on absorbing foreign capital. A market survey report by Zero2IPO Research Centre, one of China‘s most authoritative investment research institutions, shows that China‘s media and entertainment industry (media & entertainment industry includes outdoor media, TV and film, advertising, animation and publishing in this report) had 150 investment deals in 2010, of which 118 disclosed an investment amount, which totalled USD 1.68 billion (Zhang, 2010). Ni Zhengdong, the CEO of Zero2IPO Group, expressed the view that foreign venture capital, most notably IDG Ventures and Sequoia Capital, had been active in China‘s film and TV industry. TV & film industry is the second largest industry sector for foreign investment, behind outdoor media. However, according to Ni, foreign investment is now more cautious in China‘s TV and film industry due to policy constraints and the uncertain returns from the industry.

As stated previously in this chapter, the Chinese government has a strong control over foreign investment in media industries, especially TV. Therefore, instead of investing directly, foreign investors choose to collaborate with local companies. The most famous example is Rupert Murdoch. He had China‘s media market in his sights for a long time. His News Corp lost heavily in China in the early 1990s. Then he bought Star TV, a pan-Asian satellite service established by Richard Li, the son of Li Kai-xing, Hong Kong‘s biggest tycoon (Curtin, 2005). After being banned for years, SARFT approved Star TV‘s limited landing, in China‘s three-star hotels and foreign residential districts in 2003. In return, News Corporation, through its TV network, facilitated the English International channel of CCTV‘s landing in the UK and France. In 2005, Star had tried to cooperate with the Qinghai Satellite TV in program production in order to bypass the policy limitation to make its own programs and deliver

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content across the country. But this loophole was terminated by the Chinese government.

In 2008 Murdoch sold News Corporation‘s controlling stake of three TV channels in China – the Mandarin channel Star TV, Star International Channel and Channel [V] music channels – and Star Chinese film library (Fortune Star) to the Chinese Culture Industry Investment Fund (CMC), China‘s first private equity fund in cultural industries, whose main sponsors and investors included the Shanghai Media Group (SMG) and China Development Bank.

However it is not altogether accurate to say that Murdoch has retreated from China. Rather he changed his strategy. Murdoch has built partnerships with Chinese media companies for a long-term collaboration instead of playing solo in China. In this acquisition, an agreement was reached by News Corp and CMC to set up a joint venture called Star Chinese Media (xingkong huawen chuanmei) to operate the three TV channels and the Chinese film library. By selling his share, Murdoch is more protected and gains more opportunities. Wei Pengju, the executive dean of Cultural and Creative Research Institute of Central University of Finance and Economics of China, has commented that international companies are penetrating China‘s market at a low angle and are scattering investment in more projects of smaller scale. In doing so, international investors will have a more promising return on China‘s rapidly expanding cultural market by making good use of their Chinese partner‘s resources (Zheng, Dong, & Chen, 2011).

Also, due to policy restrictions, foreign investors are gradually shifting to the safer zone of cinema building, since they are not allowed to invest directly in TV production companies, nor can they set up their wholly-owned film or TV companies. However, investing in cinemas is not as simple as it may look.

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Warner Brothers, the first international cinema operator in China, fully withdrew its business in 2006 as it had to give up its controlling stake in all its co-invested cinemas after policy changes made in 2005. Liu Zhiguang, who has extensive experience in marketing major Hollywood blockbusters in China and used to be fully in charge of marketing Warner Bros in China, explains: ‗Warner Bros is one of the Fortune 500 companies but by contrast most international investors hold different attitudes and lay low in earning money (p. ibid).‘ However, according to Liu, the main problem for international media businesses investing in China‘s cinemas is the high real estate cost, but, on the other hand, international businesses are deeply tempted by the prospects for a rapidly developing film industry in China. They are more concerned with whether or not they can make money rather than how many cinemas they can open. So far, investors from Korea, Japan, Hong Kong, France and the USA have co-established cinemas in Beijing, Shanghai, Guangzhou and many other Chinese cities.

In addition to cinema building, foreign investment favours film production and distribution. By investing in the production and distribution sectors they can gain the international copyright easily and operate in the international market. For example, the China Film Group received investment from New Media Fund, operated by International Data Corporation (IDG), in 2007. Poly Bona raised funds from Sequoia Capital, SIG Asia Investment and Matrix Partners. Furthermore, China‘s media companies list shares on the international stock market to raise funds across the world. Orange Sky Entertainment Group (chengtian yule) bought the controlling stake of Golden Harvest Group, a film company listed on Hong Kong Stock Exchange, in 2007, and made its transition into a listed company in Hong Kong. Poly Bona landed in New York and started its IPO on the NASDAQ on 9th December, 2010.

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4.5.3 Co-production

Nowadays, investing in specific film shooting instead of investing in companies is the foremost strategy that foreign capital takes when entering China‘s film industry, according to Yang Jun, the vice director of Cultural Finance Centre of Cultural Industries Institute, Peking University (Zheng, et al., 2011). There were 34 co-production films in 45 films sold overseas in 2009. Hong Kong has always been China‘s most important partner in film co-production. Statistics show that China co-produced over 200 films with Hong Kong, but only about 40 with Taiwan, and around 50 with other countries from 1978 to 1998 (Yin, 2008). The Closer Economic Partnership Arrangement (CEPA), the first free trade agreement ever concluded by mainland China and Hong Kong, in 2003, secured access to the mainland market for Hong Kong‘s film industry. Under CEPA, Hong Kong film companies are allowed to set up solely-owned film distribution companies in several pilot cities in mainland China. Most of the highly successful films are now co-produced by Hong Kong and mainland China.

Yin (2008) has pointed out that CEPA has actually changed the identity of Hong Kong movies, from overseas films to domestic films. This has allowed Hong Kong and mainland China co-produced films to enjoy the same treatment as domestic films on the mainland. Similarly, co-production has taken place in the TV industry, although it is not as significant as in the film industry. Korea, Japan, Thailand, Malaysia, Hong Kong and Taiwan have all co-produced TV dramas with Chinese TV production companies (Zhu, Keane and Bai 2008). Among these countries and regions, Hong Kong and Taiwan are the most supported by the Chinese government. In 2006, the government announced that co-produced TV dramas of Hong Kong and the mainland could be treated as domestic TV dramas (ent.people.com.cn, 2006). Co-produced TV dramas of

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Taiwan and the mainland have been accorded the same treatment since 2008 (tw.people.com.cn, 2007).

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Chapter 5 Beijing: three principles of media capital

As Chapter 3 and 4 have shown, Beijing is China‘s most important media centre. It attracts a huge number of media companies and organisations, ranging from TV stations production companies and agencies, and the greatest concentration of TV practitioners. This chapter begins by exploring how Beijing‘s status as China‘s political and cultural centre endows it with certain advantages in accumulating media industries, hence the focus is on the first principle of Curtin‘s media capital idea: the logic of accumulation (Curtin 1). The second part of the chapter examines trajectories of creative migration (Curtin 2), and the reasons why creative talent accumulates in Beijing. However, the question this raises is: how do these people express their creative selves?

Miller et al. have used the term ‗new international division of cultural labour‘ (NICL) to show how Hollywood has brought workforce from around the world into its own orbit and coined the term describe Hollywood‘s action (Miller, et al., 2001). At a national rather than global level, Beijing is a place that attracts people from across China. People interact, transforming and remaking Beijing‘s socio-cultural diversity (Curtin 3).

The chapter focuses on media companies, activities, and personnel in Beijing, looks into some areas where creative expression is evident and, in doing so, investigates how intersections of people and elements of socio-cultural diversity influence the development of media industries in Beijing; it examines the effects of people on media industries in Beijing. In doing this, I want to ask the following questions:

 Does Beijing‘s diversity equate to forces of socio-cultural variation as described by Curtin? 117

 Does the creative ethos of Beijing—particularly the tension between political conformity and the desire to be an international city—translate into a distinctive form of media capital?

While Beijing‘s audiences like a variety of cultural and media forms, and while Beijing has high levels of creative talent, its media production output is characterised by a high degree of conformity or, in other words, a lack of diversity. This is a paradox of China, and of Beijing as its media capital.

5.1 Curtin 1: Forces of Beijing’s accumulation

5.1.1 TV industry: forces of accumulation

In 2003, Wang Changtian estimated that nearly 80% of China‘s TV production organisations and companies (including TV drama production companies) were in Beijing (Ding, 2003). Since then, China‘s TV industry has further consolidated in Beijing. Advertisers, especially of international brands, value CCTV as the biggest and best publicity channel for their products, due to its credibility as the national media outlet and its established strength in the national market. Hence, CCTV is a precious resource for private companies whose profit mainly comes from selling advertising time.

Because of China‘s ‗going out‘ media strategy, CCTV is strongly supported by the central government. Guo Zhenzhi, from Tsinghua University remarks: ‗CCTV has everything which can be achieved by spending money‘ (Guo, 2008, p. 240). Accordingly, the expansion of CCTV and state-owned TV companies provides private TV production companies with many outsourcing opportunities.

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For companies aiming at the national market in particular, CCTV‘s standing as the industry benchmark facilitates its power over contractors. Lu Jia, the Chinese co-founder of Beijing Somebody International Media, a Chinese-Taiwanese joint venture for TV production, said that their experience with CCTV is appreciated when they seek business opportunities from provincial TV stations and city TV stations that are outside of Beijing. (Interview with Lu Jia, 2009) His colleague, Yang Li, added that their views on program production are more likely to be adopted, as they are treated as the experts from Beijing working with CCTV. (Interview with Yang Li, 2009)

Private production companies that used to heavily rely on their connection with TV stations are thrown into the market. They are forced to improve their production quality, diversify their business scope and enhance their visibility. They cluster in Beijing. Zhou Hao, the co-founder of Beijing Golden Screen Culture Communication Co., Ltd. says:

Beijing is the best place for us to do TV business. You can spend less money to

attain better results. For instance, most TV stars live in Beijing. I can easily get in

contact and discuss shooting plan with them ... And the publicity effect is better if

we hold the press conference or the promotion campaign in Beijing.

(Interview with Zhou Han, 2009)

The competition brought about by agglomeration lowers production costs. Li Yan, a freelance film director indicated that the cost of shooting TV programs or dramas is comparatively lower in Beijing because ‗you can hire better people and equipment with lower price here due to the competition‘. (Interview with Li Yan, 2009)

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5.1.2 Film industry: forces of accumulation

In 1999, the China Film Company, the Beijing Film Studio, the China Children‘s Film Studio, the Beijing Film Processing and Recording Technology Plant, the China Film Equipment Company, the China Film Co-production Company, the Huayun Film and TV Disk Company Ltd., and the Movie Satellite Channel merged to form the China Film Group Corporation (CFGC) in Beijing, ‗the aircraft carrier of China‘s film industry‘. (Jin, 2010) Representing the biggest investment by the Chinese government in the film industry, CFGC‘s business approach is comprehensive. It covers the whole film industry chain in China, from production, shooting base, post-production, promotion and marketing, cinema chains, and distribution to derivative products. More importantly, because of the resources and personnel it has obtained through the merger, CFGC controls the import and export channel for Chinese films; in addition to producing and co-producing films, it operates the largest cinema chain in China.

In 2009 CFGC distributed 146 domestic films and 39 imported films in China, and the national box office for these films hit at four billion RMB, accounting for 64.45% of the major film market in China. CFGC also holds and participates in six film circuits in China and occupies nearly half of the country‘s cinema market. CFGC, as the representative of the Chinese government in the film industry, also invests in cultivating and recruiting film talent. The CEO of CFGC, Han Sanping, states that CFGC has the responsibility to recruit young film directors in order to drive China‘s film industry to prosper in accordance with the CFGC Young Directors Film Production Plan (Han & Hu, 2008). The Movie Satellite Channel (dianying pindao), known as CCTV-6, is owned by CFGC and broadcasts nationally via CCTV‘s satellite. This helps CFGC to consolidate its dominant position in China‘s film industry. Attracted by CFGC‘s

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powerful influence over China‘s film industry, investment and film companies keep coming to Beijing and seeking collaboration with CFGC. CFGC‘s industrial chain also mothers a large number of small and medium size film companies in support sectors in Beijing.

Another major step taken by the government is building cinema chains as an effective approach to control market access. The central government announced at the end of 2001 that production companies and studios were allowed to sell films directly to cinemas, and trans-provincial operation and collaboration was encouraged. Since then, cinema chains have been built in each province and municipality. In 2002, thirty cinema chains were built in 23 provinces and municipalities. As Table 11 shows, nearly every province had its own cinema chains. Beijing didn‘t have an obvious advantage at the beginning. But as Table 12 (which is generated based on SARFT‘s statistics) shows, in 2010, three of China‘s five biggest circuit companies are now in Beijing (Wanda Circuit Co., China Film Xingmei Circuit Co. Ltd., and Beijing New Film Association Company Ltd.). In addition, another three circuit companies in the list of China‘s top ten cinema chains, Shenzhen China Film Southern New Line Company Ltd., Sichuan Pacific Circuit Company Ltd., and Liaoning Northern Circuit Company Ltd. are held or co-invested by film companies in Beijing, by CFGC and Beijing New Film Association Company in particular. Moreover, Beijing Wanda Circuit Company Ltd., which has investment from a real estate company in Dalian, Liaoning Province, has quickly grown into China‘s biggest cinema chain.

Table 10 China's major cinema chains in 2002 (adopted from Rong Tang & Shao, 2005, pp. 284-285) Locality Quantity Name Type Cinemas Screens China Film Beijing 2 Trans-provincial 22 41 Xingmei Circuit

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Company Ltd. (zhongying xingmei yuanxian) Beijing New Film Association provincial 57 85 Company Ltd. (xinyinglian yuanxian) Shanghai United Circuit Trans-provincial 56 134 (lianhe yuanxian) Shanghai 2 Shanghai Ever Shining Circuit Company Ltd. Trans-provincial 15 22 (daguangming yuanxian) Sichuan Pacific Circuit Company Ltd. Trans-provincial 36 96 (taipingyang yuanxian) Sichuan 2 Province Sichuan Emei Film Distribution and Trans-provincial 26 82 Circuit Company Ltd. (emei yuanxian) Hunan Xiaoxiang Film and TV Communication Trans-provincial 17 28 Hunan Company Ltd. 2 Province (xiaoxiang yuanxian) Hunan Chuxiang Film Trans-provincial 10 24 Company Ltd.

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(chuxiang yuanxian) Zhejiang Shidai Great Circuit Company Ltd. Provincial 66 123 (shidai dianying da yuanxian) Wenzhou Yandang Circuit Company Ltd. Provincial 20 37 Zhejiang (wenzhou 3 Province yandang yuanxian) Zhejiang Xingguang Circuit Company Ltd. Provincial 22 36 (zhejiang xingguang yuanxian) Jiangsu Heyday Asia Circuit Company Ltd. Trans-provincial 29 45 (shengshi yaxiya yuanxian) Jiangsu Oriental Jiangsu Film Company 3 Provincial 12 33 Province Ltd. (dongfang yuanxian) Jiangsu Yangtze Circuit Management Provincial 25 41 Centre (yangzi yuanxian) Guangdong China Film Guangdong Southern Circuit 3 Provincial 69 88 Province Company Ltd. (huaying nanfang

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yuanxian) Shenzhen Film Circuit Company Ltd. Provincial 11 15 (shenying yuanxian) Guangdong Pearl River Circuit Trans-provincial 28 53 Company Ltd. (zhujiang yuanxian) Liaoning Northern Circuit Liaoning 1 Company Ltd. Trans-provincial 45 91 Province (beifang yuanxian)

Table 11 China’s top ten cinema chains in 2010 (data source: SARFT) Box office Ranking Name Locality Income (million RMB) Beijing Wanda Circuit Company Ltd. 1 Beijing 1,402.65 (wanda yuanxian) China Film Xingmei Circuit Company 2 Ltd. Beijing 1,213.27 (zhongying xingmei yuanxian) Shanghai United Circuit 3 Shanghai 107128 (lianhe yuanxian) Shenzhen China Film Southern New Guangdong 4 Line Company Ltd. (zhongying 950.71 Province nanfang xinganxian) Beijing New Film Association 5 Company Ltd. Beijing 79.873 (xinyinglian yuanxian) Guangzhou Jinyi Pearl River Circuit Guangdong 6 Company Ltd. 68.883 Province (jinyi zhujiang yuanxian) Zhejiang Time Movie World Zhejiang 7 Company Ltd. 42.043 Province (shidai dianying dashijie)

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Guangdong Great Ground Circuit Guangdong 8 Company Ltd. 37.552 Province (dadi yuanxian) Sichuan Pacific Circuit Company Ltd. Sichuan 9 35.982 (taipingyang yuanxian) Province Liaoning Northern Circuit Company Liaoning 10 Ltd. 32.041 Province (beifang yuanxian)

Huayi Brothers, Beijing New Picture Film Co. (xinhuamian yingye), Poly Bona, and other major private film companies in China have been established in Beijing. Films produced or co-produced by them show up at the top of the national box office takings. Of the seven private film distribution companies certified in 2003 by SARFT to distribute films, four were in Beijing. According to Gao Ping‘s calculations in relation to China‘s film distribution companies (Gao, 2008), the distribution sector of China‘s film industry is dominated by distribution companies in Beijing. As figure 13 demonstrates, among the ten largest film distribution companies, CFGC and Huaxia Film Distribution Company, which are the only two state-owned film distribution companies, are in Beijing. They occupy nearly 60% of the market share. The other eight companies are privately owned; five of them are based in Beijing, and one is controlled by Huayi Brothers in Beijing. Many private capital and foreign companies are attracted to Beijing by its strong power base in terms of production and distribution. Columbia Pictures chooses Huayi Brothers as its partner in China. Most Hong Kong directors set up their own studios and live in Beijing now. Hong Kong director Peter Ho-Sun Chan (Chen Kexin) sees Beijing as the lifeline of China‘s film industry and believes it will become the centre of Chinese film (Pan, 2008).

Figure 13: Ten biggest film distribution companies in China

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CFGC (Beijing) Huaxia (Beijing)

Poly Bona (Beijing) Ciwen Film & TV (Beijing)

Xiying Huayi (Xi'an, controlled by Huayi Brother) Shanghai Huayu

Shanghai Dongfang Xingmei Distribution (Beijing)

Xinhua Zhanwang (Beijing) Beijing New Picture

3.17% 2.16% 2.45% 2.16% 3.45% 3.99% 34.53% 6.00%

18.20% 23.89%

The primary reason for China‘s film industry clustering in Beijing is its reputation. When Hong Kong director Andrew Wai-Keung Law (Liu Weiqiang) is asked why he came to Beijing, he replies: ‗Where else we should go if not Beijing‘ (L. Zhang, Jian, & Li, 2011). The strong production power of Beijing in the film industry pulls in more film business; more business opportunities can be found there. Combined with its strong TV production capacity, Beijing‘s film industry has more resources than elsewhere in China. In addition, being in Beijing offers the closest access to the city‘s abundant media outlets. As Guan Yadi, who used to work for Yu Dong, CEO of Poly Bona, and is now an independent producer, maintains, Beijing‘s TV stations, CCTV, BTV, Phoenix TV, Travel Channel (lvyou weishi) and Movie Satellite Channel, and its strong distribution capacities, help film companies to promote and sell their film across borders. (Interview with Guan Yadi, 2009) A final, but important reason is government support. Because of the central government‘s support, CFGC has been able to expand widely and compete in the national film market quickly. The Beijing Municipal Government spares no effort to support the film industry. It provides loans to film companies through the Bank of Beijing. 126

5.1.3 Different routes, same destination

As discussed earlier in Chapter 3, Beijing has been the national centre ever since China began to develop the TV sector in 1958. As the national flagship, CCTV plays a key role in China‘s TV industry. TV companies are dependent on CCTV because it offers the widest range of channels in China. However the competition between provincial TV stations and CCTV intensified as the government loosened its restrictions and encouraged competition. CCTV gradually lost its superiority (although it still enjoys certain protection from SARFT).

Provincial TV stations are also vying for audiences. As the CEO of Enlight Media, Wang Changtian, observes: ‗It used to be believed that channel was the king in the TV industry in China (qudao weiwang), but now it is the era of content (neirong weiwang)‘ (T. Zhang & Xu, 2009). Along with the separation of production from broadcasting, it now looks as if Beijing‘s advantage, which has been gained because of CCTV, will be eroded by provincial TV stations and private TV companies.

China‘s film industry is a different story. It was evenly scattered in several provinces and cities due to the government‘s equal distribution thinking in the planned economy. But business hardship engendered the central government‘s push for reform. Beijing was chosen as the ideal place to develop the film industry, as the central government was able to supervise while ‗liberalising‘. As a result, Beijing‘s film industry grew quickly following several adjustments and mergers organised by the central government. The choice of coming to Beijing was heavily influenced by these developments: Dalian Wanda Commercial

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Properties Co., Ltd. established Wanda Beijing Wanda Circuit Company Ltd., now China‘s most successful cinema company; and Hunan Dianguang Media Co., Ltd., which belongs to Hunan Media Corporation with Hunan Satellite TV, invested 47.5 million RMB to establish its own film company in Beijing, TIK Films, in 2010 (www.cfi.cn, 2010).

Despite different development tendencies presented in the TV and film industries, they share a common dynamic, which is government. The government‘s determination and concerns run through the whole process of accumulation. The Chinese government coordinates the industry resources throughout the country, regulates the media market competition and directs industry consolidation in Beijing by making government investment and policies. However, reform now extends towards welcoming competition, loosening controls and easing the environment while protecting the national interest.

Under these circumstances, we should consider how long the dynamic of media industries consolidation in Beijing can be sustained. What are Beijing‘s ‗favourable untraded interdependencies‘ or ‗positive locational externalities‘ (Scott, 2002, p. 166)? I will discuss these questions in Chapter 6 through the second and the third principles of media capital, trajectories of creative migration and socio-cultural variation.

5.2 Curtin 2: trajectories of Beijing’s creative migration

As Curtin maintains, during the pre-modern era in liberal democratic societies, creative migration was driven by patronage relations rather than market force (Curtin, 2007, p. 14). The same argument can be applied to China, although the centrality of politics was more obvious. Beijing‘s status as China‘s political

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centre contributed greatly to the emergence of a media workforce in Beijing. After 1949, China‘s political centre was again shifted to Beijing. The ‗new China‘ spirit represented by Beijing appealed to many Chinese artists and writers. They moved to Beijing to be closely involved in the new Chinese culture of socialism. Beijing gradually re-established its status as China‘s cultural centre.

As many authors have shown, from 1950s to the end of the Cultural Revolution, the cultural sector was deemed as to be just a ‗cog in the wheel‘ of the propaganda machine; the media was the key player, and media workers were regarded along with teachers and intellectuals as ‗engineers of the soul‘. In the 1950s the Chinese government moved to establish and strengthen media and cultural institutions to maintain ideological control over society. Scholars, artists, and writers were invited and recruited from around the country to build up the Beijing Film Academy (BFA) and the Central Academy of Drama (CAD), China‘s two most prestigious institutions specialising in film and performance, as well as the Beijing Broadcasting Institute (BBI, restructured into Communication University of China in 2004, CUC). Accordingly, many artists and writers moved to Beijing to be engaged in film education. Allen Scott has shown how educational institutions coordinate local social networks and enhance Hollywood‘s competitive advantage by providing educational and training opportunities (Scott, 2005, pp. 130-132).

The significance of universities and educational institutions is even more obvious in Beijing. Firstly, due to the presences of universities, Beijing became the cradle of the TV and film industry. This in turn formed a strong alumni network. Before the reforms of the 1980s, the state was responsible for distributing university graduates to different working units around the country; that is, students had little or no freedom to choose where they wanted to work.

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Most of the top graduates from the aforementioned three institutions were assigned to work in media organisations in Beijing due to the government‘s agenda of developing the city into the cultural centre. Progressively, the talent accumulation, generated by education organisations and led by government, greatly assisted the development of media industries in Beijing.

As the economic reforms changed the social structure, people were increasingly able to flow freely from job to job, from place to place; the role of the government employment assignment system receded. Over the past decade creative human capital has migrated to Beijing for new reasons:

5.2.1 Education institutions

Educational institutions still play a key role. Following decades of development, BFA, CAD and CUC have reared most media professionals in China. For example, the fifth generation of directors all graduated from Beijing Film Academy, and the most internationally recognised Chinese actors and actress, Gong Li, Jiang Wen, and Zhang Ziyi studied performance at the Central Academy of Drama. Most staff at CCTV and provincial TV stations graduated from CUC. Accordingly, many aspirants come to Beijing and attend the entry interview for these universities because they believe that entry to these institutions is a precondition for a successful career in the media industries. Guan Yadi, who used to work in Poly Bona and now is an independent film producer, recalled:

When I was little, I always wanted to work in the film industry because I

loved film so much. Then I started watching various films and reading any

reports related to film. One thing that struck me was that nearly every great

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director and actor/actress studied at Beijing Film Academy. Therefore I

applied for BFA when I finished high school and was lucky to be accepted.

(Interview with Guan Yadi, 2009)

Xu Gang (Interview with Xu Gang, 2009) and Li Yan (Interview with Li Yan, 2009) concurred with this view and described it as ‗a simple and natural reaction‘ to apply to BFA to pursue their film dream after high school. Employers hire graduates from BFA, CAD and CUC out of confidence in these institutions‘ quality of education. Wang Qiang, who is a CUC graduate and cofounded his media, animation and advertising company with his friends in 2007, maintains that he only recruits graduates from BFA, CUC, and several other reputable universities in Beijing (Interview with Wang Qiang, 2009). Directors will often go to these universities when organising production teams for new projects. Students in these universities are ‗readymade‘ for China‘s films and TV industries. Another important factor is that directors and producers are bonded to these universities by their alumni relationships. As the bond connecting most Chinese media professionals, BFA, CAD and CUC are the most important entry points for aspirants seeking to enter into media careers. Li Yan quit school very early and tried several jobs, even playing rock music. Later on, his interest shifted to media but he didn‘t know how to start. He said:

I didn‘t have any friend working in the media. No one in my family ever

worked in this area before. I didn‘t know how I could find a job in media

industries and who I could go to. Then I thought maybe I should go to BFA

or CAD to learn how to make films and during my study there, find the way

to get myself into the industry, as they have strong alumni networks.

(Interview with Li Yan, 2009)

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5.2.2 Career opportunities

Another reason driving creative migration to Beijing is strong local networks. Creative industries, by definition, entail highly flexible, open-ended and project-oriented production systems. Along with the accumulation of media in Beijing, more and more job opportunities are generated. This means there are more opportunities for subcontractors and freelance workers, with employment secured by being close to the largest pool of employment opportunities, according to economic geographers (Christopherson & Storper, 1989). According to Wang Qiang, a native of Sichuan Province:

People must come to Beijing because all the media companies, especially

the big ones are in Beijing... what every Chinese media worker really needs

is a chance to realize his or her personal value… but you won‘t be able to

work on one TV program or film if working in a small company…

Wang Qiang started his first company with friends while studying at CUC, although the company went bankrupt due to financial difficulties. He chose to stay in Beijing after graduation because of his networks and subsequently opened his second company with friends in the TV, animation and advertising business. He believes that being in Beijing, he is exposed to more companies and organisations that he regards as potential clients. Now his clients include CCTV, BTV, Heilongjiang TV, KAKU animation channel, CBN (the business channel of Dragon TV) and China Education TV. He stressed: ‗The biggest advantage of Beijing is its big market, abundant opportunities and rich client recourses... Beijing is so big and I am so small…‘ (Interview with Wang Qiang, 2009)

Zhou Hao used to work in a provincial TV station in Shandong Province and made some contacts in Beijing as his work involved frequent business trips there.

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His talent and work ability were acknowledged by his contacts, and one of them invited him to Beijing to work on a film. He said:

After I came to Beijing, I fell in love with this job slowly but steadily. My

intention was to help my friend. But it becomes my own business now.‖ He

added: ―The bigger a company is, the more constant its staff turnover is.

However the chief personnel in the production team won‘t change much.

We can‘t just work with someone in the market. We always collaborate

with friends as we trust their capacity and moral qualities.

(Interview with Zhou Hao, 2009)

The issue of opportunities was a common theme in my discussions. Shaun Chang, a Taiwanese TV producer based in Beijing, recalled that her Taiwanese friends first established their media companies in Shanghai but had to move to Beijing later on ‗because they could find no opportunities there‘. (Interview with Shaun Chang, 2009)

5.2.3 Initiated by the capital status

Aside from the obvious business benefits, Beijing‘s capital status lures people into its ‗orbit‘. Beijing is the political centre of China and thus the place where news, especially breaking news, occurs frequently. Therefore, every TV station has a Beijing office, not only to be close to breaking political news but also to access entertainment news. Dai Lü from Taiwan‘s Zhongtian TV Station explained:

As a Taiwanese TV station, we are of course very interested in China‘s

political news. That‘s why I work in Beijing as it‘s the political centre.

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Similarly, we set up our US office in Washington because we want to get

the first hand news about USA. But as I am already in Beijing, I often also

report on local entertainment news report and commercial activities.

(Interview with Dai Lü, 2009)

The capital culture of Beijing has an all-embracing spirit (jianrong bingbao). As mentioned above, diverse ‗creative cultures‘ exist in Beijing, and this ethos, while not Western pluralism, is attractive for media workers seeking inspiration and connections. Wang Binbin, a TV producer at CCTV-2 said: ‗I am from Jiangsu Province in the southern part of China, but I love the culture represented by Beijing, which is so different from my hometown. It‘s so dignified and has grandeur.‘ (Interview with Wang Binbin, 2009)

In addition, Beijing, as the power centre, symbolises the country‘s image, and this has a strong cultural influence on every Chinese. Numerous cultural events are held in Beijing every year. According to Ouyang Guozhong, the former producer of Hunan Satellite TV and CCTV, Chinese audiences are more interested in Beijing stories because of its dominance in Chinese culture (G. Ouyang, 2003, p. 8). Zhou Hao believes that Beijing‘s cultural influence is one important reason why he is based in Beijing. He said: ‗The publicity effect is much better for any campaign activity.‘ (Interview with Zhou Hao, 2009) In spite of the advent of popular satellite channels in the late 1990s, CCTV is the only network that reaches the whole market. CCTV pioneered the concept of annual contests, such as The National Youth Singer Contest, aimed at identifying cultural and artistic talent. CCTV‘s Chinese New Year Gala has been the most watched TV program in China since it began in 1983.

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Yang Li, a TV producer working in Beijing Somebody International Media, was born in Xinjiang and had her college education in North-western Shaanxi Province. She recalled:

I think I have a special affinity to Beijing. When I was a little girl, I always

wondered why I lived in Xinjiang instead of Beijing. At that time I watched

CCTV all the time… Children in Beijing were able to perform at the

opening ceremony of the Asian Games but I couldn‘t. They sang and

danced on TV shows but I couldn‘t… Therefore Beijing to me is the centre

of everything… As I watched so many programs about Beijing, I feel

connected to Beijing Though I am not a Beijing native, I always feel so

familiar with the city.

(Interview with Yang Li, 2009)

5.2.4 The mutual learning effect in media migration

As I have described, media human capital is absorbed into Beijing, but the questions remains: how do people go about learning about media in Beijing? According to Curtin, modern media production is reliant on mutual learning effects occurring between people who congregate and co-work in certain locales as well as the industry‘s ability to maintain its infrastructure for organisational learning while adapting to quickly changing circumstances (Curtin, 2007, p. 18). By working and living together, new knowledge is created, and existing knowledge is transferred and spread among media workers in both tacit and explicit ways. Therefore, a locally based community of media workers evolves into an active hub of information exchange and knowledge production. Accordingly, it is necessary to examine how the mutual learning effects are

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engendered in the local community and how these effects sustain the migration tendency.

Institutions such as BFA, CUC and CAD are one major type of locus for knowledge transfer. Students study media knowledge in coursework, but more importantly, they learn tacit knowledge. BFA, CAD and CUC have very strong relationships with the media industries. Many professors from these universities also work in the industry— For instance, Huang Lei, a famous Chinese actor, also works as a fulltime professor in BFA— so their students can easily and quickly participate in the industry by means of internship or part-time work. When Lu Jia was explaining how he started his business, he recalled:

When I was studying in the Beijing Film Academy, my teacher introduced

a temporary work in CCTV to me. Of course CCTV was quite satisfied

with my job as I had good training in school. Since then I gradually built up

a quite stable relation with CCTV and now CCTV is one of my major

clients.

(Interview with Lu Jia, 2009)

Even after graduation, media talents still keep in constant contact with their old schools to acquire new knowledge. Wang Qiang explained:

CUC still offers me a lot of assistance for my business. I can obtain

information on the latest international trends from my former teachers.

They give me very useful advice and even use their own networks to

facilitate my business.

(Interview with Wang Qiang, 2009)

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However, studying at universities is still a one-way behaviour. Most mutual learning effects actually happen during everyday work processes. Yang Li studied finance and accounting and gained all her media knowledge and skills through practical experience in the media industry. According to her, she absorbs new knowledge by working with different people from a wide range of backgrounds, and after working on several jobs in CCTV, BTV and private TV production companies, she is now a successful producer. ‗Whenever I encounter any difficulty, I always talk to my old colleagues and learn from their experience,‘ she says. But she maintains that her career development has been accelerated as a result of the opportunities and challenges presented by the rapid growth of the media industries in Beijing. Or, in other words, that the mutual learning process is accelerated by the rapid expansion of China‘s media industries. She illustrated her point by using her new job as an example.

I was just a field director, and I thought this job was the same as my old

ones. However, my friend who founded this company told me recently that

he wanted me to be a producer in charge of developing a new program for a

provincial TV station because he was short of personnel due to the rapid

development of his business. I was a bit scared by his offer at first, but had

to adjust myself to the new job as soon as possible. This is a clear example

of being forced by circumstances to learn and adapt.

(Interview with Yang Li, 2009)

Yang Li was introduced to nearly every new job by old friends through networks developed during previous work. She says that she learns diversified production concepts and ideas via collaboration with media workers from different organisations and institutions.

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Likewise, Zhou Hao explained that all his investors and partners were introduced by friends, and he identified new ideas and opportunities through them. He believes his social networks are very important to his work, as they have various resources and knowledge. (Interview with Zhou Hao, 2009) An expansive network brings in job opportunities as well as learning opportunities, according to Wang Qiang:

We are good friends in life and competitors in work. I don‘t think they are

contradictory to each other. At least, I am doing pretty well. We help each

other by giving useful suggestions. Moreover, there are plenty of job

opportunities in Beijing, and hence we share information rather than hiding

from each other, because in this big market, there are always some things

that they are good at and something that I am good at. More importantly,

their work inspires me in two ways. On the one hand, I learn new

technology by communicating with them and develop my own production

format inspired by their work; on the other, their development puts

psychological pressure on me, so that I always push myself to do better in

order to catch up with them.

(Interview with Wang Qiang, 2009)

The deepening of media reform has broadened channels for information flow. More parties are brought into mutual learning processes in Beijing. Yang Li described her old job in CCTV as ‗a passive way of accepting her boss‘s instructions‘. She had no chance to express her thoughts to the boss (lingdao). But now, as a producer in a private TV production company, she is able to talk to CCTV when she produces programs for them. In this way, CCTV and she understand each other better and learn from each other. She says that state-owned TV stations realise that they have to adjust themselves in order to

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deal with the severe competition that accompanies the reform. They need private companies‘ help to be competitive.

Thus, from the above it is clear that the migration tendency in Beijing is engendered and sustained by multiple factors. In Beijing, the university experience is not dominated by pedagogy, as might have been the case two decades ago. Institutions such as BFA, CAD and CUC are locales where informal study occurs and information intersects. Outside the university locale, media workers spread knowledge spontaneously and consciously while they work and live collectively; accordingly new job opportunities emerge. The rapidly developing industry and competition are catalysts accelerating the speed and scale of creative migration. In the mean time, the creative migration drives the industry‘s accumulation in a given place, thereby enhancing its attractiveness to potential migrants. Then new media workers come to the place in search of work and peers. Therefore an open-ended growth spiral is formed in Beijing, in which the centripetal logic of production is married to the centripetal trajectories of creative migration, as Curtin argues (2007, p. 18). Moreover, according to Guan Yadi, for most media workers in China, the city of Beijing itself is endowed with a symbolic value that makes it ‗just the right place for media workers to go to‘. (Interview with Guan Yadi, 2009)

5.3 Curtin 3: Beijing’s socio-cultural variation

5.3.1 Schizophrenic Beijing

Senior media executives often say that ‗Media is a people business‘ (Aris & Bughin, 2005, p. 373). Allen Scott writes that ‗without labour, the production system is nothing but an empty shell‘ (Scott, 2005, p. 9). In fact, it is not only

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Hollywood‘s production processes that have evolved to maximise its efficiency and reach and thus its global dominance; its success also depends on its labour pool and the availability of an immense diversity of skills. This is a similar story to Silicon Valley‘s. Along with skills, we find a great deal of tolerance for ‗thinking out of the box‘, for incubating new ideas, and for creative experimentation. While the agglomeration of media industries in Beijing (logics of accumulation) has attracted a pool of media talent (trajectories of creative migration), the question remains: does this lead to socio-cultural variation in media output (forces of socio-cultural variations)? In order to answer this question we need to look deeper into the roots of Beijing‘s culture.

As discussed in previous chapters, Beijing is the media centre of China. As the national capital, it has political, cultural and economic power. It has been the capital since the Yuan Dynasty in the 13th century (although China‘s political centre was moved to Nanjing in Jiangsu Province during the Kuomintang‘s brief regime in the 20th century). Now Beijing is home to national regulatory agencies such as SARFT and Ministry of Culture (MoC), which impact on the culture and audio-visual sectors. As this thesis argues, if you want to know how the media system functions in China, there is no better place to investigate than Beijing.

For many outside China, the symbol of Beijing is Tiananmen Square. From one perspective Beijing is conservative. It is symbolic of China‘s conservative political ideology; it houses opulent palaces and temples; its huge stone walls and gates present an image of stability. Paradoxically, Beijing is also the hotbed of China‘s modern culture. It is symbolic of a rebellious spirit. Historically, Beijing is the origin of the New Culture Movement (xin wenhua yundong) and the May Fourth Movement (wusi yundong) in the mid 1910s and early 1920s, respectively, both of which led a revolt against Confucian culture, calling for the

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creation of a new Chinese culture based on global and western standards, especially democracy and science.

In modern times, Beijing‘s cultural groups have shown resistance to power. Beijing‘s so-called rural urban syndicates (chengxiang jiehebu), are groups of contemporary artists who represent the ‗cynical realism‘ movement, a school that mocks China‘s political and social realities; in Beijing‘s cafés and bars one finds independent rock bands expressing their angst about government and social conditions. In the late 1980s and early 1990s Beijing was the centre of the hooligan literature movement, best represented by Wang Shuo, a writer who symbolised the people of Beijing‘s suspicion of authority.

Beijing‘s intellectual culture includes a significant part of its so-called elites. As a privileged stratum, they have long been exposed to the world via media and by reading literature not accessible to the common people. With personal experience of the political system and material wealth inherited from their families, they have had the luxury of making culture, a situation reminiscent of the period after 1911 leading to the New Culture Movement when court intellectuals were released from their responsibility. For instance, Wang Shuo grew up in a military family in Beijing; his work was made into several successful TV dramas and films in China. According to Tom Wang, CEO of Beidong Media, compared with Shanghai or Guangzhou, which may have better performance in economic development, ‗Beijing has inherited an atmosphere of culture ever since the Ming Dynasty and people living in Beijing want to speak out instead of earning money‘. (Interview with Tom Wang, 2009) Xu Gang, deputy director of distribution of August First Film Studio (bayi dianying zhipian chang) commented: ‗It‘s so different in Beijing. Here even a taxi driver criticises current political affairs and makes jokes of the central leaders; but in

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Shanghai, people are busy making money and have no time to discuss or even think about other things.‘ (Interview with Xu Gang, 2009)

The schizophrenic character of Beijing is evident in its population mix and its tolerance of diversity. Chan Koonchung (Chen Guanzhong), a well-known Hong Kong writer and the founder of Hong Kong Film Directors‘ Guild, says that Beijing‘s tolerance attracts and accommodates people from various backgrounds. Beijing ‗… guards the torch of avant-garde culture unceasingly; generations of young people come to Beijing to pursue their dream and wait to see the daybreak‘ (Chen, 2004, p. 55). In terms of its creative industries, Beijing‘s inclusiveness provides a field for creative talents to ‗muddle along‘ (hun), or, in other words, to drift between different sectors, between arts and commerce, to pursue their dream while earning money. In contrast to stereotypes of Beijing as a closed political city, there are numerous spaces for creative experiments and scenes, including avant-garde culture, performance artists and literary movements.

One of my interviewees, Luo Xuan, co-founder of Beijing BMC Co. Ltd., a company providing animation, digital effect and advertising services for CCTV and other commercial clients, confirms Chan‘s observation. He said:

Beijing is just like New York, where anyone can find his or her own space.

Shanghai may look more westernized which makes people believe it‘s more

diversified. But on the contrary, you can only be a Shanghai person in

Shanghai; but you can be yourself very comfortably in Beijing because

people here are so used to heterogeneity. That‘s why young Chinese are

more likely to come to Beijing.

(Interview with Luo Xuan, 2009)

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Chen Danqing, a Chinese artist and critic born in Shanghai, who lived in New York for 18 years before settling in Beijing, also expressed his preference for Beijing. He said: ‗Today‘s Shanghai is boring… people with restless mind have moved to Beijing.‘ (Chen, 2008)

Beijing has a large concentration of museums and galleries. Cultural events ranging from classical music concerts to indie film salons are regularly held in Beijing. These events not only generate job opportunities for media workers, but also foster a mixed cultural atmosphere, one that values playfulness and artistry. The special cultural atmosphere in Beijing in turn nurtures audiences who seek out fun and meaningful media products.

5.3.2 Struggling international conglomerates

Among the different parties in the media production system in China, international media conglomerates are the outsiders. Although Beijing has large clusters of domestic media organisations and is the most attractive site for foreign media companies, the city remains mysterious to non-local market players for many reasons, including the difficulty of ‗reading the winds‘ of media policy and a hybrid culture made up of a conservative historical tradition and international pop culture. Their business ‗know how‘ and experience derive from activities in a pluralist media environment. In China, policies can be initiated and quickly changed by the instructions of central leaders; these people exert great power on the media industry. The discretion of executive divisions cannot be ignored either (Curtin, 2005). The main obstacle is censorship, which can be complicated and bewildering. Under the current regime, the foremost principle for any international media corporation to survive in China is to show friendly intentions and nurture a good relationship with the Chinese government.

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It takes a long time for a foreign company to win trust from the government. Only well-funded foreign media corporations can afford to wait; as they cannot directly produce content for broadcast, they will often establish covert and ‗under the radar‘ joint ventures with Chinese media organisations and state-owned TV stations in particular. News Corporation‘s FOX Network, a highly resourced entity, had to provide platforms for CCTV-9 to broadcast in the US to gain approval for its entertainment channel (xingkong weishi) in Guangdong Province. This may entail registering under a different kind of production license. However, this places overseas media companies, especially those of comparatively smaller scale and lesser resources, at a disadvantage, since their negotiating partners are very clear about their situation. Dai Lü described the Chinese partner as ‗arrogant sometimes‘ and said that it‘s hard for non-local media companies to enter into dialogue with local media organisations, especially state-owned TV stations, on an equal basis. Media giants from outside China don‘t necessarily win the upper hand all the time. In fact, while they are depicted as ‗the wolves from the West‘ by Chinese academics (as cited in Zhao, 2008), the reality is that in China they often resemble sheep in need of protection.

Nevertheless, dealing with government control is not the only issue for international media firms to solve. Another difficulty is content localisation. In a recent report, David Wolf, CEO of Wolf Group Asia, criticises the assumption that Chinese consumers will accept any Western media product. He argues that Chinese audiences want media content about themselves and that the desire for foreign cultural products is declining (Nicholson, 2009). In addition to this, Chinese people‘s wary attitude towards representatives of foreign media is produced by the government censorship and face-saving concerns. Janek Zdzarski, a Polish TV reporter and producer recalled:

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One day I had a very interesting chat with the elevator operator when I was in the elevator. She complained a lot to me about her work and life. Then I decided to shoot a documentary of her and she agreed. But she started saying how grateful she is to the government and how happy she is with her job and work when I brought my casting crew over to her place and started shooting. I think her boss must have talked to her and she didn‘t want to embarrass her homeland in front of foreigners. (Interview with Janek Zdzarski, 2009)

5.3.3 Confident domestic players

Many scholars have discussed reforms in the media sector in China and the transformation from media institution (shiye) to media companies (qiye) (Donald & Keane, 2002; Fung, 2009; Zhao, 2003). While much change has occurred, there is still a big gap between Chinese practices and international ‗best practice‘. In short, local practices contradict international models depending on the circumstances. State-owned media organisations such as TV stations and film studios are mostly financially independent from government, but are still shielded by government in other ways. Hence they are relatively confident in their competitive capacity. Tang Haifei, a TV producer at China International Television Corporation, explained that the reason for the popularity of Korean TV dramas in China12 is that ‗Chinese audiences haven‘t watched high-quality TV drama before‘. According to him, China‘s capacity to produce

12 Since 2005, Korean TV dramas have been extensively purchased by Chinese TV stations; although they are broadcast over and over again, audience ratings remain high.

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quality TV has improved a lot due to government support with funding, personnel, and policy. (Interview with Tang Haifei, 2009)

Their confidence is not misplaced. Locally produced media products are preferred by audiences in the same ‗geo-linguistic region‘ (Bielby & Harrington, 2002). Cultural proximity reflects not only the language, but also the music, costume, and humour. Viewers seek the pleasure of recognising their own culture in TV programs (Sinclair, et al., 1996). The failure of Desperate Housewives in China illustrates the significance of building up the connection to Chinese audiences. Domestic media companies are very well aware of their edge in understanding local audience tastes and the importance of cultural proximity in the Chinese media market. Tang Haifei stressed: ‗Who can understand our audience‘s needs better than us Chinese?‘ (Interview Tang Haifei, 2009) The state-owned media organisations are also pushed by competition to gradually get rid of their old ways of thinking about relationships (guanxi). Wang Binbin gave a vivid example to demonstrate this change:

We used to work with an advertising company that has some relationship

with our boss. But it turned out that their work is not good at all. Then we

just stopped our contract with it and found a better agency in the market.

Our boss didn‘t reject our action because the audience rating is our first

concern.

(Interview with Wang Binbin, 2009)

Moreover, there is significant change in media workers‘ attitudes. People working in state-owned TV stations or film studios used to be regarded as ‗doing labour for the Communist Party‘ (Zhao, 2008, p. 46), seeking a stable job and better welfare than average people, or working to gain a higher position in the bureaucratic hierarchy. Much has changed. The advent of the creative

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industries has brought with it a discourse of precarious labour: it has been argued that media workers are now exploited by post-Fordism and short term work contracts (Hesmondhalgh, 2007). Yet this sense of precariousness has yet to translate into China where there is a palpable sense of liberation from the past, where cultural workers were heavily tied to prescriptive work unit practices and used to generate propaganda campaigns and where work permits were not negotiable.

Like creative workers elsewhere, work is no longer just a means of making a living, but a way of living (Leadbeater & Oakley, 1999). They seek knowledge, personal development, individual value and fun in their work, which is especially true of media workers in Beijing. Yang Li said:

Work is a part of my life… I want to absorb knowledge, which is the

biggest source of my feeling of self-worth, and therefore I am always

looking for new opportunities. And I am not the only one having the same

idea in China.

(Interview with Yang Li, 2009)

Furthermore, Chinese media workers have started rebuilding their integrity and self-esteem after decades of suppression. To them, in addition to their own interest, they are ‗proud of their job‘, and think it‘s their ‗obligation to ignite China‘s media industry‘13. Carrying this new professional attitude, media workers find ways to bypass the state‘s control and include their daring ideas in the media content subtly. One of the bestselling films of 2010, Let the Bullets

13 This observation is based on the data I collected during my fieldwork in Beijing in late

2009.

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Fly (rang zidan fei), directed by Jiang Wen, which largely satirises the dark side of the society in contemporary China by setting the story during the warlord period of the 1920s, was co-produced and distributed by China Film Group, the biggest state-owned film company in China.

The question of political control remains paradoxical and raises the question of how people in the industry in Beijing understand pluralism. It is clear that their responses indicate that the situation is better, but far from perfect. It is also clear that avoiding politics is the concession that they are willing to make. One example is that ‗hard news stories‘ are avoided or left to CCTV; independent private companies pursue other strategies: this may include embedding political messages in entertainment programming, such as Jiang Wen‘s production mentioned above. Some of my interviewees said they are not afraid of government control or they don‘t even feel any control since they are always running ahead of the government. They make good use of the autonomy generated by commercial reforms and believe that their influence is strong enough to make the government change. Furthermore, they believe that their presence in Beijing may be advantageous to further reform. When describing their relationship to the government, Peng Yang, CEO of Kuaile de Gou, the Beijing office of Kuailegou, a TV shopping channel of Hunan Satellite TV station, said: ‗In fact, our innovative practice and successful results significantly illustrate the necessity and feasibility of reform, and accordingly help us to negotiate with the government and win greater freedom and support‘. (Interview with Peng Yang, 2009) Therefore, to them, Beijing is certainly the ideal place for work, as this is the place where their ‗boss‘ (laoban) works.

Qian Chongyuan, head of distribution of Beijing Forbidden City Film Company (beijing zijincheng yingye) explained the logic behind this argument:

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It‘s good to be close to the government. Firstly, you are able to understand

the policy at first hand and communicate with the government when you are

confused. However, you may have difficulties in understanding the

government‘s intention, or resist to understand the policy because of your

misunderstanding, if you are in other cities. In fact you can talk to the

government officials face to face in Beijing, and your communication with

the government and your feedback is appreciated by the government and

impacts on their future decisions. In this way your desired changes will

happen sooner or later. Secondly, your constant contact with the

government helps you to build up a sort of friendship with officials, which

would facilitate your business to a great extent, as policies in China are not

always so clear. For example, if we make a film involving sensitive topics

such as street girls, who are an inevitable social issue in contemporary

society, whether we are allowed to bypass the censorship restrictions is at

the discretion of the officials.. We can explain our purpose to the official in

charge, and it is easier to persuade them if you have a good relationship

with them. But if you are not that close to them, they can be very strict on

your production and order you to take this topic out of your film, which

would negate the purpose of the story.

(Interview with Qian Chongyuan, 2009)

The case of Beijing Forbidden City Film Company supports his logic. Its film, The Dream Factory (jiafang yifang) was almost vetoed by the Beijing Municipal Government just prior to the news conference announcing the start of shooting (Zeng, 2009). But the company managed to convince the government officials quickly and subsequently had a big success in the film market. In this regard media practitioners in Beijing have an advantage in gaining access to the ear of government.

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The private sector is pragmatic, preferring to avoid talk about ideology or national spirit. For many, international conglomerate penetration into the Chinese media market is about occupying market share and profit. It follows a similar logic to the Chinese government, which seeks to protect and stimulate domestic media production. But for private media companies, most regard international media companies as their role model; they believe that learning from international media companies benefits their own business, in particular in creativity and management. They don‘t appear to be frightened by competition. On the contrary, they see it as ‗a good opportunity to enhance themselves by struggling while learning‘, according to Li Haibin, an independent film producer who often collaborate with Western film companies. (Interview with Li Haibin, 2009) Guan Yadi maintained that in China the key to doing media business is networking and non-Chinese media companies need local companies‘ assistance to achieve their business goals. (Interview with Guan Yadi, 2009) Thus, local media companies are sure of their own knowledge, although they do acknowledge international media firms‘ advanced capacities and abundant experience.

5.3.4 Regulatory backflips

The problem of socio-cultural variations is best illustrated by attempts to produce diverse content that appeals to more than one market. In Curtin‘s account, successful media capitals have been able to export their stories and formats. By 2003, the present secretary of the Municipal Committee of the CCP of Beijing, Liu Qi, clarified the objective for Beijing to become the national distribution centre for journalism, and the national production and trading centre for film and TV, and to take its place in the international media market (Y. Sun & Xu, 2003). The goal of being the locus of major national cultural, journalism,

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publication, film and television organisations was also clearly written into the Overall Urban Planning of Beijing (2004-2020).14 Beijing‘s Eleventh Five-year Plan stated that Beijing would be a production and trading centre for film and TV programs.15 As far as the central government is concerned, its ambitions for the media industries are not limited to the inward-looking development previously exhibited by China‘s media industries.

Influenced by the concept of soft power (Nye, 2005; J. Zhang, 2009), the Chinese government has charged the Chinese media sector with the role of improving its international image. Soft power has emerged as a ‗wild card‘ in China‘s media reforms. The term means many things, but essentially, in regard to media exports it signifies an awareness of markets beyond the Mainland. In this sense, soft power is the fundamental basis of socio-cultural variation. Early in 2010, Zhu Hong, Spokesman of State Administration of Radio, Film and TV, stressed that using the opportunity of the global financial crisis, top-ranking international media companies should be constructed quickly to improve China‘s international media influence and enhance its competitive capacity (H. Zhu, 2010). Consequently, the Chinese government has started to look at the international market, build up new channels and promote its media product overseas. With so many powerful institutions in Beijing, it is predictable that the Beijing municipal government will promote the development of media industries more strongly in response to the central government‘s internationalisation strategy.

14 It can be retrieved at: http://zhengwu.beijing.gov.cn/ghxx/ztgh/

15 More information can be found at: http://zhengwu.beijing.gov.cn/ghxx/sywgh/t833176.htm

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However, in spite of its dedication to reform of its cultural and media sectors, there are forbidden zones that remain blurry to market players, especially non-Chinese players. This blurriness is described as ‗structured uncertainty‘ (Breznitz & Murphree, 2011). In other words, there is a degree of uncertainty built in to policy making which is linked to informal knowledge of the rules of engagement and the borders of expression. Once these informal rules are infringed, the government adopts strict measures to punish the violator and safeguard its authority. Many interviewees gave the same example to demonstrate the sweeping effect of the Chinese government‘s policies. Criminal themes were extremely popular with viewers in TV drama serials in China before 2005 (Y. Zhu, Keane, & Bai, 2008). Many TV production companies invested heavily in crime drama. Unexpectedly, SARFT produced a ruling that criminal series were forbidden to be shown at prime time on TV stations, apparently because some government officials were enraged by the heroic narratives of criminal offenders in this type of TV dramas, which were deemed as ‗unacceptable‘ to the government. Due to the huge value difference in different broadcasting timeslots, many TV production institutions and companies were not able to earn enough profit to cover their costs and were forced to close down.

Similar policies impacted on period costume dramas in 2007 and spy dramas in 2011. The government‘s attitude and its reactions are ‗unpredictable‘, according to Zhou Hao. (Interview with Zhou Hao, 2009) As a result, media companies need to communicate with government officials regularly to learn what the government‘s concerns are, to update their understanding of policies and to adjust their strategies and find a way to reduce risk. State-owned media organisations, especially those directly under the central government, such as CCTV and China Film Group, enjoy an advantage in reading the political winds because of their close relationship to the central government. According to Tang

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Haifei, they have regular meetings every week conveying the government‘s recent instructions and briefing on officials‘ discussions. (Interview with Tang Haifei, 2009)

However, the Chinese government is not always as rigid as its stereotypical image might suggest. It welcomes competition in the media industry and anticipates economic success. As in the manufacturing industries, the government is always there to assist—or to make life difficult—depending on circumstances. Once the government‘s endorsement is won, things will be sorted out very quickly. Kai-Fu Lee, the former President of Microsoft Research Asia and former CEO of Google China, believes that a company regarded as a partner by the government will get favourable treatment, including detailed legal instructions and friendly advice regarding business operations, whereas a company considered unfriendly will encounter difficulties (K.-F. Lee & Fan, 2009). When the Beijing TV Art Centre was preparing for A Native of Beijing in New York (beijingren zai niuyue), they sought to apply for a loan of 10 million RMB, because traditional media investors were reluctant to invest substantial money in risky TV production at that time. The loan application wasn‘t approved because there was no precedent. Zheng Xiaolong and Feng Xiaogang, co-producers of the drama, then wrote a letter to the central government asking for help in the name of developing the market economy. They were fortunate enough to obtain the support of the central leaders, and it only took ten days for them to finalise procedures and get the money they needed from The Bank of China (Y. Zhu, et al., 2008).

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5.4 Concluding remarks

It is evident that Beijing satisfies the first two requirements of media capital (logics of accumulation and trajectories of creative migration). However, applying the third requirement, forces of socio-cultural variations, leads into uncharted waters. In this chapter, I have shown that creative human capital is attracted because of Beijing‘s cultural ethos, its centrality, and its extensive university and institutional networks. I have argued that Beijing has China‘s biggest pool of job opportunities in the media and cultural industries; that there is inspiration to be gained from the latest information from around the world; that media professionals can easily find their peers; that they can get in contact with all the TV stations and film studios in China; and that they can expose themselves to the powerful media players. The continuous migration of media personnel facilitates the media industries‘ growth in Beijing and helps Beijing outstrips other cities in China in terms of the number of organisations working in media industries. Thus, media industries accumulate in Beijing because China‘s best media talents, the major source of creativity, are based in Beijing. Industrial accumulation and creative migration nurture each other; these are comparative advantages for Beijing.

In addition to the prominent industry development and flow of human capital, Beijing‘s ethos is an advantage for media industries development; Beijing‘s ethos is closely related to its political image. This represents the schizophrenic nature of Beijing: politics attracts human capital; this then leads to the formation of cultural communities, which continue to interpret and manoeuvre the political system. In Chinese political language, there is a saying: shang you zhengce, xia you duice (on the top there are policies, below there are strategies). After 1949, Beijing became the political centre and with this came a parallel ethos: the capacity to co-exist with political tensions. A huge portion of the population in

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Beijing is connected to the government in various ways; hence there is much vested interest in ‗accommodation‘ due to the authoritarian political system and this in turn leads to creative interpretation.

Curtin argues that political stability or expressive freedom is a significant factor considered by creative workers, and consequently a political capital is less likely to be a media capital due to the arm‘s length law (Curtin, 2010a, 2010b). As a result, it seems that Beijing‘s deep involvement in politics hinders it from becoming a media capital. But there are two points that we tend to neglect. One is that political constraints are applicable to the whole country, not just Beijing. No matter which Chinese city a media company is based in, it has to understand the rules of the political game. However, there may be variations in how supervision is conducted in different cities and regions. But being close to government is usually an advantage, because the government‘s supervision of media industries is negotiable, especially in the entertainment media sector. The second point is that when media resources and personnel shift from Hong Kong to mainland China, these entities have to contend with the rules of engagement, particularly in relation to sensitive news issues. In relation to commercial media, which is the focus of this paper, the Chinese government holds a more tolerant attitude. It is possible to persuade the government to accept or even support innovation and further reform. As a result, we should understand the Chinese government in a comprehensive way. It is true that the government has its forbidden zone. But as proved by my interviewees, the forbidden zone can be bypassed or revised once a good connection with the government is built up in the context of China.

However, it is misleading to conclude that government intervention is overall a positive factor for media industries development in China: the vagueness of policy provisions breeds opportunities for corruption; the complicated,

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hierarchical administration system lowers operating efficiency and reduces the effectiveness of policies; overprotection of domestic media organisations, especially the state-owned ones, hampers the development of media industries and engenders the waste of resource; and production capacity is hampered by excessive government control . More importantly, the inward-looking development of media industries generated by government intervention may erode Beijing‘s advantages as a potential media capital. Hence, Chapter 6 will conduct a case study of the CBD International Media Cluster in Beijing, to examine its development and identify what results may be produced by the government intervening in media industry clustering.

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Chapter 6: the CBD International Media Industry

Cluster in Beijing

In previous chapters, I have demonstrated why Beijing is the national media centre of China. It has political, cultural and economic power, which contributes to the high concentration of media business and talent. Beijing is also a city of many clusters (jijuqu). As an economic development approach, clustering is supported by the Chinese government and many domestic entrepreneurs. The approach to media clusters internationally is usually the formation of large flagship enterprises. In China, where the media are effectively state-owned, this constitutes a government led approach. Generally speaking, the conglomeration of private companies follow the lead of the state-owned ones, but that sometimes this happens the other way around.

In many such clusters, industry and government actors are deliberately brought together. Furthermore, cluster developments in China are often comprised of a high degree of hierarchical management; actors obtain favourable investment policies; and they are willing to accept state supervision (Keane, 2009). In this chapter, I conduct a case study on the CBD International Media Industry Cluster, the major media cluster in Beijing. This chapter shows that excessive government regulation damages Beijing‘s prospect of becoming an international media capital although media industries and talent are accumulated.

6.1 The CBD International Media Industry Cluster

There are four media clusters in Beijing officially recognised by Beijing Municipal government (see Table 12).Among these, the city‘s CBD (Central

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Business District) area in Chaoyang District (where most media companies are located), provides many clues to understanding the clustering process of media industries, especially after the CBD area was designated as the International Media Industry Cluster in Beijing‘s second wave of ‗cultural and creative industries‘ projects in 2008. However, the process of clustering began long before this. Companies started moving to the CBD spontaneously from 2004, when the news about CCTV‘s relocation to Chaoyang District was released.

Table 12 Media clusters in Beijing Item Name Content Location

around CCTV new building at Beijing CBD the heart of CBD in Chaoyang 1 International Media TV and film District, east urban area of Industry Cluster Beijing

China Huairou Film Huairou District, northeast outer 2 TV and film and TV Base suburban area of Beijing

China New Media Daxing District, south suburban 3 New media Development Zone area of Beijing

TV, new media, Adjacent to the CBD, Chaoyang 4 Huitong Time Square and music District, east urban area of industries Beijing

6.1.1 The Central Business District in Beijing

The CBD is the primary location for finance, media and business services in Beijing. It occupies 3.99 square kilometres of Chaoyang District on the east side of the city. Chaoyang District occupies 470.6 square kilometres and has a population of 3.55 million, making it the largest urban district of Beijing. Chaoyang District is designed by the Municipal government to serve several functions in Beijing: the Olympic functional zone; the CBD; the electronics

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industry zone, the diplomatic window of Beijing; and the node connecting China and the international world. According to the official statistics on Chaoyang District government‘s website, more than 13,000 enterprises have settled in Chaoyang since the 1980s16.Now Chaoyang District is home to more than 60%of the foreign business agencies in Beijing, over 3,000 foreign companies, 151 international financial institutions, 146 representative offices of international financial institutions and 167 international news agencies. All foreign embassies, except for those of Russian and Luxembourg are concentrated in Sanlitun, ChaoyangmenWai and Liangmaqiao in Chaoyang District, the diplomatic window of Beijing. The Beijing Capital International Airport is in Chaoyang District, adding to the convenience of travelling internationally. Chaoyang District is the most internationalised district in Beijing. It is also very active in terms of contemporary popular art and culture. It contains most of Beijing‘s artist villages, including 798 and Caochangdi, important performance venues such as the Poly Plaza International Theatre (Baoli Theatre) and the Workers Stadium and the well-known Sanlitun Bar Street, a place where many international visitors go to enjoy themselves. It also hosts a major annual pop music festival, the Chaoyang Music Festival, in Chaoyang Park.

The CBD is geographically situated in the heart of Chaoyang District to the east of the city centre, extending from Dongdaqiao Road to Xidawang Road from west to east and from the Tonghui River to Chaoyang Road from south to north, sandwiched between the 3rd Ring Road and the 4th Ring Road. After many years of construction and development, the CBD has become the most active

16 More information can be found on the English version of Chaoyang District government‘s website. http://www.bjchy.gov.cn/english/asc.htm

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and modern area in Beijing; it has attracted 117 Fortune 500 businesses in the financial, media, information technology, consulting and service industries17. More than 60% of overseas-funded companies in Beijing are in the CBD.

In 2001, the Beijing Municipal Government established the Beijing CBD Administrative Committee under the Chaoyang District government to facilitate investment and manage the development of the CBD on its behalf. Now one of the most important international financial centres in China, it is also the site of a major media cluster. Beijing Television Station (BTV) moved into its new headquarters (Beijing TV Centre) in this area on 1 April 2009, and the new CCTV headquarters is expected to be put into use soon.

After nearly ten years of development, the Beijing Municipal Government approved a CBD east-extension plan in 2009. The new extended area will add an additional three square kilometres of land to the east of the current CBD and is intended to further consolidate Beijing CBD‘s position as a leading international business hub in China. It will mainly house top-level international office buildings, along with several luxury business hotels, large international exhibition centres, top business centres, modern recreational facilities and central squares, making for a regional three-dimensional transport hub and modern skyscraper locale. The project is expected to involve an investment of nearly 100 billion RMB and will be completed by 2017. The east-extension area of the CBD will attract more major multinational corporations and create as many as 100,000 new jobs. According to the CBD Administrative Committee,

17 This data is retrieved from a report at Xinhua Net on 13th July. More information can be found at: http://news.xinhuanet.com/newscenter/2008-04/29/content_8075289.htm

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the new area will continue to shape into ‗an area leading international financial and media industry with high-end service agencies as the essential sectors‘.18

Figure 14 Beijing CBD east-extension map (adopted from the website of CBD administrative committee)

6.1.2 The formation of CBD International Media Cluster

The Beijing CBD International Media Industry Cluster was formally recognised by the Beijing Municipal government in 2008. It is located around CCTV‘s recently completed new building at the heart of CBD in the eastern part of Beijing. Over 80% of overseas news agencies and 167 international media organisations are located there, including CNN, VOA, BBC, Viacom, Timer Warner and Disney, as well as significant Chinese media such as CCTV, Beijing TV, and Phoenix TV. According to statistics, over 1700 cultural and media

18 See: http://www.bjcbd.gov.cn/en/dk/index.shtml for more information regarding the CBD east-extension plan.

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organisations were situated in the CBD by September 2010. Chaoyang District government‘s report claims that the rate of growth has been stable since 2006,and on average one media company has moved into the CBD per day ("Ten years of CBD," 2010).

The CBD International Media Cluster started with CCTV‘s relocation plan. CCTV (China Central Television) is the biggest TV station in China, and is considered one of the ‗big three‘ media outlets in China, along with the People’s Daily and Xinhua News Agency. CCTV has a close relationship with China‘s State Administration of Radio, Film and Television (SARFT); it is the only TV station directly under SARFT, and normally the director of CCTV plays an important role in SARFT. Therefore CCTV always speaks for the central government, and its move embodies SARFT‘s policy trend. As a result of this special relationship with SARFT, CCTV has been located in the west of Beijing, in Xicheng District, the location of most central government branches. In this sense, CCTV‘s proximity to the government symbolises the political power behind China‘s media industries.

The CCTV centre in Xicheng is too small to serve the station‘s development. Many of its staff have to rent studios and offices in the neighbourhood because the building‘s strict security measures create inconvenience for those entering the building, not to mention difficulties of coordinating such a huge but scattered institution. As a result, the need for relocation was inevitable if CCTV was to continue its growth. In 2004, CCTV conceived a plan of moving to the core area of the CBD. This decision arguably represents a strategic shift from party organ towards an international media enterprise. CCTV chose a design by Dutch architect Remi Koolhaas, and the construction of the new building began shortly after. The new building is a 234-metre high, 44-storey skyscraper in the CBD. It is not a traditional tower, but a loop of six horizontal and vertical

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sections covering 473,000 square metres of floor space, creating an irregular grid on the building‘s facade with an open centre. Because of its radical shape, the CCTV new building is often jokingly called ‗the big boxer shorts‘ (da kucha). The construction of the building costs 10 billion RMB and is considered to be a structural challenge, especially because it is in a seismic zone.

CCTV‘s move to the core area of the CBD has many implications: Firstly, with increasing commercialisation of the TV sector in China, and with growing competition from domestic and foreign companies, CCTV realises the urgency and necessity of reshaping its image and remaking its development strategy. Historically, the dwelling spaces of Beijing have been distributed in a way that is summed up by the old Beijing adage, ‗in the east are the wealthy, in the west live the aristocrats and bureaucrats, while in the south and north are only poor people in the lowest level of the society‘ (dongfu xigui nanpin beijian). This spatial distribution is still evident in Beijing. The west urban area of the city, Xicheng District, is the site of most central government offices and military institutions, whereas the east urban area of the city, Chaoyang District, provides residential and work space for China‘s ‗new rich class‘.

CCTV‘s move to the CBD, the core area of Chaoyang District, reflects its determination to commercialise. Furthermore, the unusual shape of the new building also demonstrates CCTV‘s aspiration to become a world-class media organisation. CCTV is China‘s only national television media and is eager to build a brand new image, which can impact on the world in accordance with a national campaign of ‗soft power‘. CCTV is a major force in this campaign. Through this building, which is in complete contrast to the shape of CCTV‘s old building and challenges conventional architectural ideas, CCTV wants to capture the world‘s attention. As explained on CCTV‘s website, ‗it not only represents the image of a new Beijing, but also expresses the significance and

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cultural identity of TV media‘.19 But the most important implication here is in the central government‘s support for the relocation plan. It would be impossible for CCTV to purchase such a large area in the core of the CBD, which is the most expensive area in Beijing, without the government‘s support. From this perspective, CCTV‘s move is an expression of the government‘s decision on media reform rather than an action simply taken by CCTV.

Figure 15 CCTV's old building vs. the new building (compiled by the author from pictures at: www.cctv.com)

Production companies, broadcasting institutions, advertising companies, training organisations, and performance agencies which used to be in the west of Beijing and close to the current location of CCTV, began moving to the CBD soon after CCTV‘s relocation plan was released. A business relationship with CCTV is a symbol of strength: media companies collaborating with CCTV can benefit

19 This is the expert comment quoted in CCTV‘s report on its new building. More details are available at: http://cctvenchiridion.cctv.com/special/special/C20427/20071228/105782.shtml

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economically and by association. Beijing TV (the local TV station) and Phoenix TV (the most popular overseas TV station based in Hong Kong) soon moved to the CBD. Despite the high rents, media companies have moved to the CBD. As Wang Feng, the manager of Beijing Seventh Studio Co. said, ‗We have to come here, no matter how expensive it is.‘ (Interview with Wang Feng, 2009) Hence CCTV‘s move drives the restructure of the landscape of the media industries in Beijing, resulting in the emergence of the CBD International Media Cluster. As mentioned above, this agglomeration was recognised by Beijing‘s municipal government as an official creative cluster in 2008, a time when China began to up-scale its innovative productivity through new forms of creative organisation and management, often in designated ‗creative clusters‘(Keane, 2007a).

The enthusiasm for the cluster, which began with the CCTV relocation plan, wasn‘t derailed by a sudden fire at the beginning of 2009 which temporarily stopped the construction of the CCTV new building. Rather, the agglomeration continues. Although CCTV‘s move engendered the formation of the CBD media cluster, other factors have now emerged to contribute to the process of agglomeration. With the agglomeration of media companies, a reservoir of employment opportunities has emerged and more media workers are attracted. This in turn has attracted more people to settle in this area to take advantage of the pool of benefits. Wang Kai, a manager in ACG Education International, which is a major partner of CCTV in digital production and animation training, explained: ‗We started our company here in 2007 for three reasons: the international atmosphere, the conglomeration of cultural and creative industries, and the new headquarters of CCTV and BTV‘. (Interview with Wang Kai, 2009)

The geographic proximity benefits media companies in respect to business collaboration opportunities, production costs, brand value, credit rating, and commercial status. Considering the heavy traffic in Beijing, being close to peers

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saves time and enhances work efficiency. Luo Xuan, CEO of Beijing BMC Co. Ltd., a company providing animation, digital effect and advertising services for CCTV and other commercial clients, said that now he can have at least two to three meetings and have several tasks completed in one day, as his clients are all in CBD, whereas before he might only have been able to meet one customer if was delayed in Beijing‘s traffic. (Interview with Luo Xuan, 2009) In addition, to have an office in the CBD media industry cluster symbolises quality, experience and capability. Only companies that are good enough can make enough money to afford the high cost. Lu Jia, the Chinese co-founder of Beijing Somebody International Media, said:

When we meet with TV stations for the first time, they look at the address

printed on my business card. They will have more confidence in your

capacity even without inspecting your company in person once they see that

the address of your company is in CBD… because CBD represents

high-class and expensive to people...CBD is a status symbol. (Interview with Lu Jia, 2009)

To media professionals, the CBD is the most stylish and bourgeois area in Beijing. They can easily find places like cafés, bars, restaurants, galleries and venues that give them space to display their work and socialise. They learn from each other by exchanging information and knowledge. The coexistence of people in related industries reinforces the impression of CBD as a vibrant media cluster. However, it needs to be noted that the symbolic value of the CBD media cluster is hard to reproduce or imitate elsewhere. The CCTV‘s move was contingent on the Beijing municipal government‘s new CBD development plan, which emphasised support for media industries in the area.

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6.1.3 The CBD International Media Cluster and the capital city

The CBD media cluster cannot be seen in isolation from the aspirations of Beijing. The cluster reflects the development of Beijing towards an international media capital. Although some of my interviewees expressed disappointment at the temporary setbacks in CCTV‘s move (the fire) they still believe that the CBD is now a good place for media business in Beijing and that Beijing is the best place for media business development. In their view: Beijing, the national capital, is the place where things are happening; the key to media business in China is keeping up with trends; Beijing is the place where most job opportunities lie and where the biggest network of media industries is situated; and the emotional bond with Beijing due to its capital status is shared by most Chinese people.

International media companies come seeking opportunities for a variety of reasons. Beijing has attracted many foreign journalists because it is the nation‘s political centre, and historically, Chaoyang District was designated as the residential and work area for non-Chinese media in Beijing before the government abolished restrictions in the early 2000s. As a result, Chaoyang District has the biggest aggregation of foreign journalists and news agencies in Beijing. Most non-Chinese in Beijing choose to live or work in Chaoyang, in turn making it more internationalised and cosmopolitan. International media companies feel closer to this area psychologically since they are familiar and comfortable with the environment and can easily associate with peers from the same cultural background, which makes them feel more secure and able to find more help in this unfamiliar country. The proximity to the airport, and the well-developed transport network, facilitates these international travellers‘ work and life. Furthermore, considering the difficulty of doing media business, foreign media companies need to build collaborative relationships with domestic

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media companies. For this reason, Beijing is an ideal place for them to start learning the local business culture, choose suitable local partners and find business opportunities.

As many scholars have noted (Chan, 2003; Fung, 2009; Sun & Zhao, 2009), China‘s media has been granted a commercial mandate while fulfilling its function as party mouthpiece. Inevitably, the government is an important factor influencing the growth and clustering of media industries across the country. Ideology remains a significant consideration, not only in terms of media companies‘ survival, but also for government officials in deciding whether or not a TV program or film can be broadcast. As the political centre of China, Beijing provides the best access to critical information for lowering business risks; in China this critical knowledge includes government policy developments. Understanding cultures of production in Beijing is important for both local and international players in reducing transaction costs. Not only the development of the industry, but also the development of clusters is determined by the government. So far, Beijing Municipal Government has recognised 30 cultural and creative clusters and set 500 million RMB annually aside to support the construction of such clusters, according to ‗Measures for Management of Special Fund for Infrastructures in Cultural and Creative Industry Parks of Beijing‘ (Beijingshi wenhua chuangyi chanye jijuqu jichu sheshi zhuanxiang zijin guanli banfa)20, implemented by the Beijing Municipal government in 2007 when the fever of creative industries started in China.

20 The full text of this policy can be retrieved at the website of Beijing Cultural and

Creative Industry Promotion Centre: http://www.bjci.gov.cn/292/2007/11/06/[email protected]

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As one of those officially recognised creative clusters, the CBD International Media Cluster is heavily promoted by the policies of Beijing‘s municipal government. In addition to the city‘s policies for creative industries and clusters, the Beijing Municipal government also pays a lot attention to the development of media industries. In Beijing‘s Eleventh Five-year Plan (2006-2010)21, the Beijing government proposed to develop the city as the national centre for film and TV production and trading, with the major measure for achieving this objective being to ‗reform the system and implement policies‘. In this plan, the Beijing Municipal Government designated Chaoyang District, especially the CBD, as the key area for the development of media industries. It is written in the plan that ‗based on CCTV and BTV, the CBD will be developed as a cultural and creative centre for media production, where cultural and media industries cluster‘.

In the District‘s Twelfth Five-year draft plan, the Chaoyang District government proposed that the CBD will ‗vigorously develop information and media industries…absorb more provincial and city TV stations…and enhance the cluster of international news agencies and media groups.‘ All these government discourses give media practitioners the confidence which drives them to join media industries and move to the CBD. Wang Feng, director of Beijing Seventh Studio Co., admits that his dedication to media industries is largely aroused by the government‘s vigorous promotion and believes that great potential will be released by CCTV‘s relocation. To him, media industries have a big future in China as a ‗sunrise industry‘. He attributed his decision to locate here to the fact

21 The plan can be found at Beijing Municipal Commission of Development and Reform‘s website. http://www.bjpc.gov.cn/fzgh_1/guihua/11_5/11_5_zx/11_5_zd/200612/t146098_2.htm

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that the media industry is listed among the key industries of Chaoyang District in Beijing Municipal government‘s plan. (Interview with Wang Feng, 2009) Thus, Beijing‘s unique socio-political status helps the CBD media industry cluster grow and consequently smooths the progress of its development as a media capital.

6.2 Tensions

Government plans and policies have provided a strong impetus. But evidence shows that the CBD‘s prosperity may be misleading. According to a survey by the renowned financial and consulting service company in real estate, Jones Lang La Salle, the vacancy rate of office buildings in the CBD was 37.5% in 2010, much higher than other areas of Beijing22. Moreover, the government designated another nine plots in the core area of the CBD for office buildings in the first half of 2011. Rents are still increasing despite the abundant supply of land. According to the report on Beijing Office Building Information Net23 , 47% of office buildings in the CBD increased their rent in 2011, and the highest increase was 66%. This reveals that there is a large bubble forming in the development of the CBD and that the government‘s enthusiasm does not match its expectations.

22 This survey is quoted by a report ‗Beijing CBD area is still hot in the real estate market‘ on Beijing Office Building Information Net: http://bj.fouxun.com/news/32/2010812143821.html

23 Please refer to: http://www.beijingoffice.com.cn/news/34/201174170951.html

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The conglomeration effect is taking place much more slowly than the government expected, and the huge investment from government increases the cost of operating a business in the CBD. The disparity between the government‘s intentions and the actual outcome is also applicable to the media industries. In addition to Chaoyang District‘s CBD development agenda, the Chinese government‘s media policies and political advocacy are understood and executed in a way which generates outcomes and effects in conflict with media industries‘ needs. Therefore the question of whether or not Beijing can become a media capital is impacted upon by the socio-political status of the city, which has assisted it to leverage advantages in the accumulation of business and human capital.

6.2.1 Small and medium companies

Gao Daquan (literally tall, big and perfect) is a major figure in the novel Golden Road (jinguang dadao) written during the Great Cultural Revolution period and later adapted for film. This figure was created based on the government‘s requirement for media content and cultural products at that time: the core figures must be tall, big and perfect. Since then, this logic is deeply rooted in every movement and action taken by the Chinese government. It appears that everything built by the government must be high-class and large-scale. In writing about media Wanning Sun (W. Sun, 2010b) has identified the concept of ‗scale‘ as a way of making sense of the ambitions of provincial, regional and local actors. Sun notes how the question of scale informs policy making and administration at the formal level, as well as in the popular imagination of place. The most illustrative evidence of the government‘s strategy of ‗scale jumping‘ and aspiration for ‗tall, big and perfect‘ enterprises is its media group strategy since 2000. Governments at all levels are encouraged to reorganise the media

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resources within their respective territories and build up their own media groups so as to meet the challenge from international media conglomerates brought in by China‘s accession to WTO. In addition to building these flagship enterprises, sometimes literally called ‗aircraft carriers‘, the government‘s agenda is reflected in its construction of clusters.

In the case of CBD International Media Cluster, it is evident that the government aims at building a high-end cluster. As seen on the CBD Administrative Committee‘s website, the east-extension area will ‗enrich and improve CBD‘s industry position of modern and high-end commerce… and form a modern and high-end business district‘24. The expansion phase began in 2010, and the demolition area is 2 million square metres. Old buildings are being torn down and new skyscrapers will be built in order to foster a modern environment, attract multinational companies, enhance the quality of the cluster and realise the government‘s aspiration. The deputy head of Chaoyang District, Chen Gang, explained at the CBD International Finance Forum in 2011 that the newly added area in the CBD east-extension plan was intended to service domestic and international large enterprises25.

From these plans it is clear to see that it is going to be more difficult for SMEs (small and medium enterprises) to secure CBD space, since they are not able to

24 This is proposed in the Committee‘s specification for the CBD east extension plan bid.

For more information please refer to: http://www.bjcbd.gov.cn/dk/index.jsp

25 According to Chen Gang, large enterprises invited by the government will be able to make their requirements for work space and the government will have the office buildings custom made according to their requirements. http://business.sohu.com/20091014/n267350550.shtml

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afford the increasing rents, which are already high. The construction of the CBD under the government‘s leadership makes the environment less suitable for SMEs. However, the vast majority of companies moving to the CBD are SMEs. Beijing Somebody International Media is one of those SMEs. It was founded by Chinese and Taiwanese producers in 2007, and producing a children‘s program for CCTV and several entertainment shows for provincial TV stations, including Guangdong TV and Guangxi TV, when I interviewed its co-founder, Lu Jia. On the question of the movement of media companies from the west to the east because of CCTV‘s relocation, he said:

We started our business in CBD considering the new headquarter of CCTV

will be here too… But large companies still remain where they are… Only

small media companies like us who have a very close business relationship

with CCTV would move here and cluster around CCTV…. [because]

Sometimes a small media company‘s livelihood depends upon just one

program of CCTV… Constant contact with TV stations can create more

opportunities for us.

However he is not satisfied with the environment offered by the CBD except for its international image. He complained:

CBD only looks expensive and high-class although it is not at all in reality.

Only people who actually work here and suffer the same problem can

understand our difficulties in the CBD. I don‘t like here but I had no

choice… As a small company, we depend upon CCTV.

(Interview with Lu Jia, 2009)

The fire in early 2009 postponed CCTV‘s move to the new premises. This disadvantaged small companies relocating to the CBD in order to establish 173

better connections with CCTV. Li Yan, the freelance film director, also observed:

It is true that many small companies have moved to the CBD for the sake of

CCTV. But CCTV hasn‘t moved yet. Therefore people have to wait in the

CBD, which is too expensive for most of them. Therefore some of them

closed their business during this time and some of them are still struggling.

(Interview with Li Yan, 2009)

According to scholars, SMEs constitute an extremely significant part of overall employment in creative industries in Western countries (O'Brien & Feist, 1997; O'Connor, 2007; Pratt, 1997). Furthermore, in Hollywood the entire production system is significantly reconstituted as congeries of many small and medium-sized firms linked together in shifting coalitions by flexible production networks (Scott, 2005). In China, along with the media reform, the separation of production and broadcasting (zhibo fenli) has become one major model of media business operation. As a result, a vertical system of media outsourcing is forming. In the emerging system, state-owned TV stations like CCTV mother SMEs by means of subcontracting: SMEs supply creativity and innovation continuously by selling their technology, production or service to TV stations. As a result, the role of SMEs in China‘s media industries is growing bigger and they need more assistance from the government. However, the government only sees the benefit of having big media organisations such as CCTV in the cluster without acknowledging the foundation sustaining the cluster, which is ‗a great level of vertical disintegration and transaction-intensive interaction‘ (Scott, 2005, p. 112).

The development of the CBD media cluster at times seems more like a vanity project requiring propaganda rather than creativity. Consequently, SMEs feel

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discriminated against by the government‘s policy directives. Large companies are the major targets, and construction work is centred on them. There is no space in the CBD left for SMEs in the government‘s plan. To them the government‘s grand plan of clusters is contorted into a conspiracy of real estate developers. The government‘s focus on development scale is not only reflected in the CBD‘s growth. The discrimination also exists in the government‘s media policies as well as their cluster policies. For example, benefits for large enterprises are obvious in the Beijing Municipal Government‘s Eleventh Five-year plan. Large media companies, and infrastructure such as BGCTV (gehua youxian, the biggest cable company in Beijing), Beijing Media (beiqing chuanmei, a big print media company owned by the Beijing Municipal Government), the new CCTV building and BTV are listed in the plan as the key targets for government support, but the SMEs are left out.

In 2010, however, some national policies began to pay more attention to SMEs. The ‗Guiding opinion on promoting the film industry‘ and the ‗Guiding opinion on financial support to cultural industries‘ implemented by the State Council in 2010 proposes that SMEs will be supported in media industries. However when it comes down to local government level, no concrete execution measures have been made yet because the local officials‘ first concern is to make its ‗face work‘ more visible to the central government in order to obtain more credit. Accordingly, it is more risky to invest in SMEs than in large enterprises, especially state-owned ones. Therefore the central government‘s advocacy for supporting SMEs remains on paper only.

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6.2.2 The content of media products

According to Curtin, one major factor attracting creative migration in the Asian context which tends to be neglected by Western scholars, especially economic geographers, is expressive freedom (Curtin, 2007, p. 288). He emphasises that expressive freedom is a baseline requirement for the emergence of a media capital. According to him, media capitals emerge where opportunity, prosperity, expressive freedom, and rich cultural resources converge. Moreover, Curtin argues that a city‘s ability to attract creative labour and make effective use of it seems to rely not only on the city‘s supply of creative venues but also on its diversity. A media capital should have sufficient creative human capital.

Moreover, a media capital also needs to ensure creativity is as diversified as possible and foster an environment for diversified culture and creativity to converge and mix. Curtin contends that government policies must be designed to ‗cultivate and exploit the often serendipitous confluence of variables‘ in order to continuously maintain creative migration. A secure and diverse creative community, together with the growth of media enterprises and their internationalised operations, can enhance a city‘s chance to develop into a media capital. On the contrary, policies discouraging secure and diverse cultures will undermine a city‘s possibility of being a media capital, as the status of media capital can be won and lost under different circumstances. According to Curtin, Hong Kong‘s case is illustrative. The atmosphere of free speech and vibrant popular culture in Hong Kong bred the biting sarcasm reflected in its content on a broad range of topics, characters and social conventions. This is why Hong Kong emerged as a media capital in the ‗Great Chinese market‘26 before 1997.

26 Here the ‗Great Chinese Market‘ includes Mainland China, Hong Kong, Taiwan, and

Chinese Diaspora communities scattering in other continents.

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But Hong Kong‘s status as a media capital has waned partly because of the decreasing space allowing for expressive freedom and cultural hybridity since the handover of sovereignty to the PRC. Therefore a media capital is more likely to emerge at ‗those times and places that genuinely nurture personal expression‘ (Curtin, 2007, p. 288).

As discussed previously, Beijing is a city where we can see a great deal of cultural diversity. However, the key difference concerns how much cultural diversity is allowed by the Chinese government to be incorporated into media content, which is the final product for audience consumption. Looking at media policies and the production environment in China, it is evident that the answer to the question is ‗not much‘. The foremost regulatory measure adopted by the Chinese government is censorship. Compared with international media environments, a TV drama or film needs to pass through censorship procedures twice in China. One is before production27 and the other is after production. According to China‘s media regulations, a production company needs to submit the production, including storyline and plot, to SARFT for registration prior to the production. The production organisation will be asked to stop production once SARFT finds something wrong or in conflict with the mainstream culture in the production plan. Requested changes can be made. In this regulatory system of double censorship, topics are filtered twice by the government, and only topics in line with the culture the government wants to promote can pass through. For example, SARFT publishes monthly notices of censorship outcomes on TV drama shooting plans. In the notices, SARFT also provides information hinting at what content is encouraged and what content is not tolerated. In SARFT‘s notice for TV drama shooting plan registration in March

27 It is normally called ‗registering in the system‘ (beiangongshi) in relative media policies.

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of 201128, SARFT warned TV companies that ‗some of their productions lack positive ideological significance (jiji de sixiangyiyi) and therefore they should correct their thoughts, and promote the prominent traditional Chinese culture‘. In the same notice, SARFT also asked TV stations to ‗produce a few excellent TV dramas on the revolution, reform and opening-up and the national revival under the CCP‘s leadership to celebrate the 90th anniversary of CCP‘.

Furthermore, in terms of media export the Chinese government also controls what content can be exported to overseas audience. The Chinese government wants to show the global community the prominent traditional Chinese culture and the happy life that Chinese people enjoy in modern times. Media export is strongly associated with the soft power strategy. Accordingly, it is impossible for the Chinese government to accept any content that does not conform to the mainstream ideology in exported media product, not to mention content mocking or criticising the state.

Rather than banning cultural diversity by explicit order, the Chinese government chooses to promote socialistic mainstream culture by policy leverage. Firstly, the government supports media export on topics of mainstream culture. For example, in the Catalogue of Cultural Export Projects of Excellence in China (2009-2010) (2009-2010 niandu guojia wenhua chukou zhongdian qiye mulu) and Catalogue of Cultural Export Enterprises of Excellence in China (2009-2010) (2009-2010 niandu guojia wenhua chukou zhongdian xiangmu

28 This notice is available at SARFT‘s website: http://www.sarft.gov.cn/articles/2011/03/31/20110331140820680073.html

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mulu)29 released by the Ministry of Commerce in 2009 and 2010, the key enterprises supported by the government to export media products are mainly state-owned media companies, such as China Film Group and China International Television Corporation; the key TV programs, dramas, films and events supported by the government for media export are documentaries on culture, nature and history, TV dramas on ancient history and legends, and infrastructure construction work in African countries. The same orientation is also obvious in Beijing‘s local policies. In Policies for the Promotion of Cultural and Creative Industries of Beijing (Beijingshi cujin wenhua chuangyi chanye fazhan de ruogan zhengce) released by the Beijing Municipal government in 200730, international collaboration is encouraged to ‗enhance Beijing‘s competitiveness in cultural and creative industries and expand the international influence of the splendid Chinese culture‘. As a consequence, media products that the Chinese government wants to export overseas do not appeal to audiences in Taiwan, Hong Kong, and other overseas markets. This is the ‗plodding style‘ as Curtin has observed (Curtin, 2007, p. 142).

The Chinese government punishes violators severely. The film Lust, Caution (se jie), directed by Ang Lee in 2007, depicts a group of Chinese university students

29 Both documents are available on MoC‘s website at: http://fwmys.mofcom.gov.cn/aarticle/a/ad/200911/20091106638174.html?3144928510=201

099483 http://www.mofcom.gov.cn/aarticle/bh/201001/20100106740265.html?3295923454=20109

9483

30 The document can be found on the website of Beijing Cultural and Creative Industry

Promotion Centre, http://www.bjci.gov.cn/292/2007/06/26/[email protected]

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from Hong Kong who plot to assassinate a high-ranking special agent and recruiter of the puppet government, using an attractive young woman to lure him into a trap in Shanghai in 1942, when the city was occupied by the Imperial Japanese Army and ruled by the puppet government. At the end of the film, the young woman, overcome by the special agent‘s love, urged him to escape the assassination attempt and was captured and killed. The film caused huge controversy in Mainland China, while winning quite a lot awards in different countries, including the Golden Lion at the Venice Film Festival. The controversy was not only about the three episodes of graphic sex with full-frontal nudity, but also, and more importantly, about the film‘s narrative of a special agent working for the puppet government. Normally, people like this man from the time of the anti-Japanese war (1937-1945) are supposed to be irreconcilable villains in China‘s ideology. However in Lust, Caution he is shown to have some positive attributes. An associate professor from the Institute of Communication Studies at CUC, Liu Jianping, criticised the film, saying that it ‗did a plastic surgery on traitors‘ and it was an ‗alarm bell for the mainstream culture safeguarding the national spirit‘31.

Eventually, the film was shown in China after the removal of 13 minutes of footage. The leading actress, Tang Wei, who is from Mainland China, is still banned by SARFT from appearing in any domestic film and TV productions. According to SARFT, the government ‗reduces her public appearance‘ because ‗her rapid rise due to her performance involving a lot of sexual scenes may

31 This is expressed in Liu‘s review for the film on Global Times (huanqiushibao), the newspaper on international news report managed by People‘s Daily (renminribao). Liu‘s review can be retrieved at: http://world.people.com.cn/GB/89881/6500389.html

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mislead the youngsters‘32. Therefore the case of Lust, Caution illustrates how important it is to be ideologically correct in China. Ideological correctness constrains editorial freedoms in media production in China.

In order to cope with the government‘s requirement for ideological correctness, Hong Kong film makers who target mainland China as their biggest market start making two versions of their films. For example, the Hong Kong crime-thriller film Internal Affairs (wujiandao), which was later remade by Martin Scorsese in 2006 as The Departed, and went on to win the Academy Award for Best Picture, made a different ending specially edited for Mainland China in order to pass censorship. In this version, the bad guy was captured in the end, whereas he lived safely under his cover as a good policeman in the universal version. Since then, one film with two different endings has become a major strategy for Hong Kong–China co-productions. Any product or company can be banned for not cooperating with the government. A Hong Kong film company, Universe International (huanyu dianying), was banned by SARFT for one year simply because it promised to change its film title from Shaolin Football (shaolin zuqiu) to Kungfu Football (gongfu zuqiu) as SARFT requested, but didn‘t make the change on the posters. In this case, the government‘s concern is that using Shaolin Temple‘s name in a commercial film may harm the reputation of Shaolin Temple, which is renowned for its association with Chinese martial arts. Chinese director Lou Ye has been banned by SARFT from shooting any film in China for five years because he sent his film Summer Palace (yiheyuan) to the Cannes Film Festival without SARFT‘s approval in 2006.

32 This information is from the report on the website of Xinhua News Agency. The report is available at: http://news.xinhuanet.com/ent/2008-03/19/content_7819881.htm

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6.2.3 CCTV’s influence

The Beijing Municipal Government assumes that CCTV has a strong influence over China‘s media industries. Therefore the government took CCTV‘s move as a great opportunity to integrate most of China‘s media capacity into the CBD and build up a media cluster that can influence the whole country. However, the government has never asked the question whether CCTV is attractive enough for media companies, especially the big ones, which are the government‘s major target, to follow CCTV‘s lead. Different types of media companies have different concerns and needs for their office location depending on their status in China‘s media market. From the list of addresses of major private media companies in Beijing in Table 14, it is clear that none except for Ciwen Pictures are in the CBD area designated by the government and that none have been attracted to the CBD by the government‘s development agenda of CBD media clustering, although they all stay comfortably in the east of the city, mostly in Chaoyang District and Dongcheng District. These large-scale private companies have established their brand and stable distribution channels; and they don‘t necessarily need to move with CCTV, which is just one of their clients or partners. On the contrary, ‗It‘s simply because we are very used to life in the east,‘ said Guan Yadi, who used to be assistant to Yu Dong, CEO of Poly Bona Film Distribution Co., one of China‘s biggest private film companies, and now works as an independent film producer. Here the ‗life‘ mentioned by Guan refers to the business atmosphere and the bourgeois environment which is people‘s general impression of the east of Beijing.

Table 13 Location of major private media companies in Beijing (distance calculated based on Google Map) Distance to the No. Company Feature Address District core of CBD

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Huayi China‘s Brothers biggest No. 18 Chaoyang 1 Media Group private film Chaoyangmenwai 3.4 km District (huayi production Street xiongdi) company Poly Bona China‘s Film biggest No. 105 Chaoyang 2 Distribution private film 5.5 km Yaojiayuan Road District Co. (baoli distribution bona) company Dongfang China‘s Fengxing major TV No. 107 Dongsi Dongcheng 3 Media & program 7.1 km North Street District Culture production Company company China‘s Enlight biggest TV Media No.11 Hepingli Dongcheng 4 program 8.4 km (guangxian East Street District production chuanmei) company Hairun Movie China‘s most & TV Group productive No. 5 Anyuan, Chaoyang 5 10.7 km (hairun TV drama Anhui Beili District yingshi) company Pegasus China‘s Movie & TV Huating Jiayuan, major TV Chaoyang 6 Group North 4th Ring 10.6 km drama District (jinyingma Road Middle company yingshi) Beijing China‘s Xinbaoyuan major TV No. 2 East 3rd Chaoyang 7 Movie & TV 6.1 km drama Ring Road North District Investment company Ltd Co. Beijing China‘s Galloping major TV Horse Film No. 6 drama and Chaoyang 8 &TV Chaoyangmen 5.1 km film District Production North Street production (xiaoma company benteng) Ciwen China‘s No. 8 Dongdaqiao Chaoyang 9 In CBD Pictures major TV Road District

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drama production company

Moreover, in terms of state-owned media companies, the CBD media cluster is less attractive than the government imagines. Beijing Forbidden City Film Company (Beijing zijincheng yingye) moved from South Chizi Street (nanchizi dajie) in the core of Tiananmen Square, to Shazikou Road in Fengtai District, south of the city, and then finally settled down on the North 3rd Ring Road. According to Qian Chongyuan, the head of distribution, his company has travelled a long way towards the north-east of Beijing. Qian recalled:

No one liked to approach us, or even pay a visit to our company when we

were in the south of the city… Cultural and creative enterprises need to

cluster together. We felt isolated before we moved to our current office...

Now it‘s so convenient for us. Even reporters didn‘t like to come to our

press conferences before.

However his company chose the current location, which is 14km away from the core of the CBD because:

It‘s so easy to go anywhere from our current location because most of our

partners are in the north and the east of Beijing, there is no suitable space for

us in the CBD, and as a film company it‘s more convenient for us to be close

to China Film Group and Beijing Film Studio.

(Interview with Qian Chongyuan, 2009)

In addition to being close to their business partners, another reason is that, as state-owned media organisations, ‗we have our own asset so that it‘s too expensive for us to move… besides, we don‘t need to follow CCTV because we 184

don‘t rely on CCTV that much,‘ explained Xu Gang, deputy director of distribution of August First Film Studio (bayi dianying zhipianchang), which is managed by the Chinese military and produces educational military feature films, commercial films, and TV dramas. (Interview with Xu Gang, 2009) China International Television Corporation, the wholly-owned subsidiary of CCTV, will also remain in its current location, which is next to CCTV‘s old building.

Furthermore, according to most interviewees, while they take the government policy into consideration, they pay more attention to the proximity of their peers and clients. Tom Wang, whose company is 7km away from the core of the CBD, explained:

My brother‘s business was here initially, and a lot of animation, advertising,

TV and media companies have been clustered around here. So I thought

maybe I could recruit some good talents here… On the other hand, in Beijing

most cultural companies and media companies tend to relocate from

Dongcheng District to Chaoyang District. So it would be easier for me to

communicate with them. After all, the eastern side of Beijing is more cultural

and creative.

(Interview with Tom Wang, 2009)

Rather than an expensive office building, media companies prefer an environment favourable for stimulating creativity. Kuailego, the TV shopping channel of Hunan Satellite TV station, also chose to open its Beijing office, Kuaile de Gou, in the Huitong Time Square, which is only 4km away from the core of CBD and used to be the site of Beijing Thermo-power Plant. Huitong Time Square was recognised by Beijing Municipal Government as another media cluster in 2008, but is much more low-key compared to the CBD media cluster. According to the general manager of Kuaile de Gou, Peng Yang, the rent

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is much more reasonable, and they feel more comfortable with the open green space where you can see a real fountain during the freezing winter in Beijing thanks to the hot water rather than the narrow sky between high mansions in the CBD. She explained:

We split Beijing into eastern half and western half when we were choosing

the best location for our Beijing office.... the eastern part is creative and

cultural. Therefore, we are inclined to the eastern part naturally as a creative

company. Additionally, the eastern part is close to the airport considering the

transportation. But we don‘t particularly want to squeeze into the CBD,

because we are an entrepreneurial creative company and we don‘t want to

look like an upstart at the very beginning. However, we have to be close to

the CBD, otherwise, we would look out of style. That‘s why we are here now.

We considered the CBD, but buildings in the CBD are all cold concrete

buildings. We don‘t like it… But the environment here is very nice… the

invisible interaction fostered in this cluster is much better than a huge

mansion.

(Interview with Peng Yang, 2009)

6.3 Discussion

Besides the CBD fever, media companies come to the CBD mainly because of CCTV and their trust in the Chinese government‘s power of allocating investment capital, personnel and land. However, Wang Feng believes that the CCTV relocation plan is a groundbreaking point for media industry development in Beijing. Although he is sure that the government will strongly support media industry development in the CBD, he had to locate just outside the CBD, given the affordability issue. (Interview with Wang Feng, 2009)

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Government plays an important role in many international media clusters, such as Hollywood and Gold Coast (c.f. Ben Goldsmith, et al., 2010; Miller, et al., 2001). Curtin‘s media capital principles acknowledge the impact of policy(Curtin, 2007). Curtin argues that policy makers should focus on the supply side of the equation, and intervene selectively to enhance the productivity of particular media centres and institutions by providing infrastructural, educational, and financial resources that might stimulate further growth, because new media capitals can‘t be generated without foundations. On the other hand, policy makers should support and subsidise media institutions to provide resources for local, national and alternative cultures, on the basis of the acknowledgement of market dynamics and talent migrations. Policy makers also should emphasise public infrastructure, such as libraries and public parks, which foster identity, enhance social civilisation, enhance property values, and provide spaces for public discourse (Curtin, 2008).

The CBD International Media Industry Cluster is not a successful cluster in terms of its real clustering effects. The real situation is that state-owned companies and large private companies don‘t want to move to the CBD cluster which is specifically designed by the government simply because of CCTV, whereas small media companies have to move because they are dependent on CCTV. However, the latter are neglected by the government because the government builds the CBD cluster according to its own understanding of creative clusters. The government has invested a lot in the CBD media cluster, but to date this has yielded little. The key reason for this is not only the ‗propaganda‘ or ‗ideology‘, which have already been argued by most Western scholars to criticize Chinese media as tools of the authoritative regime (Donald & Keane, 2002). It is more about the government‘s misunderstanding of media industries. A successful media cluster is in line with the Chinese government‘s

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interests. In addition to the economic benefit, it will also facilitate the Chinese government‘s soft power strategy, which is based on exporting ‗approved content‘. As a result, the government fails to correctly recognise market dynamics and to provide enough space for real media diversity.

Small and medium enterprises which are attracted by CCTV are not recognised as important by the government. Many large scale media companies are also not tempted by the CBD cluster which the government has custom-made for them. The reason for this lack of fit between expectation and reality is the government‘s inadequate acknowledgement of market dynamics; in turn, media products are too stereotyped to export because the selection is made by the government rather than the market. In the end, the government provides physical space but there is a lack of space for diversity of content and expression. Moreover, the government‘s old bureaucratic tradition causes inequality and corruption due to its path dependence, its ideological pattern of power and favour (guanxi). For example, the Beijing Municipal government has set aside a specially fund to subsidise creative enterprises every year. However, the application must first be evaluated and selected by the authority in each district, and can only be submitted via district government. Companies with better a relationship (guanxi) with the government are more likely to win the subsidy since the government is endowed with thepower to decide.

In the long term, the government won‘t be able to distribute resources to the place where it is most needed, despite its strong power in terms of concentrating capital and talent. Furthermore, policies which are made to enhance productivity won‘t be successful, and the government will lose the people‘s confidence, which may further weaken the effectiveness of policy. Many media companies don‘t believe in or even consider the favourable policies that the government provides for clusters and media industries, since they have to go through all the

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complicated approval processes and deal with different requirements from different government branches. Lu Jia recalled: ‗I heard about the tax deduction policy and went to the Chaoyang taxation office to apply for it. But I was told by officers there that they had never heard of the policy.‘ (Interview with Lu Jia, 2009) Luo Xuan said: ‗I would use my time on something else which matters more.‘ (Interview with Luo Xuan, 2009) Therefore, despite the high-class office buildings, the alliances that are set up under the government‘s advocacy and the various management committees that have been established, many would rather stay on the periphery of the CBD where they can do more creative business.

Ashas been demonstrated in previous chapters, many things are negotiable for the Chinese government. It seems that it is too soon for Curtin to make the conclusion that political capitals are unlikely to emerge as media capitals(Curtin, 2010b). Being close to the government is an important advantage for media companies in China. Therefore our assumption of what a media capital is may need to be revised in the ‗great Chinese media market‘. Curtin has observed that Hong Kong, the old media capital in the ‗great Chinese media market‘ is losing its talent to the mainland of China (Curtin, 2007, p. 283). Along with the creative migration, the knowledge is also transferred to Mainland China. Among different sites in China, Beijing is characterised by its close association with government, an advantage appreciated by many Chinese media companies. Hence Beijing stands a good chance of becoming a media capital in the future. But we need to examine how real this opportunity really is. In Chapter 7 I will return to media capital‘s three principles: logics of accumulation, trajectories of creative migration and forces of socio-cultural variation and how they play out in Beijing. I will discuss what kind of a media capital is possible in Beijing, and what changes Beijing needs to make in order to become a media capital.

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Chapter 7: Beijing’s comparative advantages as an emergent media capital

This thesis set out to investigate the possibility of Beijing becoming a media capital. Previous chapters have provided an account of the development of China‘s media industries in terms of reforms and exports and have investigated the status quo of media industries in Beijing. This chapter analyses issues arising from these chapters and discusses the five subsidiary research questions: (1) How do media industries operate in Beijing? (2) Is Curtin‘s media capital concept directly applicable to China? In not, in which way should the media capital notion be revised when applied to China? (3) What factors differentiate Beijing from other known media capitals? (4) Is there a push for Beijing to be an international media capital? If yes, where does it come from? If not, what is holding it back? (5) What are the strengths and weaknesses of Beijing as a media capital?

Chapters 5 and 6 have shown that the development of media industries in Beijing is strongly related to the political status of Beijing. The Chinese government takes marketisation ‗as a balancing act between an open market and a planned economy‘ and aims for ‗predictability, control and convergence‘ (Davis, 2010, p. 124). According to Davis, marketisation is a tool used by the Chinese government to promote growth and profitability; but it must also uphold socialist tenets and enlighten audiences of the Party‘s legitimacy.

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7.1 Predictability, control and convergence

The Chinese government wishes to maintain controlled development while maximising economic interest. This is the dual identity of China‘s media industries. The government‘s marketisation monitors and controls market performance, overseeing what goes to market not by fiat but through ‗micro-adjustments‘ (weiguan tiaokong) (Davis, 2010, p. 123). This explains the continued existence of protectionism in government regulations. Protectionism is not only about strengthening China‘s media industries to compete with the Western media conglomerates, but also, and more importantly, it is about nurturing a group of strong state-owned media organisations—the mouthpieces of the government—to maintain a stable ideology balanced by government‘s direct investment in order to earn profit. According to the media economist Robert Picard, the Chinese government is determined to maintain state-owned media organisations and exercise a greater degree of control over media than other industries because media has more significant cultural, social, and political functions (Picard, 2007). Hence, in the game of media industries in China, state-owned media organisations are the participants representing the government. One may say that the government not only makes the rules for market competition, but also acts as the referee who ensures compliance.

Protectionism for domestic media industries, especially for the state-owned media organisations, is not simply about blocking out any perceived danger that may be engendered by competition. Rather, the main strategy that the Chinese government adopts is to reallocate resources nationally to build up its own ‗media capital‘ to battle with its counterparts in the international arena. This strategy is assisted by government interference in competition. Hence, the Chinese government‘s rationale of predictability, control and convergence, and its development strategy of proactive interference, shapes the ecology in which

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media are produced and consumed. This in turn modifies the concentration of media production, the expansion of media distribution and the migration of creative labour. Moreover, there are differences between the TV and film sectors due to the different attitude that the Chinese government holds towards them. People watch television more than film, as watching TV is cheaper and easier, and it thus has a stronger effect on society. Therefore the function as a propaganda tool weighs more in television than in film, and accordingly the government pays more attention to consolidating control on TV channels in order to ensure that the ‗correct‘ content can be delivered to the audience. On the other hand, the international recognition of the Fifth Generation of Chinese directors informs the Chinese government that film is more exportable than television: film is a form of art whereas television is a type of mass consumer goods. As a result, the Chinese government is more tolerant to film, especially international co-productions, and therefore emphasises the export potential of the film content.

In China‘s TV sector, media reforms have led to the decentralisation of administrative power (Keane, 2007b). The Chinese government established the ‗four-tier system‘ (siji ban) in 1983 to relieve the financial burden. Since then, city and county governments were able to build up local TV stations and broadcast local news and programs in addition to the national broadcaster, CCTV; provincial stations and local governments entered into the media field. They have increased autonomy in their own TV stations. Moreover, they are capable of investing more in their own TV stations, due to the economic improvements since reform and opening up. This is part of the reason why TV stations develop better in economically advanced cities and provinces such as Shanghai, Beijing, Guangdong Province, Jiangsu Province and Zhejiang Province.

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In addition, China is not a homogeneous entity. It is very difficult for the central government to strictly control various local government agencies due to the multi-level governance structure, decentralised economy and the growth of localism (Chin, 2007). With greater economic power, local government and television stations are able to negotiate with the central government. The legitimacy of the central government is largely built upon the support and resources provided by local governments. Along with the growth of localism in the country, provincial TV stations are more vigorous in transforming the system and innovating content and formats and accordingly have developed rapidly, especially since being allowed to broadcast to the whole country via satellite technology. As Sun (2010b, pp. 539-540) maintains, ‗such a picture of uniformity and total top-down centralization no longer fits, and the Chinese media landscape is now marked by scalar contestation, conflicts, and contradictions‘.

As indicated above, the central government has to secure its control over TV channels to maintain a unified socialist ideology. SARFT keeps formulating policies regulating TV stations and the TV market; this occurs especially when provincial TV stations upstage CCTV in the market. For example, Super Girls (chaoji nvsheng), a contest for female singers produced by Hunan Satellite TV and based on the UK Pop Idol format, had huge success all over China from 2004 to 2006. According to CSM, CCTV‘s own media consulting company, audience ratings for Hunan Satellite TV (next to CCTV-1, the most watched CCTV channel) took second place in the national market when Super Girls was on air. Soon after this, SARFT enacted a series of national policies to regulate idol-inspired shows in relation to broadcast time, length, content and the age of contestants (Keane, Fung and Moran 2007). Hunan Satellite TV stopped making Super Girls in 2007 and 2008 and relaunched the program in 2009 after approval by SARFT. By making national media polices, the central government

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maintains its control over the market and ensures the predictable development of the TV industry. Furthermore, it is inevitable for provincial TV stations to set up office in Beijing and communicate with SARFT constantly, because it is hard for them to predict when and how the central government is going to interfere. Similarly, this logic also applies to TV drama production companies, as SARFT constantly regulates TV drama production and distribution as well.

In relation to the TV sector, localism drives the development of provincial TV stations. Since 2010, provincial TV stations have increasingly adopted in-house production to save costs and wield their own influence, in spite of the fact that the government encourages the separation of production and broadcasting. In order to grab market share, which is continuously squeezed by provincial TV stations, private TV companies need to find quicker access to China‘s fragmented TV market and to enhance production quality. Beijing is the preferred locality to for them, as nearly all the TV stations have offices there in addition to CCTV, BTV and Phoenix TV. They can more easily get in direct contact and showcase their work to provincial TV stations.

In the film sector, the centripetal tendency of production is even clearer. As film is deemed as a type of art, it needs to be associated with culture, literature and other types of fine arts. Beijing, China‘s cultural centre, is closely related to the film industry. Shanghai used to be very active in the arts and had an edge on Beijing in terms of film production before 1949. Since the CCP government set up the state capital in Beijing in that year, the central government has vigorously developed education and cultural infrastructure in Beijing because of the need to construct a socialist civilisation (shehui zhuyi jingshen wenming).

In 1982, the central government approved the ‗Beijing Master Plan‘ in which the Beijing Municipal Government set the development position of Beijing as the

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national cultural centre. This position has been incorporated into each city development plan for Beijing, whereas Shanghai has set itself up as the economic centre of China and has been successful in finance and manufacturing. Gradually, Shanghai‘s association with culture was weakened and with this its talent base. In contrast, a better cultural atmosphere is fostered in Beijing due to the clustering of China‘s top universities, such as Peking University and Tsinghua University, and in particular, the talent base for the film industry has been enhanced by the rapid development of Beijing Film Academy, The Central Academy of Drama and the Communication University of China. Gradually, Beijing has attracted most of China‘s top actors, directors and producers, and grown to be China‘s most active hub for the film industry workforce. For this reason, private capital is attracted to Beijing, and many private film companies have established there.

In addition to the government‘s agenda of developing Beijing as a national cultural centre, the centripetal tendency of film production in Beijing is driven by the Chinese government‘s ‗Chinawood‘ aspiration, which, according to Davis, is to match Hollywood internationally (Davis, 2010, p. 124). Therefore the film industry is regarded by the Chinese government as a visible, lucrative source of revenue and prestige. The China Film Group Corporation was established by the Chinese government in 1999 to promote China‘s own blockbuster (dapian). Not limited to film production, the China Film Group is involved in a variety of businesses, including film distribution and exhibition, film importation and export, cinema circuit management, digital cinema construction, print developing and processing, film equipment management, film and TV CD production, ancillary products and even advertising. The vast business scope also covers a huge amount of small- and medium-size film companies in Beijing. Moreover, Beijing is one of China‘s major regions in

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terms of film consumption and, as one of the economically developed regions, has a high density of cinema circuits and screens.

In terms of distribution, Beijing also benefits from this rationale, becoming the distribution centre for China‘s media industries. First, the two biggest distribution companies, China Film Group Corporation and Huaxia Film Distribution Company, were set up in Beijing to secure the government‘s supervision of the film market. The concentration of production companies provides distribution companies with ready access to products. Hence, private film distribution companies aggregate in Beijing to save cost. Gradually, Beijing has become China‘s film trading centre: most of the Chinese film production companies and distribution companies are located there.

Market competition is severe. Film companies need to ‗stimulate audience demand and ensure access to theatres in far-flung locales‘ to widely circulate their products (Curtin, 2007, p. 13). Film companies tend to cluster in places where there are a lot of broadcasting channels. In China, this place is Beijing. Moreover, film companies establish their own distribution companies and theatre chains or collaborate with other companies to widen the circulation channel. Companies in Beijing have accumulated capital to invest in theatre construction. For example, in 2004, Huayi Brothers co-established the Xiying Huayi Film Distribution Company in Xi‘an, Shaanxi Province, with Xi‘an Movie Corp. In 2010, Huayi Brothers built its first cinema in Chongqing, China‘s fourth municipality, directly under the central government, in the south-west of China: this enables Huayi Brothers to capture the market share in southwest China, a big, unexploited market. It also has plans to construct 15 cinemas in China in five years in order to incorporate the distribution and circulation sectors into its industry chain. Poly Bona, China‘s largest private

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film distribution company, is located in Beijing and started developing film production in 2007 in order to make better use of its distribution channels.

The central government needs to control film distribution and cinema screens so as to make economic profit and to regulate the cinema market by participating in market competition and winning a dominant status in the market. China Film Group Corporation controls China‘s second largest theatre chain, China Film Xingmei Circuit Co. Ltd. (zhongying xingmei). In contrast, film companies outside of Beijing can be locked out of the market if they fail to make an early start. Gradually, the film companies located in Beijing have gained control of most of China‘s film market and cinemas.

7.2 Issues arising

Compared with Hong Kong, industrial accumulation and creative migration in Beijing are fuelled by the government‘s proactive endeavours and regulation. Hong Kong‘s media capital status was obtained due to the colonial government‘s benign neglect, which provided artistic freedom. According to Curtin, diversity has provided a similar structuring influence on the status of media capital as the logics of capital and creative migration (Curtin, 2007, p. 23). However, in China the programmed development approach is problematic with respect to the market, the industry and exports.

The domestic market of China does not reward originality (Keane, 2010). Isolated from Western countries for decades, domestic audiences were unable to compare the quality of content. Audiences started receiving imported TV programs and films in the early 1980s; however, these are censored and edited by the government. According to Curtin, markets are made, not given (Curtin,

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2007, p. 22).Markets are reactive to political interventions, and government should use self-conscious state interventions and policies to fashion a terrain for commercial operations in order to foster a healthy market. However, in China, stemming from the rationale of predictability and control, the Chinese government maintains the legacy of ideology not only in the industry, but also in the market, by censorship and proactive interventions from time to time. On the one hand, all the TV stations are owned by the government, which manipulates both regional and national markets. In spite of the huge number of viewers, TV stations choose ‗safe‘ content to broadcast, and TV production companies can only sell their productions to state-owned TV stations for a very low price. On the other hand, there is no particular Act or law governing the media industries. SARFT can intervene in the market on the practical level via different regulatory means when it thinks it necessary. Accordingly, TV production companies need to play safe with their production and produce products acceptable to the ideological climate. The safest way is to make subtle changes on the basis of copying successful programs from other countries or regions instead of creating their own genres and formats.

For most Chinese media enterprises, the domestic market is their primary target. However, because the domestic market doesn‘t reward creativity as it should, a media product must meet criteria in three respects in order to succeed in the market: recognition from the government; financial support from investors; and the cultural elites‘ praise (Yang, 2005, p. 26). Concern for quality always comes last. Accordingly, Chinese media enterprises and practitioners prefer short-term growth above all else and avoid any high risk activities because one can never predict what the proper action is and where the boundary lies.

The Chinese government and media companies emphasise the importance of internationalisation. The government conducts research on international

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development to see if they are on the right track; media enterprises are open to international competition and collaboration. Nevertheless, China‘s media industries develop in an inward-looking way. The government implements its own rationale for regulation based on ideological concerns. Most media companies focus on the domestic market, although they claim that they have made plans for internationalisation33. The production quality is compromised by the pursuit of short-term interests. Media professor at Tsinghua University, Yin Hong, observes that only two-fifths of the films made each year can be sold to cinemas and circulated in the market, although production increases every year (Yin & Cheng, 2011). In the TV sector, researchers at CUC, Hu Zhengrong et al, also find that the rebroadcasting of old programs is rampant in China‘s TV industry and that China‘s TV sector is full of program cloning and homogeneity and severely lacks innovation and creativity (Hu, et al., 2011).

International media conglomerates are after China‘s huge domestic market. In turn, China‘s own media export capacity is crippled by low production quality. The inward-looking tendency of development persists (although statistical data released by SARFT looks quite exciting on the surface). The increasing significance of the African market in China‘s TV product export is more likely the result of the quid pro quo in the political relationships between China and African countries. According to Yin Hong, the data shown by SARFT is indeed a reflection of China‘s international cultural exchange rather than cultural trade (Yin & Cheng, 2011, p. 197). Films performing well in the international market tend to be co-productions with Western companies, whereas the poor

33 This observation is based on my interviews with media companies in Beijing. They are positive to the internationalization. However, almost all of them don‘t have a feasible plan or timeline for the internationalization process.

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international box office of purely domestic productions illustrates the Chinese film industry‘s shortage of talent, especially those with international experience in film production, coordination, distribution, exhibition and marketing. For instance, the China–USA coproduction, The Karate Kid, which was distributed by Sony and Columbia in North America, achieved a box office of USD 176 million and comprised nearly half of the overall overseas box office of China‘s film industry in 2010. In contrast, Zhang Yimou‘s A Simple Noodle Story (sanqiang paian jingqi), only achieved a box office of USD 190,000 in the USA in the same year, although it was the highest box office earner in terms of domestically-made commercial films exported overseas.

Due to China‘s complicated bureaucratic system and local protectionism, government actions in Mainland China are ‗a defensive embrace of bureaucratic fiefdoms‘ (Curtin, 2010a, p. 21). CCTV is tied to the central government, whereas provincial, city and county television stations are closely linked to local governments on their level (although they still need to listen to the central government in terms of overall guidance and ideological advocacy). They are commissioned by government in their respective domains to accomplish their political task and to achieve their economic goals. Due to local governments‘ political concerns, language differences and various cultural preferences in different regions, China‘s TV market is further fragmented. So when Western media companies come to China, they are not only battling with CCTV, the national media network, but also the dozens of local TV stations in the marketplace. Moreover, government actions in relation to media enterprises, especially supposedly enabling actions, are sometimes made only to fulfil the governments‘ political ambitions and to burnish their reputation. The CCTV International Media Industry Cluster is an example, illustrating Beijing Municipal Government‘s ‗face job‘ (mianzi gongcheng). From this perspective,

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the competition in the TV market is not a fair game, and this problem is rooted in the structure of the whole system.

Similar things happen in the film sector. In China‘s film industry, the market order is disrupted by the favouritism displayed by government towards certain film companies, directors and topics. The China Film Group Corporation is not only a commercial film enterprise, but also an appendage of the central government. As a result, it is the biggest beneficiary, and its market conduct is facilitated by the government‘s favouritism. This can be best illustrated by the dispute over the schedule arrangement from the end of 2009 to the beginning of 2010 in China‘s film market. According to an anonymous informant, the Hollywood blockbuster Avatar was supposed to air in late December 2009 but was postponed to 4 January 2010 in order to leave the Christmas period for two films, Bodyguards and Assassins (a Hong Kong–China Film Group Corporation co-production) and A Simple Noodle Story (directed by Zhang Yimou). Following this, cinemas all over the country were told to stop screening the 2D version of Avatar on 22 January, the day when China Film Group Corporation‘s production Confucius (Kongzi), was released. A problematic market is fostered which ‗tends to marginalize the interests of audiences, to discourage industrial reorganization, to limit capital investment, and to frustrate technological innovation‘ (Curtin, 2010a, p. 21).

Competition between state-owned media organisations, domestic private media companies and non-Chinese media companies is in fact a competition between the government, domestic private companies and non-Chinese media companies. Given the size of the state-owned media organisations and the influence of government policies and actions with explicit favouritism, domestic private enterprises and non-Chinese media companies need to conform to the official policies and practices of the Chinese government lest they be locked out of the

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Chinese market. Curtin observes that Western media conglomerates are not so optimistic about the commercialisation reform of China‘s media industries and scale down their Mainland operations. Some of them are redirecting their resources to other Asian markets. For instance, Murdoch‘s News Corporation focuses more on the Indian market now. But those international media companies that adapt to China‘s local circumstances, such as MTV, can indeed succeed (Fung, 2006, 2008). As for Taiwan and Hong Kong media enterprises, they tend to continue to engage in joint ventures with Mainland companies since Mainland China is their biggest market target. Furthermore, under these circumstances, Chinese media professionals are forced to invest most of their time and energy in dealing with a lot of conflicting interests rather than focusing on product innovation to suit the rapidly changing tastes of audiences. Li Haibin, who has been working as the casting director in China on the Australian directed Mao’s Last Dancer, reflected:

The media situation in China is very impetuous… In contrast to Western

film companies, people here only want to find the shortcut to making

money and never bother to stop and think about how to make a good film…

There is still a long way to go for China‘s media industries.

(Interview with Li Haibin, 2009)

7.3 Beijing as a media capital in the Greater China media market

Curtin has made some observation of Beijing‘s potential to become a media capital in the Great Chinese media market (Curtin, 2007, 2010a, 2010b, 2010c). He clearly argues that despite its global aspirations, Beijing is not a media capital but rather a national node of state policy and patronage (Curtin, 2010a, p.

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26). He (2010a) has generalised that successful media capitals—such as Hollywood and Bombay—have operated at arm‘s length from the state, catering to audience interests rather than the government‘s. Successful media capitals emphasise commercial imperatives and rapidly changing audience tastes so that producers tend to avoid aligning themselves too closely to powerful patrons and official culture. Therefore, despite Beijing‘s aspiration to become the centre of China‘s media industries, Beijing‘s creative productivity is diminished by its heavy political atmosphere and the oppressive official oversight. Accordingly, Beijing won‘t be able to become the centre of China‘s commercial media sector, although it will still exercise its powerful influence over state-sanctioned media.

In fact, Shanghai and Guangzhou, the two cities where Curtin believes there is a robust ensemble of media enterprises and a distinctive regional culture, are more likely to win capital status once the government loosens its hold on the entertainment media industries. Meanwhile, financial resources, infrastructure and geographical reach are significantly constrained by official national policy. According to this view, a Great Chinese media market with multi centres will be formed, one in which Beijing will still retain its paramount status in government-owned media, while Shanghai-Taipei and Hong Kong-Guangzhou will be the locations of commercial media aiming at diverse audiences worldwide.

However the facts indicate otherwise. Not only the state-owned media organisations, but also commercial media enterprises, both domestic and international, continue coming to Beijing if they are aiming at the Mainland China market. Among the domestic media enterprises, nearly all private media companies are based in Beijing, especially film companies. Although two famous private media companies, Huayi Brothers Media and Hairun Movie & TV Group, both registered subsidiary companies in Zhejiang Province, these are

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strategically designed to take advantage of the local tax deduction policies. The two companies‘ head offices remain in Beijing. Even Hunan Dianguang Media, which owns one of China‘s most popular provincial TV stations, Hunan Satellite TV, came to Beijing and opened a film company in 2010. Nowadays, most Hong Kong films are not only made in large part for the Mainland market, but also, studios, filmmakers, crews and talent are increasingly based in Beijing (Pang, 2010, p. 140).

According to Lu Jia and Shaun Chang, more and more Taiwanese media companies and professionals are also shifting to Beijing seeking opportunities. Australian Brendan Harkin also moved his company, X Media Lab, from Shanghai to Beijing recently, and his business has grown significantly since then. The co-director of Movingcities34, Bert de Muynck observes a blooming fashion scene in Beijing, which, as a political capital, would be deemed by Curtin to be an environment oppressive to creativity. Bert de Muynck contends that Beijing is a place that combines the presence of media, other creative talent and a wide variety of subcultures. (Interview with Bert de Muynck, 2011) It is evident that Beijing continues to absorb media enterprises and personnel and nurture creativity.

In addition to the agglomeration of business and personnel, there is significant grassroots media activism in Beijing; the liveliness of the grassroots media environment is reflected in various independent media activities. There are over

34 Movingcities is an independent research organization investigating the role that architecture and urbanism play in shaping the contemporary city. More details can be found at: http://movingcities.org/

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one hundred registered hosts of film activities in Beijing on Douban Location35 which provides users to share and discover local events and activities; most of them are film clubs, independent documentary centres, or cafes featured with films including Broadway Cinematheque MOMA, the first art-house cinema in mainland China under the Broadway Circuit operated and managed by EDKO Films Ltd in Hong Kong. Nearly 90 film activities are organised in Beijing every week according to Douban Location whereas only around 30 in Shanghai.

Seminars and dialogues with directors, producers, actors, and academics are normally arranged for participants after watching Chinese and foreign independent documentaries and art films which are rarely exhibited in mainstream cinemas. Furthermore, in order to promote their culture and language in China, foreign embassies and cultural associations in Beijing, such as British Council and Goethe-Institut, organise cultural and media activities either free or at a very low price. Information, knowledge and skills are exchanged between media professionals and audiences. The diversity of media in Beijing is also enriched by marginal groups, such as rural migrants and artists.

The dynamics driving media enterprises and talents to Beijing are more complicated than Curtin has observed; there are four reasons for the divergence between Curtin‘s observation and actual development in Beijing.

35 Douban Location is a content of douban.com, which is the most popular interest sharing and social network service website in China. More details can be found at: www.douban.com

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7.3.1 Adaptive informal institutions

Curtin maintains that, in the Asian context, political stability or expressive freedom are the baseline requirements for the emergence of a media capital (Curtin, 2007, p. 288). He reflects that the popular culture in Hong Kong during its prime, Taipei‘s rising cultural force when popular passions regarding the end of martial law spilled over into the rapidly proliferating media outlets of the 1990s and the Singaporean government‘s embrace of liberty and creativity demonstrate that stability and liberty have been persistently attractive to creative labour in the Chinese screen industries. But according to Curtin, Mainland China is a ‗treacherous terrain‘ (Curtin, 2010a, p. 24) for media companies, with ambiguous policies, political favouritism, censorship, piracy and a lack of financial transparency being among the most common concerns. By creating a complex operating environment that helps to keep foreign capitalists at bay, the Chinese government intends to gain time for domestic media industries to grow strong enough to fight with Hollywood media conglomerates. But such a fickle environment discourages media talents, who require a stable policy environment, and undermines the development of media enterprises, both domestic and international.

Hence, for media enterprises aiming at Mainland China, a locality where they can find liberty and expressive freedom is crucial. Instead of Shanghai and Guangdong Province, which are nominated by Curtin, I argue that Beijing is the potential locus due to the ‗adaptive informal institution‘ (Tsai, 2006), a force that Curtin pays little attention to. Based on her observations on the dynamics of private sector development in China since the late 1970s, political science professor Kellee Tsai argues:

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Under certain circumstances, the etiology of formal institutional change lies

in the informal coping strategies devised by local actors to evade the

restrictions of formal institutions… Formal institutions comprise a myriad

of constraints and opportunities that may motivate everyday actors to devise

novel operating arrangements that are not officially sanctioned. With

repetition and diffusion, these informal coping strategies may take on an

institutional reality of their own… In contrast to deep-rooted, primordial

informal institutions, which tend to resist change, the resulting norms and

practices can be called adaptive informal institutions because they represent

creative responses to formal institutional environments that actors find too

constraining. Wide-spread use of adaptive informal institutions may then

motivate and enable political elites to reform the original formal

institutions…

(Tsai, 2006, pp. 117-118)

The adaptive informal institutions are embodied in various acts based on social relationships (guanxi) in Chinese society. Traditionally, society in China is a hierarchically structured order covered by interconnected social relationships. Private and public matters are not yet legally organised and safeguarded; a person‘s function in a vertically organised society is very significant (Heberer, 2007). Reform has led to a significant expansion of guanxi rather than a decreasing tendency.

The strong orientation towards a market economy combined with the

simultaneous retention of the party‘s monopoly of power has led to more

fostering and development of guanxi in the form of an explosion of

gift-giving and hospitality, including significantly higher costs for

individuals and institutions.

(Heberer, 2007, p. 276) 207

The foundation for guanxi is shared experience and emotional bonding and it is accordingly deeper than those relationships which are built up simply during work. Establishing and maintaining guanxi requires a high degree of sociability, especially constant contacts with key people. The social, political and economic use of guanxi is proportional to the extent of a relationship. The deeper the relationship, the bigger its utility. Though the guanxi between entrepreneurs and government officials is responsible for the corruption often seen in China, it is an indispensable facilitator for entrepreneurs to secure their business and interests in the insecure socio-political environment in China. Accordingly, many media enterprises in China need to make constant contacts with the government, i.e. SARFT, in order to push their own interests. As Zhou Hao, director of Beijing Golden Screen Culture Communication Co., Ltd reflected:

I hang out with officials of SARFT regularly, as well as officials at the

Ministry of Culture and even the Propaganda Department of the CCP

Central Committee. Inviting them to dinner is a kind of cultural input…

because you can make money only when you correctly understand policies.

(Interview with Zhou Hao, 2009)

According to him, during his interaction with government officials, he can always get useful hints in terms of what the government is thinking and what the next step might be. Hence, guanxi not only informs him about policy changes, but also enables him to prepare for possible changes in advance.

Furthermore, China‘s bureaucratic system does not include a formal channel which allows the people‘s voice to be directly heard during the decision making process. In Western countries, industry associations, such as the Screen Producers Association of Australia (SPAA), have developed the capacity to 208

lobby the government in order to influence public policies (see Johnson, 2011). But there is no presence of strong industry associations or groups in China, since all of them are established and managed by the Party. Therefore, guanxi is commonly adopted by entrepreneurs to influence government policy-makers, negotiate with government and even persuade government to push reform in the direction they want. Especially in China‘s media regulatory system, there is no particular law or Act governing media industries. Rather, SARFT constantly changes media-related policies and regulations in order to maintain a harmonious society and, more importantly, to serve the central leaders‘ ideas and objectives. Rather than being a routinised and professional system, policy-making and implementation in China is a highly specific and personalised endeavour (Breznitz & Murphree, 2011, p. 11) rooted deeply in the structure of the system.

According to Tang Haifei, producer at China International Television Corporation, the lower the official‘s level in the bureaucratic system, the more conservative she or he is. In order to keep their positions in the government, officials have to play safe and interpret central leaders‘ intentions cautiously to prevent any trouble that may irritate central leaders; officials on the execution level do not dare to challenge the boundaries of the central leaders who are several levels higher than them. (Interview with Tang Haifei, 2009) This is why Curtin finds that ‗execution at the local level is open to a range of interpretation further fragmenting the patchwork of interests that sustains the status quo by frustrating innovation, creativity, and entrepreneurial activity‘ (Curtin, 2010a, p. 21). In addition, the different interest groups existing within the Party increase the complexity of policy-making and implementation.

Where the situation involves ‗ruling by person‘, the issue of media policies is in fact an issue of politics. One can win the first-mover advantage and take the lead

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by exerting a bigger influence on government via adaptive informal institutions. Over time, those isolated adaptive responses of the government to industry development evolve into adaptive informal institutions, the ‗regularized patterns of interaction that emerge as adaptive responses to the constraints and opportunities of formal institutions, that violate or transcend the scope of formal institutions, and that are widely practiced‘ (Tsai, 2006, p. 125). In this sense, adaptive informal institutions bridge the gap between media companies that need policy support from the central government and the central government, especially the central leaders, who are eager to develop China‘s media industries. According to Tsai, adaptive informal institutions are formed and thrive in places where the interests of the enforcers of formal institutions and the creators of informal adaptations converge (ibid, p. 126). Hence, media professionals need to be in Beijing to establish guanxi with government officials in order to negotiate for their desired outcomes. More importantly, they benefit from being there because during interactions with government officials the adaptive informal institutions gradually form. According to Qian Chongyuan, the distribution director of Beijing Forbidden City Film Company ‗…your feedback is appreciated by the government and impacts on measures they take in the future… in this way your desired changes will happen sooner or later‘.(Interview with Qian Chongyuan, 2009)

7.3.2 Continuous adaption and convergence of the media regulatory system

Curtin points out that, under the cover of commercialisation reform, forces of socio-cultural variation in Mainland China shape the deployment of capital, the creation of content and the distribution of product, all of which aim to strengthen the government-owned media organisations and exploit commercial

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activities in the interest of the Party (Curtin, 2010a, p. 23). As a result, it is difficult for private media companies aiming at the Mainland market to survive, given the size and influence of government media institutions. Although joint ventures and co-productions have provided some opportunities for private media enterprises to break out of these constraints, in 2003, the central government announced three formal measures: Temporary provisions on foreign investment on cinemas; Administrative provisions on Chinese-foreign co-producing films; and Administrative provisions on Chinese-foreign co-producing TV drama., According to Curtin, these new restrictions on foreign media ‗are part of a cyclical pattern of liberalization and retrenchment that discourages innovation‘ (Curtin, 2007, p. 283). However Curtin‘s conclusion neglects the continuous adaption and convergence of China‘s media regulatory system.

Indeed, the nature of China‘s political economy has changed from the old party-state of the 1950s and 1960s to a bureaucratic-authoritarian regime or a capitalist developmental state (c.f. Baum & Shevchenko, 1999; Tsai, 2006, p. 141) and one reflection of this transition is to embrace the development of the private sector. However, the government reforms the whole system in an unsteady way along with its own evolution, and the interaction and confrontation of formal institutions and informal institutions is the root cause. Similarly, in China‘s information technology industry, Breznitz and Murphree observe that ‗the institutions that govern China‘s economy, and the political battles that fashioned its evolutionary change, both stimulate and constrain the opportunities available to entrepreneurs and companies‘ (Breznitz & Murphree, 2011, p. 20). Therefore, the trajectory of reform in China is always ‗trial-and-error economic experimentation led by subnational entities but fashioned by political contestations between conservatives and reformers at the centre‘, rather than a progress ‗carefully orchestrating its industrial development‘ (Breznitz & Murphree, 2011, p. 20). According to Liu, the deregulation process

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in China‘s TV industry has happened gradually, and the government is cautiously opening the door of the market (Liu, 2011). In the film sector, the government has begun to study and respect market laws, which can be demonstrated by the government‘s follow-up measures regarding the furore over the rescheduling of the Hollywood production Avatar and the Chinese blockbuster Confucius from the end of 2009 to the beginning of 2010. Due to the low attendance for Confucius and the high demand for Avatar, the Chinese government later reversed their decision and allowed Avatar to remain on some 2-D screens in China. Despite the inconsistent pace of reform and the erratic development of reform, the Chinese government continues to make progress, albeit with path dependency based on the nature of a bureaucratic-authoritarian regime or a capitalist developmental state.

Domestic media companies also experience the government‘s transition to media marketisation. State-owned media companies especially are forced to adjust themselves to accommodate the transition. Qian Chongyuan recalled:

We used to get money very easily from the government as long as we

submitted some shooting plans which were mainly main melody films of

socialism. But nowadays it is getting more and more difficult for this kind

of plans to be supported.

(Interview with Qian Chongyuan, 2009)

The Chinese government is slowly changing its media regulatory system towards an international model, but it remains a model underpinned by adaptive informal institutions.

Interestingly, during the adaptation and convergence of China‘s media regulatory system, the central government has always distinguished Hong Kong,

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Taiwan and Macau from the general concept of foreign countries in most policies due to political concerns. The three regions have been given special preferential policies, even when rigorous limitations are made for non-Chinese media companies: foreign capital can‘t exceed 49% in joint-venture film companies and cinemas with the exception of capital from Hong Kong, Macau and Taiwan; once they have passedcensorship, Hong Kong Taiwanese film product will be able to screen in Mainland China without being counted in the annual quota on film importation which applies to all the other countries and regions in the world; Hong Kong–China and Taiwan–China co-produced TV dramas are treated the same as domestic productions; and media personnel from Taiwan and Hong Kong are encouraged to come to the Mainland and participate in TV and film production. Moreover, the central government also distinguishes domestic private companies from foreign private companies. While the government remains very careful of Western private companies, the tendency to treat domestic private companies in the same way as the state-owned media companies is increasing. For example, in the ‗Guiding opinions on promoting the film industry development‘releasedby the State Council of China in 2010, it is explicitly stated that ‗[domestic] private film companies should be treated the same as state-owned film companies, regarding investment, land utilisation, taxation policies, financing and international trade‘.

Thus, Hong Kong and Taiwan, both regions which have significant political implications for Mainland China, and which share the same root culture as the Mainland, enjoy the central government‘s favouritism due to the government‘s political concerns and their acknowledgement of Chinese culture; by contrast, the central government is highly alert to non-Chinese companies and regards them as a threat to the country‘s cultural security. Moreover, the government‘s ‗nationalism‘ leads to an increasingly tolerant and supportive attitude towards domestic private companies as the government gradually recognises the power

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and potential these companies have. As elaborated in Chapter 3, while experiments in media reform are usually initiated outside of Beijing, success at the national level or beyond can‘t be achieved without the central government‘s consent and support. Nowadays, media enterprises in China must aim at the national market, since competition is becoming increasingly severe. Therefore,by being close to the central government, media companies can do bigger business or make bigger decisions since ‗once investors get strong support from the central government, central authorities will help persuade stubborn local officials or help solve local problems‘ (cited in Breznitz & Murphree, 2011, p. 105).

7.3.3 The generational transition of power in Chinese film directors

Curtin argues that in Mainland China, the private media sector suffers from government censorship and a lack of investment capital; whereas national media conglomerates, such as CCTV, are conservative in regards to creativity and innovation because their headquarters are located in Beijing and therefore their content is closely monitored by the central government (Curtin, 2007). Especially in the film sector, successful films of recent years have tended to be blockbusters produced by a relatively small circle of directors with international investment partners, while small to medium sized indie productions gain little exposure at home(Curtin, 2007, p. 283).Furthermore, in spite of the rapid injection of massive investment from both the private sector and the government, the lack of experienced talent in the areas of finance, planning, coordination, distribution, exhibition, and marketing leads to a situation where the majority of investment is wasted on low-quality productions which can‘t be sold anywhere.

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It is not only the mainstream commercial media, but also the indie media that have significance. Curtin emphasises the significance of those indie media talents who are active in niche or even non-commercial creative venues, and contends that ‗a city‘s ability to attract creative labour and make effective use of it seems to rely on not simply the number of creative venues but the diversity of them as well‘ (Curtin, 2007, p. 288). Hence, the state-controlled institutional structure in Mainland China, along with the legacy of authoritarian leadership, does not allow for new cultural forms to percolate up from the grass roots (Curtin, 2007, p. 284). In particular, the proportion of government agencies in Beijing is greater than in other cities in China, and this creates such a strong political atmosphere that creative development is discouraged. Hence the lifeline of media industries, a mechanism for discovering and transferring new forms and ideas into the mainstream is lacking in Beijing.

But what Curtin doesn‘t notice is the generational transition of power in Chinese film directors. Though the fifth generation film directors still have massive box office appeal in the domestic film market, the sixth generation film directors have emerged. Unlike the fifth generation directors who are now addicted to commercial blockbusters and have seemingly stopped providing critical commentary on contemporary socio-cultural problems in China, the sixth generation directors, including Jia Zhangke, Wang Xiaoshuai, Zhang Yuan, Zhang Yang, Wang Quanan, Ning Hao, Lou Ye, and Lu Chuan, most of who have been based in Beijing since they graduated from Beijing Film Academy in the 1990s, have produced an edgy underground film movement in China, and focus closely on contemporary urban life, especially on those affected by disorientation, rebellion and dissatisfaction with China‘s contemporary social tensions(Corliss, 2001). Their early work was mainly circulated in the international art circuit and exhibited at international film festivals.

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The black market and indie film salons in Beijing, plus Beijing Film Academy and The Central Academy of Drama (house the sixth generation directors‘ work for the purpose of teaching) disperse these films in Beijing (the area where Beijing Film Academy is located is a famous black market for art film DVDs). Gradually, an underground film circle has formed in Beijing. In the meantime, as the sixth generation film directors are further exposed internationally and keep winning international awards, many receive bigger investment from domestic film companies and international film groups. Though their subsequent movies are more and more commercialised, they still maintain a particular interest in marginalised individuals and the less represented fringes of society.

Notably, investment in the sixth generation directors comes mainly from film companies located in Beijing, and some of it is even made by China Film Group Corporation, which tends to favour ideologically safe and widely popular directors and productions, according to Curtin (2010a, p. 22). In addition to producing films with the sixth generation, China Film Group Corporation has launched several young director development plans to establish its own reserve of talent for future development while conducting its task as an appendage of the state. Therefore it is not accurate to equal Beijing‘s political atmosphere to an environment incapable of accommodating diversified cultural content and forms. On the contrary, since the national media policies in Mainland China don‘t provide enough space for cultural diversity, one can find channels to penetrate political barriers in Beijing, since there are cultural resources, distribution circles, exhibition spaces as well as financial support. Sometimes, the state-owned media organisations are also involved in the process because they, as participants in the media marketisation which the government is determined to deepen, need to explore talent and to continuously create new content and forms along with the deepening of reform of media commercialisation.

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7.3.4 Audiences and other issues in the Mainland TV market

Although China‘s media industries don‘t suffer a shortage of capital any more, quality is still the biggest problem. In the TV sector, low-cost genres tend to prevail and thus a cloning culture is formed, encouraging endless imitation (Curtin, 2007, p. 283). The slow growth of the creative ability of domestic media companies cannot keep up with the rapidly increasing market demand. On the other hand, domestic audiences are more exposed to Western media products via video websites, unauthorised satellite channels, pirated DVDs and internet downloading (Curtin, 2007, p. 284). By focusing his comparison on the narrow range of programming available on Mainland TV, Curtin tries to indicate that the domestic production in the Mainland TV market is vulnerable. Faced with the emergence of new media, which involve more interaction and proactive participation, the TV industry is supposedly losing audiences in China, as a result of a type of passive consumption. However, according to CSM Media Research, TV viewing time has been very stable in China since 2001. But interestingly, the age structure of TV audiences in the Mainland market has changed a lot: the over 55s account for the majority of the national audiences (Chen & Zhou, 2011).

Audiences over 55 years of age in China are very conservative, because their ideological legacy exerts a strong influence on Chinese people in this age group. The traditional education they received and their life experience leads to their preference for traditional value rather than the edgy and trendy non-Chinese productions. According to Curtin, TV service must insinuate itself into domestic settings, as in the TV sector, forces of socio-cultural variation have more influence (Curtin, 2007, p. 279). Because of the issue of cultural proximity, Western companies shouldn‘t be over confident of their advantage when competing with domestic media companies in the Mainland TV market, even if

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the Chinese government loosens its control over media industries completely, which is highly unlikely in the foreseeable future.

Furthermore, Curtin‘s media capital notion is partly based on the argument that media products are distinctive prototypes (Curtin, 2007, p. 13), and therefore media conglomerates in Hollywood still keep a firm hand on the generation and ownership of intellectual property (Miller, et al., 2001) in order to maintain the distinctiveness (the prototype). However, this view has been challenged by Moran and Keane (Keane & Moran, 2004) who argue that contemporary media products contain interchangeable elements. The process of copying formats and interchanging elements is more and more evident, and in the area of the creative industries, products are gradually moving beyond the jurisdiction of the traditional IP concept. Thus the definition and function of piracy needs to be redefined along with technology development and the evolution of innovation. According to a BBC report, British Prime Minister, David Cameron, recently announced that Britain‘s intellectual property laws are to be reviewed to ‗make them fit for the internet age‘36. In fact, more and more Chinese media companies are starting to collaborate with new media, for example, by selling TV dramas and program to or co-broadcasting them with video-sharing websites, and some of them have made a success in the market. Therefore Curtin‘s concernthat companies find it difficult to sustain the artificial scarcity that is the basis for pricing media services and artefacts (Curtin, 2007, p. 284) seems less worrying in reality.

36 The BBC report ‗UK copyright laws to be reviewed, announces Cameron‘ is retrieved on

2nd August, 2011 from: http://www.bbc.co.uk/news/uk-politics-11695416

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7.4 Beijing’s advantages and challenges

Curtin contends that media capitals tend to emerge where opportunity, prosperity, expressive freedom and rich cultural resources converge. Media industries in Greater China confront challenges in financing, production, distribution and exhibition (Curtin, 2007). However opportunity, prosperity, expressive freedom and rich cultural resources come together in different ways. In Beijing, under the guidance of the government, the interaction of formal and informal institutions constantly occurs. During these interactions, media enterprises, talent and cultural resources are integrated into the spatial dynamics, further directing the centripetal tendency of production and the centrifugal force of distribution and creating a tolerant environment for cultural diversity.

The mechanism can be illustrated by the changing relationship between government and industry, both of which evolve along with the development of their mutual relationship. In addition to regulating, the other function of policies is to enable. Being in Beijing, the media regulatory centre, not only implies being close to the government‘s regulation but, more importantly, also endows enterprises with closer access to enabling government actions. Further, via the adaptive informal institutions, which require constant and direct contact between media companies and the government, media enterprises stimulate the evolution of the government which supplies media companies with further development space and enhances the freedom for media talents to continuously create and innovate. In turn, the development of media companies is fuelled by the evolving government regulatory system. Accordingly, media companies will raise more requirements and inform the government via the informal institutions. In this sense, an open-ended evolutionary spiral is formed between media companies and the government.

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Curtin argues that the dynamics of media agglomeration are stable once formed and thus locales that fail to make an early start are subject to ‗lock-out‘ (Curtin, 2010a, p. 5). However, although Beijing provides a model of relationship building between government and media industries, in the long term the Beijing model requires systemic change. These changes include fostering an increasingly competitive media market; allowing a more open attitude towards media industries; and recognising opportunities engendered by media convergence.

Undoubtedly, political factors at play in Beijing are at odds with global media capital aspirations. Beijing, as the national media centre, is attached to the aspiration of an international media capital by the government. Actions made by the government including policies, plans, investment, and infrastructures have been incorporated into the political force that is constructing Beijing‘s media capital status. Nevertheless, as the centre of state power, Beijing is less likely to become a global media capital according to Curtin, since ‗media capitals tend to flourish at arm‘s length from the centres of state power, favouring cities that are in many cases disdained by political and cultural elites‘ (2011). The entrenched state intervention into media, while generating political force and accelerating the centripetal trend of media industries in Beijing, reduces Beijing‘s attractiveness to media companies and workers whose pursuit for openness and freedom grows along with their own development.

As a result, it is difficult to directly apply the media capital model in Beijing. Both media companies and workers are reluctant to leave Beijing although they know that they need to find another location for creativity. For example, Li Yan, the freelance director, said: ‗I want to live in Yunnan Province to create for two months every year where I can find bigger space for creativity when my career becomes better in Beijing‘. (Interview with Li Yan, 2009) In Luo Xuan‘s

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business plan, he wants to open a branch in Wuhan which focuses on creating content while keeping the Beijing office for business operation. (Interview with Luo Xuan, 2009)

Furthermore, profit is the top-ranking pursuit for media enterprises as commercialised organisations. The Mainland market remains the biggest market for media companies in the Great Chinese community. Hence, seizing business opportunities in the Mainland market is of strategic significance to media companies in the Greater China community. Accordingly, to a great extent, the agglomeration tendency in this stage is driven by the appeal of the Mainland market, which is defended by the government‘s policies. Under the current circumstance, in order to succeed in the Mainland market, media companies must be sensitive to official policies, which invariably aim to insure state leadership and the supremacy of the Communist Party; this undermines the exportability of their productions. Furthermore, Beijing‘s (formal and informal) political institutions and spheres of uncertainty shape growth that is oriented towards short-term interests and facilitate limited innovation. But, although still influential, the new characteristics of China‘s media industries decrease the territorial power of government policies over media circulation and consumption along with the enhancing of market force. Instead of protectionism, the government should focus on supply, encouraging the capacity to sustain creativity and innovation.

According to Michael Curtin, media capital is geographically relational (Curtin, 2007, p. 285). Therefore in the next chapter, I will elaborate on the relationship of Beijing, as an emergent media capital, to other important nodes in the Great Chinese media field, in order to revise and modify Curtin‘s media capital notion for a better ‗fit‘ to Chinese media industries, which is the conclusion of this

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thesis. I will also discuss the implications and limitations of this research and directions for further study.

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Chapter 8: Conclusion

In previous chapters, I have described the development of the audio-visual industries in the People‘s Republic of China to show how media enterprises, professionals and the Chinese government interact and evolve in Beijing‘s political, economic and cultural environments, and to identify Beijing‘s potential to become a media capital. I have found that in Beijing, the political capital of China, media industries are experiencing a transition from a completely state-sanctioned sector ‗creating enclaves of ―indigenous‖ production and topographies of national circulation‘ (Curtin, 2010a, p. 13) to a quasi market-oriented economy in which state-owned media companies, private media companies and overseas media companies collaborate and compete under the supervision of the state government. I have also found that despite an evidently constrained capacity to innovate and export, nowadays, Beijing is the destination to which Chinese media resources and talent are flowing.

In this concluding chapter, I will summarise and evaluate the findings from previous chapters in order to answer the research question of this thesis: What are the possibilities of Beijing becoming a media capital?

8.1 Positioning Beijing in Chinese media industries

Until recently, the media capital of the Chinese media market was Hong Kong. However as Hong Kong‘s status wanes, Beijing is gradually showing potential to be a media capital. As shown in Chapters 4 and 5, it has learnt to embrace international media companies, especially those from Hong Kong and Taiwan, while nurturing Mainland China‘s own media force. Nevertheless, Beijing offers a distinctive model of connecting the global and local capitals due to the

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organisational specificity of media industries in China, namely the coexistence of state-owned institutions and commercial organisations (see Chapter 2). While this is consistent with Curtin‘s description of Beijing as ‗strongly influenced by national policy guidance‘ (Curtin, 2007, p. 285), it does not consign Beijing forever to administrative status. The Chinese government is aware of the value of media industries: on the one hand it successfully constrains the autonomy of the media industry for its political purposes. All media companies in China are domesticated into the Chinese environment, whether they come from Guangzhou, London or Seoul.

But on the other hand, Fung‘s research on multinational media corporations in China (Fung, 2008) shows that the Chinese government‘s intention is more than to simply secure ideological security by taming international media companies. At this stage, the key problem for China‘s media industries is no longer the lack of funding (see Chapter 4); rather, it is how to make better use of the existing capital from the government and the private sector to produce and export distinctive content appealing to international audiences; this is something the Chinese government has always intended to achieve but has not yet succeeded in doing so.

In the meantime, the Chinese government receives and uses the de-centred, de-territorialising nature of global capital to help China‘s own media companies, state-owned as well as private (Fung, 2008, p. 186). For example, in Chapter 4 I have demonstrated that, in addition to the government‘s direct investment, CCTV‘s rapid expansion in other countries is assisted by local media companies. In Australia, subscribers to Foxtel cable television can access CCTV-4, brought in by Australia‘s Telstra; CCTV English Channel is broadcast via Sky TV in New Zealand; and cable TV subscribers in Korea can access CCTV English Channel promoted by KBS, Korea‘s biggest television network. Those media

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companies‘ assistance is not given for free. In return, they are given various facilities to assist their operations in the Mainland China media market, such as co-production, market access and joint-venture opportunities. Fuji Television Network, the most influential Japanese commercial TV station, which co-established Daifu TV (dafu dianshitai) with CCTV to promote CCTV-4 in Japan in 1998, has been assisted greatly by CCTV to produce several TV programs and documentaries.

Despite dissatisfaction and resentment at China‘s ideological control and ambiguous regulatory system, international media companies still maintain their interest. Curtin has observed that some Hollywood companies have scaled back their Mainland operations due to China‘s complicated policies and fragmented regional markets, while Taiwanese and Hong Kong companies continue to engage in the Mainland market (Curtin, 2010a). Yet, although Curtin is correct in saying that government intervention is responsible for Western media companies‘ withdrawal, we should also recognise that, behind the scenes, it is market forces that are really at play. For Hollywood media companies, which are thoroughly globalised in their operations, the cost of penetrating a new market is probably equal to or even lower than the corporate effort that they have to make in order to stay in the Mainland China market. Rupert Murdoch‘s News Corporation invested billions in media ventures and public relations efforts before quietly scaling back its Mainland operations and redirecting its resources to other Asian markets (Curtin, 2010a).

For the Taiwanese and Hong Kong media companies that mainly serve the Chinese geo-linguistic market, it is a different story. Taiwanese media companies are subject to ferocious competition and audience fragmentation in their local market (Curtin, 2010a, p. 26) and thus have to reach out to the huge Mainland market. Hong Kong media companies are suffering from the market

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downturn and the outflow of talent and hence must find a bigger pool of media workers and a more prosperous media market, which is the Mainland offers as well. As such, the Taiwanese and Hong Kong media companies that are bonded to Mainland China by market forces have to adapt to rather than challenge Mainland China‘s authoritarian environment.

Consequently, Beijing is a necessary location for Taiwanese and Hong Kong media companies, as well as those Western media companies that still aim at the Mainland market, which fits Curtin‘s thesis. In Chapters 4 and 5, I have shown that Beijing is the preferred clustering location for most domestic media companies in China. It therefore offers the widest range of opportunities for companies from overseas to team up with domestic companies and the most convenient way for them to learn about the Mainland market, overcome regulatory barriers and build up cultural proximity with local audiences. Secondly, in Chapter 5 I also demonstrated that Beijing has the densest network of media talent in China. By operating in Beijing, companies can easily acquire media workers through the local labour market if they need to acquire additional talent and reduce labour costs. Thirdly, in Chapter 5 I showed that, as the national media regulation centre, Beijing provides the best location for coming to a rapid understanding of policies and engaging with policy and key decision makers.

Finally, due to the Chinese government‘s tendency to constantly change policies and devise complicated implementation procedures identified in Chapter 7, media enterprises from overseas need to establish good relationships with the central government and hence they come to Beijing.

These four reasons for choosing Beijing also demonstrate that most of these companies comprise a slice of the Mainland market. Beijing may be the best

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place to make connections, but it is not a place to innovate and prepare for the global media market. As a result, international companies in Beijing are not undertaking media export, which is the other important component of a media capital. Then are the domestic media companies carrying forward the mission of media export? Another way of saying this is: are the domestic media companies able to export media products across boundaries so as to complete Curtin‘s media capital formula? The striking contrast between the government‘s endeavours, as shown in Chapter 4, and the real situation, as revealed in Chapter 8 suggests a negative answer to this question. Apparently China‘s domestic media companies are not capable of producing exportable media products at this stage due to the government-regulated environment, which doesn‘t accommodate innovation, creativity and diversity. But despite the fact of China‘s export incompetency, we should also recognise the knowledge transfer from overseas media companies to domestic companies that is happening in China and which presages greater potential in the future.

As I have shown in Chapters 3 and 4, during the transition of China‘s media industries from shiye to qiye, especially after China‘s accession to WTO, foreign media companies attracted by the privileges offered by the Chinese government have assisted China‘s domestic media companies to expand overseas. More importantly, they have transferred enormous knowledge to China‘s domestic media companies with respect to formats, managerial operations and the international media market. Beijing provides the best learning space for domestic media companies while mediating the interaction between international media flows and domestic media forces. In the TV sector, the Mainland TV stations and companies accumulate experience in formats of entertainment shows and trendy dramas (ouxiangju) via co-production with Taiwanese TV companies. In the film sector, China Film Group Corporation, Huayi Brothers, and Poly Bona have enhanced their production capacity and

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marketing via co-production with Hong Kong film companies and talent as discussed in Chapter 5.

Dissatisfied with the Chinese geo-linguistic media market, since the 2000s, China‘s film companies have proactively embraced international investment and co-operated with Hollywood film companies to circulate their products in the global market. Poly Bona is now listed on the New York Stock Exchange. The well-received film Karate Kid, co-produced by Columbia Pictures, China Film Group Corporation and a few other international film studios in 2010, was distributed globally by Columbia Pictures, Sony Pictures and Disney. In Beijing, while international enterprises and China‘s domestic media forces are seemingly in opposition to each other due to the government‘s cultural security concerns, they need each other. This relationship is well catered for in Beijing. Beijing provides international media companies with the political and human resources they require to enter the Mainland market. Rather than being opposed to or frightened by competition brought by international companies, Chapter 5 has shown that China‘s domestic media companies hold the belief that they ‗enhance themselves by struggling while learning‘. International media companies coming to Beijing for the Mainland market are role models for domestic media companies to study and accumulate firsthand knowledge and experience during the communication and collaboration process

Despite the fact that domestic companies are gradually expanding their connections internationally, China‘s media industries still suffer from a lack of content diversity. The lack of diversity is mainly caused by the Chinese government‘s ideological control and old mindset as we have seen in Chapters 6 and 7. Hence Curtin argues that once the Chinese government substantially eases its control over media industries, Shanghai and Guangdong Province would be more prominent than Beijing in the commercial media sector, since

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Beijing‘s close association with politics constrains media companies‘ appeal to the mass consumers. I have argued in Chapter 7 that state policies, political patrons and official culture have been adapting themselves to the requirement of industry development, although such adaptation is rarely transparent and has some way to go.

In Chapter 3, I argued that the government is determined to continue to promote further media reform to encourage the reconstruction of China‘s media industries. During the process of reform, the Chinese government‘s rationales of control, predictability and convergence, which I have discussed in Chapter 7, adjust state policies, political patrons and official culture to facilitate this reform. The convergence has set the tone of the media reform, which is the interdependency between public and private sectors. The Chinese government applies different policies to state-owned media companies, domestic private companies, Hong Kong and Taiwanese media companies and Western media companies to take advantage of international media forces to build China‘s own media flagships rather than simply blacking out any possible danger that may be engendered by the competition. Moreover, political patrons are frequently adopted by the Chinese government to promote the development of selected media enterprises in various ways. For example, Chinese government‘s agenda of soft power contributes a lot to the expansion of China‘s satellite TV network internationally. CCTV‘s expansion and the development of Great Wall Platform are all conducted in the name of ‗soft power‘. SARFT and MoC host many international exhibitions and film festivals every year to facilitate media trading. SARFT even organises domestic media companies to attend international festivals or cultural exchange activities to display China‘s film production in different countries although not everyone, of course, enjoys the government‘s favour.

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In practice, the internationalisation and marketisation of China‘s media industries develops in a way that can be controlled by the government and in a direction that can be predicted. Problems, of course, are generated due to the regulatory environment, but informal institutions in Beijing offer channels for media companies to have their voices heard and their requirement for greater liberalisation included in state policies and reform debates. The ideal freedom scenario of Curtin—that the Chinese government will completely loosen its hand—is not going to happen; Beijing will keep absorbing media companies for economic as well as political reasons. Shaped by the joint force of the evolution of China‘s media regulatory system and the generational transition of power in media talent, and film directors in particular, content diversity is more and more tolerated within the official media culture—although most times in edited forms. Hence more and more of the underground cultures mentioned in Chapter 5 choose to come to Beijing, because, with a certain degree of compromise, there is a chance to be embraced by official culture and therefore a greater chance to enhance their influence in Beijing. Thus, on balance, I have argued that there is an overall advance in the quotient of socio-cultural variation, which in turn underpins Beijing‘s potential as a media capital.

Therefore, to answer the principal research question proposed at the beginning of this thesis, Beijing is not a media capital at this stage. However, as identified in Chapter 2, contemporary media products contain interchangeable elements. Although the global industry tries to maintain the distinctiveness (the prototype) of each media product and media conglomerates still keep a firm hand on the generation and ownership of intellectual property (Miller, et al., 2001), the process of copying formats and interchanging elements is more and more evident. The point is that Beijing (and China) has learnt how to adapt its media formats, which in turn has given new life to state owned media, e.g.: talk shows, reality type shows and current affairs shows based on the 60 Minutes style.

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Therefore, what matters to a media capital is probably its ability to react to market trends and to recognise and adopt emerging formats. Considering the importance of the Mainland market, the Chinese government influences media enterprises in Hong Kong, Taiwan, most Asian countries and some Western countries by decisively shaping the Mainland market. Positioned in the network constituted by node cities in Chinese media industries, such as Hong Kong, Taipei, and Singapore, Beijing, as the location of the Chinese government, controls the Chinese media production concentration to a certain degree, although it is not always in a good way. Thus I argue that Beijing is very likely to be the next Chinese media capital after enough accumulation and development has occurred, although as a lower-tier version as compared to other media capitals in the world such as Hollywood on the first tier and Mumbai on the second (Curtin, 2007, p. 285).

8.2 Revisiting Curtin’s media capital

In the second chapter of this thesis, I discussed the theory of media capitals. According to Curtin, media capitals are locations of concentrated media enterprises, managerial and productive operations in particular as well as talent; media capitals are also ports exporting products and shedding cultural influence across countries. The centripetal tendencies of production and management and the centrifugal tendencies of export and cultural influence are always modified and complicated by socio-cultural variations. Curtin only recognises that forces of socio-cultural variations can modify and even complicate the first two principles: logics of accumulation and trajectories of creative migration. But after taking a close look at developments in Beijing, I argue that media industries‘ development and human capital can influence and revise the third principle, socio-cultural variations.

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The one-way point of view on the interaction between socio-cultural variations and the other two principles is right about the inflow of media resources and talent in Beijing. In Chapter 5, I argued that the concentration of media enterprises and workforce in Beijing has always been driven by the government. This development path produces many negative effects, leading to the vulnerability of exports as shown in the case study on the CBD media cluster in Chapter 6. However, this can lead to the mistaken assumption that the non-mainstream factors in China are completely subject to the official mainstream culture due to the intense surveillance environment. The argument here is that the government prioritises control and maintains mainstream culture while media industries seek freedom and require an independent voice to produce distinctive prototypes.

In contrast, I have argued that Beijing offers a distinctive model of coordinating and integrating the official culture and the non-mainstream within a high surveillance regime. In Beijing, the counter-hegemonic factors mainly originate from private media companies, especially foreign ones, whereas state-controlled actors reinforce hegemony. However, the same goal is shared by private media companies and the Chinese government, which is the internationalisation and marketisation of media industries. Instead of assuming conflict, both official mainstream culture and non-mainstream culture act synergistically in Beijing; non-mainstream factors recognise that they won‘t gain traction if they protest overtly. Generally speaking, the hegemony maintained by the Chinese government doesn‘t accommodate cultural diversity and consequently obstructs innovation and creativity. In response, media companies inform, lobby and persuade the government to modify their views through adaptive informal institutions. The government‘s awareness of further reform is raised accordingly.

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In this way, counter-hegemonic factors are incorporated into the hegemonic system and converted to a part of the hegemonic system.

Hence, due to co-evolving relationships between hegemony and counter-hegemony in Beijing, the government and media industries influence each other. The media regulatory environment dictates the conduct of media firms and the extent to which they perform in the market, especially in the international market. This is one of the socio-cultural variations in Beijing. Although the industry is altered by socio-cultural variables, in Beijing the industry does affect and change the environment. The reason is that the government has strong interests in promoting the economic role of media while balancing it with the ideological roles of media. As such, media enterprises with growing power and media professionals with increasing integrity and self-esteem are able to use the state through informal institutions to improve the operational environment in pursuit of their desired outcome, as shown in Chapters 5 and 7. This may not happen in a very stable way but it has been functioning in China. Therefore it should be recognised that socio-cultural variations, especially state policies, institutions and culture, are also changing and evolving under the influenced of the first two principles. Even in places such as Beijing, where a significant degree of state control exists, the first two principles, logics of accumulation and trajectories of creative migration, can also influence, modify, reshape and change socio-cultural variations.

8.3 Significance of this study

The impetus for this study has come from the spate of media reforms in China and the Chinese government‘s internationalisation strategy, which have had a

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significant impact upon the development of China‘s media industries. Of interest to this study was Beijing, the national media centre of Mainland China.

However, local networks in Chinese media industries have not been sufficiently studied in existing Western studies. The focus of these studies are still on ‗propaganda‘ or ‗ideology‘ (Donald & Keane, 2002); whereas the linkage between cultural studies and geographic development is still missed, which is critical to understand the agglomeration of media industries in mainland China and the relationship of China‘s local media production and export. In particular, there is little systemic empirical research analysing development dynamics. When compared with a growing body of literature on the relationship of global media production networks and media clusters/cities within Western countries (e.g. Bathelt, 2002; Goldsmith, et al., 2010; Kaiser & Liecke, 2007; Kratke, 2002, 2003; Mossig, 2004; Nachum & Keeble, 2003; Turok, 2003), the literature on media clusters/cities in Mainland China is limited. Thus, this study is significant, as it has filled a gap in the research literature by exploring media production in Beijing and its connection with other media centres.

8.3.1 Implication for theory

This study used a conceptual framework that draws upon Michael Curtin‘s work on media capitals. The reason for drawing so heavily on Curtin‘s research is that it has provided a perspective from which to understand the spatial dynamics of media industry agglomeration. Curtin‘s framework of media capital integrates three aspects of media clustering and export and establishes a perspective of their interaction. In seeking to understand the nature of media capitals, this research confirmed most findings identified in Curtin‘s work (Curtin, 2007). While Curtin‘s media capital notion has helped to interpret the findings of the

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study concerned with media industries in a Chinese context, in other ways it is limited. This is understandable, given that media industries are a reflection of the wider cultural context in which they are located. An important implication of this study, then, is that it has further developed and revised the media capital conceptual framework. It is argued in this thesis that media capital should also acknowledge the media companies‘ and professionals‘ influence over the government to obtain the outcomes they desire and that this revised theoretical framework makes an important contribution to knowledge, particularly the knowledge regarding interpreting the relationship of media industries development and the Chinese government.

8.3.2 Implication for policy

The findings of this study revealed that despite the government‘s aspirations, China‘s media industries are still greatly constrained by institutional obstacles. Beijing therefore needs to create more room for creativity as Curtin argues that media capital cannot work under the heavy control of political leaders or the privileged classes (Curtin, 2011). In Curtin‘s paper in 2011 (ibid), he adopts Hong Kong‘s receding media capital status to illustrate that the conditions of media capital are dependent on converging forces and therefore subject to the vicissitudes of history. Hence the low quality of production has severely damaged Hong Kong‘s reputation as a media capital; consequently Hong Kong‘s transnational base and network of media industries and consumers slowly dissolved. Nowadays, although informal institutions in Beijing can compensate to a certain degree, Hong Kong is making efforts to revive its film industry, and Taiwan and Singapore are ambitious of a bigger picture. Policy makers in China should keep in mind that the real challenge lies in the competition for regional soft power. Despite the long history of cultural

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engagement and convergence of Beijing, which is a remarkable characteristic of media capitals, Beijing still has much ground to make up in order to catch up with real media capitals. Its current status as the national media centre is largely formed and sustained by the political force which is not helpful for Beijing to be a peer to Hollywood or Mumbai while competing with its rivals, such as Hong Kong, Taiwan or Singapore, in the international media market. Therefore Beijing should re-evaluate its policies regarding media industries and allow for fair competition. Otherwise, it will always be a national media centre in the domestic market in spite of the political push behind the city.

8.3.3 Implication for practice

The results of this study provided informative insights into how the Chinese government perceives its role and consequently how media industries are transforming in China. Therefore this study‘s findings have important implications for media companies (both state-owned and private) and media professionals (both domestic and international) in Mainland China.

8.4 Limitations of this study

Two main limitations need to be acknowledged. First, this study does not exhaust all elements of socio-cultural variation. Rather, this thesis is mainly focused on state intervention, one of the key factors facilitating and enabling diversity. The other limitation of the study refers to the reliance on documents as the prime data resources regarding government actions because of the difficulty of gaining access to government officials. While the use of documents proved to be an effective data collection device, the ambiguous text in these government documents can lead to superficial understandings. Furthermore, the implement 236

of policies can differ a lot when they are interpreted by different officials having discretionary powers. The observations on policy effects were accordingly counterbalanced with interviews with media companies and professionals who have firsthand experience regarding policy implementation.

8.5 Directions for further study

Three key recommendations for further research are identified as follows:

There is great disparity between regions in Mainland China in terms of culture, language and market. It is recommended that future studies be conducted to explore media agglomeration in other cities and regions in Mainland China, Guangdong Province, Zhejiang Province, Hunan Province and Shanghai in particular.

It is evident that, in addition to government policies, there are many factors that impact on media agglomeration and export in Mainland China. It is recommended that future studies explore a wider range of factors that help to shape a deeper understanding in terms of the forces of socio-cultural variations in the Chinese context and to further investigate the dynamics underpinning or inhibiting the marketisation and internationalisation of China‘s media industries.

Media capital is a relational concept. Most of this study‘s focus was on an exploration of Beijing, although some relationships with other media centres were briefly discussed. Therefore it is recommended that a comparative study be conducted on Beijing and other cities that are prominent nodes in the Chinese media network, especially Hong Kong and Taipei.

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Appendix I: List of Interviewees

Category Name Position description Date

CEO of Beidong Media Tom Wang (beidong chuanmei), a media 23/10/2009 and animation company

Co-founder of Timetimes Wang (taimei shiguang), a media, 29/10/2009 Qiang animation and advertising company

CEO of Beijing Seventh Studio Wang Feng 5/11/2009 Co., a TV production company

Co-founder of Beijing Golden Private media Screen Culture Communication companies Zhou Hao 5/11/2009 Co., Ltd, a TV and film production company

Manager in ACG Education International, a media Wang Kai 19/11/2009 production and animation training company

Co-founder of Beijing Somebody International Media, Lu Jia 19/11/2009 a Chinese-Taiwanese joint-venture of TV production

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Co-founder of Beijing BMC Co. Luo Xuan Ltd., a TV, animation and 20/11/2009 advertising company

CEO of Kuaile de Gou, the Beijing office of Kuailego, the Peng Yang 21/10/2009 TV shopping channel of Hunan Satellite TV station

Producer in China International Tang Haifei Television Corporation invested 6/11/2009 by CCTV State-owned media Wang Producer in CCTV-2 12/11/2009 organizations Binbin

Deputy director of distribution Xu Gang of August First Film Studio 19/11/2009 (bayi dianying zhipian chang)

Distribution director of Beijing Qian Forbidden City Film Company 26/11/2009 Chongyuan (zijincheng yingye)

Li Yan Freelance film director 28/10/2009

Yang Li TV producer 4/11/2009

Media workers He Lei Film photographer 15/11/2009

Li Haibin Freelance film producer 19/11/2009

Guan Yadi Independent film producer 22/11/2009

Foreign media Shaun Taiwanese media producer 13/10/2009

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practitioners Chang

Paul Australian media practitioner 26/11/2009 Pennay

Director of Beijing Office of a Dai Lv Taiwanese TV company and 26/11/2009 station

Janek Polish TV producer and reporter 26/11/2009 Zdzarski

Bert de 4/08/2011 Co-director of Movingcities Muynck (via email)

Associate professor at Guo Communication University of 18/11/2009 Manman China, Art director of Digital

Media scholars Channel of CCTV

Professor at Communication Fan Zhou University of China, expert on 14/4/2010 creative cultural industries

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Appendix II Sample Questions for Semi-structured

Interview

Four sets of questions are designed according to each focus group.

Questions for managers/directors in domestic media companies:

(1) Is there any trans-firm communication or collaboration? If yes, in what forms are they conducted and why carry out such activities? How do you evaluate the effect?

(2) Is there any trans-industry communication or collaboration? If yes, in what forms are they conducted and why carry out such activities? How do you evaluate the effect?

(3) How many staff comes from cities other than Beijing? How often is the personnel turnover? What do you think the personnel turnover?

(4) How do you understand the relation between media companies and government? How do you deal with the government control?

(5) What do you think of the media cluster?

(6) What‘s your judgement on the development tendencies of Chinese media industry? What‘s the development direction of your company?

(7) Is there any motive for your company to carry out international collaboration? If yes, what is the motive and in what form it is carried out?

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(8) Comparing with other cities in China, why do you start up your business in Beijing? / Why do you move your business to Beijing?

(9) In which aspect should Beijing improve in terms of media industry?

Questions for media workers:

(1) How long have you been working in this industry? Why do you choose media as your career?

(2) Why do you work in Beijing?

(3) Is there any form of communication between you and your colleagues? Is it useful? In which aspect you benefit?

(4) Do you change your job often? Why?

(5) In which way you absorb new knowledge?

(6) Do you think that the environment in your company is good for you to absorb new knowledge? Why? How about the cluster? How about the City?

(7) What do you think of Chinese media industry? What do you think the relation between media industry and Chinese government?

(8) What do you reckon the collaboration of your company with other companies, especially those foreign companies?

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(9) Regarding your own career development, what do you need the most?

Questions for media scholars:

(1) What do you think the function of media is supposed to be? Why?

(2) What‘s the attitude of government towards Chinese media industry?

(3) What‘s the attitude of government towards foreign media companies?

(4) What‘s the possible development trend of media policies? Why?

(5) What do you think of the cluster‘s function in media industry?

(6) Do you think Beijing is a media capital or can be a media capital? Why?

(7) What‘s your expectation of Chinese media industry?

(9) What‘s your expectation of Beijing as a media capital?

Questions for overseas media practitioners:

(1) Which country have you ever been work before?

(2) Why do you move to China? What‘s the difference between China and other countries?

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(3) Why do you come to Beijing? What‘s the difference between Beijing and other Chinese Cities? What‘s the difference between Beijing and other foreign cities?

(4) What do you think of Chinese media industry?

(5) What‘s your difficulty to work in Chinese media industry?

(6) Do you feel any networks in Beijing, especially in the clusters? What do you think of it?

(7) What do you think of Chinese government‘s attitude towards media industry?

(8) What do you think of Chinese government‘s attitude towards foreign media companies?

(9) Do you have any collaboration with Chinese media companies? What do you think of it?

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