CHINA’S CULTURA INDUSTRIES IN THE FACE OF TRADE LIBERALIZATION: AN ANALYTICAL FRAMEWORK OF CHINA’S CULTURAL POLICY Thesis Presented in Partial Fulfillment of the Requirement for the Degree Master of Arts in the Graduate School of the Ohio State University By Xiaolu Chen, B.Econ. Graduate Program in Arts Policy and Administration The Ohio State University 2009 Thesis Committee: Margaret Wyszomirski, Advisor Wayne Lawson Copyright by Xiaolu Chen 2009 ABSTRACT The distinctive characteristics of cultural products have caused considerable on-going international debate on free trade. Should cultural goods be treated just like other commodities or should they be protected for the sake of cultural diversity? This article explores the rationale of the cultural exception strategy underlying the discourse of free trade negotiation, with particular attention to the case of China's cultural industries, in which cultural goods and products have received special treatment compared to other commodities. By analyzing the specific commitment made by China in WTO agreements, and framing up the measures that have been utilized by Chinese policymakers to promote cultural industries, this study addresses two major questions: how did the Chinese government construct and adjust its cultural industrial polices in the face of WTO entry and free-trade negotiation? And what factors have prompted the Chinese government to fashion its cultural industrial policy into its current shape? The result of the research shows that China has taken a paradoxical position with regard to the cultural industries: on one hand, the Chinese government has pursued ambitious policies to support the development of cultural ii industries as part of a more general interest in promoting economic growth. On the other hand, the Chinese administration remains reluctant to open up its domestic cultural markets to global competition, which to certain degree restricts the development of China’s cultural industries. To explore the cause of the paradox in China’s cultural industries, the study draws on Kingdon’s policy window model to frame up China’s cultural industrial policy development through three streams: 1) problem stream, 2) policy stream, 3) politics stream. Based on Kingdon’s model, the researcher presents an analytical framework for China’s cultural industrial policies, which reveals that the current shape of China’s cultural industries and cultural policies is an outcome of the transitional nature of the Chinese society. In the end a new phase of China’s cultural industrialization will be introduced, predicting challenges and opportunities that could affect the future development of China’s cultural industries. iii ACKNOWLEDGEMENTS I would like to thank my advisor and mentor Dr. Margaret Wyszomirski for her intellectual support, continuous encouragement, and tremendous patience in helping and guiding me throughout the creation of this paper. She is like a family member to me during my two years of graduate study, and I am grateful for all the countless care and support that she has given to me. I also would like to thank the other member of my master’s examination committee, Dr. Wayne Lawson, who has been a generous source of guidance and inspirations during my study. I want to thank all the staff members at the Department of Art Education, Kirsten Thomas, Holly Longfellow, and Rosemary Thornton, for their continuous help and support. Finally, I wish to thank my family and friends who have always been there for me. Without their support, every step of the way could have been much harder. iv VITA December 11, 1984…………………….Born – Chaozhou, China 2007…………………………………… B. Econ. International Economics and Trade, University of International Relations 2007 – present………………………… Barrnett Fellow, Department of Arts Education, Ohio State University FIELD OF STUDY Major Field: Arts Policy and Administration Minor Field: Theatre and Performance v TABLE OF CONTENTS Abstract………………………………………………………………………………. ii Acknowledgements………………………………………………………………….. iv Vita…………………………………………………………………………………… v List of Tables………………………………………………………………………..viii List of Figures…...……………………………………………………………………ix Chapters 1. The research problem and purpose of study: China’s rising cultural industries in the face of globalization…………………………………………………………...1 2. Cultural industry as new engine for economic growth and the discussion of cultural exception in global free trade negotiations: a review of literature……...10 2.1 A brief definition of cultural industry………………………………………. 10 2.2 China’s cultural industries: an overview…………………………………….12 2.3 Cultural exception or free trade in cultural industries: a global debate……...18 2.4 Policy formation process and Kingdon’s policy window model…………….28 2.5 The multiplexity of China’s cultural industries and Kingdon’s model………39 3. Methodology, analytical framework and design of the study……………………43 4. The Paradox of China’s cultural industrial policies: cultural exception and cultural ambition………………………………………………………………………….48 4.1 Cultural exception versus cultural ambition ………………………………...49 4.2 The paradox of China’s cultural industrial policies………………………….63 vi 5. China’s cultural policy formation and cultural industrialization: an analytic framework………………………………………………………………………..68 5.1 The problem stream: the pressing demand of global harmonization………...70 5.2 The political stream: approving for cultural industrialization……………….72 5.3 The policy stream: reshaping the cultural landscape…………………….......76 5.4 The coupling effect: The map of cultural industrialization………………….84 6. The new phase of cultural industrialization: China’s cultural industries in the twenty-first century………………………………………………………………87 6.1 The reconfiguration phase of cultural industrialization……………………...88 6.2 Other opportunities and challenges of the new phase………………………..95 6.3 Conclusion………………………………………………………………….102 References…………………………………………………………………………..105 vii LIST OF TABLES Table 1: Major arguments of cultural exceptionists and trade liberalists…………. 30 Table 2: China’s WTO commitments in audiovisual services……………………. 57 viii LIST OF FIGURES Figure 1: The classification of China’s cultural and related industries……………. 13 Figure 2: A working analytical framework of China’s cultural policy formation and cultural industrialization………………………………………………….69 Figure3: The policy stream components……………………………………………77 Figure 4: The two phases of China’s cultural industrialization…………………….90 ix CHAPTER 1 THE RESEARCH PROBLEM AND PURPOSE OF THE STUDY: CHINA’S RISING CULTURAL INDUSTRIES IN THE FACE OF GLOBALIZATION Background to the Problem On December 11, 2001, after a series of complicated and arduous negotiations that last more than 15 years, China finally reached the destination of its long march and acceded to membership in the global trade body, the World Trade Organization. This historic event became a representative milestone for the Reform and Open-up Policies that China has been undertaking for nearly thirty years. It also reflects the country’s rejection of autarky and determination of resurgence through the mechanism of market economy. Due to the government’s persistent efforts to reform the economic system and open up the borders to foreign trade and investment, China’s general economy has been performing outstandingly and the country’s Gross Domestic Product (GDP) has remained at a high growth rate since the commencement of the program. The “socialist market economy”, a term that has been used a lot in official documents of the Chinese government and the Communist Party of China (CPC), was 1 proved to be a feasible approach so far to improve the prosperity of the country and the welfare of people. As China’s economy develops and people’s living standards jump to a new high level, important changes happened in people’s consumption habits, mainly derived from the increasing amount of leisure time and disposable income. As a result, material needs of the population decrease, while spiritual and cultural needs increase, creating strong demand of cultural goods and products in the market. This increasing demand of cultural products and its accompanying demand to build up industrial capacity to satisfy these needs moved onto the policy agenda and become one of the recent focuses of the Chinese government. In the 2004 Report on the Work of the Government, Premier Wen Jiabao stated: The people’s intellectual and cultural needs are constantly increasing along with economic development and social progress in China, so we must attach greater importance to cultural development. It is necessary to energetically develop an advanced socialist culture. (Wen, Report on Work of the Government (2004), 2004) In order to develop a so-called “socialist culture”, the Chinese government has utilized many measures to achieve its goal. From the historic approach of “making culture as an undertaking”, to the more recent approach of cultural industrialization, the Chinese culture has moved along with the ups and downs of the Chinese political and economic reforms. Certainly, the development of such 2 “an advanced socialist culture” is no simple task, especially at an age when globalization is penetrating into many aspects of life including economy, politics, and culture, through incessant breakthroughs from the field of science and technologies, as well as the development of a more powerful international trading regime. The issue of building a “socialist culture” in a more global world is generating more concerns especially after China’s