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By Ernest Zhang
(About the writer: Mr. Ernest Zhang is now seeking his doctoral degree in the University of Missouri School of Journalism. In 1998, sponsored by the China Sponsorship for a senior visiting scholar, he stayed one year in J-School as professional in residence. In August 2000, he came back to the J-school to conduct his master-degree study and was conferred the degree in December 2001. Since 1995 when he transferred from an associate professor to a journalist in China, he has been deputy director of the Guangzhou Daily's Science & Culture News Department, deputy editor in chief of the English-language Guangzhou Morning Post and the deputy director of the General Office of Guangzhou Daily Press Group. Having done some research in China's media system and reform, he attended such conferences in America as AEJMC and IABD with papers on Chinese media conglomeration and the characteristics of Chinese Party organs)
According to chinesenewsnet.com, the Beijing-based Caijing Times (The Financial and Economic Times - the writer is not sure of the accuracy of the paper's English name) reported on Dec.17, 2002 that Murdoch's News Corp will nail down its cooperative program with the Hunan Broadcast & Film Group, located in Changsha, capital of Southeastern China's Hunan province. The program, to be conducted by News Corp's StarChannel and HBFG's Broadcast Media, will tap the joint production of TV programs and other areas. The Caijing Times says that it is the first time the Chinese Government licenses its domestic TV station's plan of jointly producing TV programs with a foreign media group. The news story indicates that the Chinese media are carrying out reforms so as to deal with the challenges being imposed by the elite power groups of the Western media since China entered the World Trade Organization.
However, more than 20 years ago or even 10 years ago, the cooperation above could not be allowed or even imagined. This is because, traditionally, discussing the prototype of the Chinese press system, numerous scholars and researchers of journalism and mass communications used to share at least one common view, i.e., the Chinese press system descended from that of the former Soviet Union. Lin Feng asserts, "Lenin's important doctrine that the basic job of mass communications is to serve as collective agitator, propagandist and organizer has tremendously influenced China's revolutionary journalistic cause." Li Liangrong even points out in detail: "In the early 1950s China's media copied the Soviet Union's Tass and Pravda, insisting that every word and every sentence encompass the Party's position." In 1956, analyzing the Authoritarian, the Libertarian, the Social Responsibility and the Soviet Communist theories, which were influencing various countries' press systems, in their famous book Four Theories of the Press, Fred Siebert, Theodore Peterson and Wilbur Schramm, three American professors of mass communications, also commented on China's press system. Pointing out that the Soviet Communist theory suggests mass communications should be used instrumentally to suit the needs of state power and Party influence, Siebert et al. included China in the bloc led by the Soviet Union as "countries where press control is complete."
Since the four theories were published, almost half a century has passed. In Russia and other Eastern European countries, after the communist government fell in 1990, print and broadcast media have played, and continue to play, a vital role in the transitions to democratic society. China started to adopt its open-door policy and economic reform in 1978. As the economic reform went deeper, the country formally declared its switch to the unique socialist market-economy system in 1992. Just like Siebert et al's assertion "the press always takes on the form and coloration of the social and political structures within which it operates," Chinese media also started to suck in the free-market nourishment to match the economic reform. As a tendency in media reform, "marketization" in the press emerged soon. Since the mi d-1990s, the competition among Chinese newspapers has gotten more and more serious. China's Party-government authorities thought it was the right time to establish modernized socialist press groups with Party organs at the core. The purpose was to make the Chinese press more powerful by implementing two fundamental transitions. One was to expand the Chinese press by increasing the newspapers' number and enhancing the newspapers' quality and efficiency. The other was to change the way of operating newspapers from the extensive model to the intensive model. Only by conglomerating Chinese newspapers, China's central authorities believed, could the development of the Chinese press adapt itself to the world press' developing trends on the one hand and satisfy the requirements of Party and government on the other.
The Guangzhou Daily, located in Guangzhou city, South China's political, economical and cultural capital, had operated experimentally as a conglomerate since the early 1990s. Consequently, by June 1995, the newspaper, with six subsidiary publications and a wide range of businesses in various areas, had reached a private subscription rate of 61.4 percent and an average daily street sale of more than 180,000 copies. In addition, the weekday circulation of the newspaper had hit 570,000 with an average of 20 pages a day. Its advertising revenues and total revenues had reached 466.25 million yuan ($51.2 million) and 826.37 million yuan ($99.5 million), respectively. Therefore, having considered the Daily's good media effects and noticeable profits, China's State Press and Publications Administration approved of the establishment of the Guangzhou Daily Press Group, the country's first newspaper conglomerate.
The GDPG did not fall short of the central authorities' expectations. Two years after its establishment, the GDPG succeeded in increasing the Daily's daily average pages to 40, weekday circulation t o 920,000 copies and advertising revenue to 620 million yuan ($74.7 million). It's no wonder at the end of 1998, with total revenues at 1.72 billion yuan ($207 million) and profit at 349 million yuan ($42 million), the group had become one of Guangzhou's top 10 state enterprises and a major economic powerhouse. As a result, in 1998, based on GDPG's two years of operating experience, the SPPA approved the establishment of another five newspaper conglomerates. By the end of 2002, more than 38 Chinese socialist press groups had already been founded. As more press groups are launched, China's media reform has been upgraded to conglomeration on the basis of marketization. Not only playing the role of Party-government's organs, Chinese press groups have also become enterprises, which, regulated by the rules of the market, generate commodities. Such a dual role of Chinese media, due to the limitation of the times, was not and could not be analyzed by Siebert and his co-authors in the 1950s.
As a precursor of China's media reform, the conglomeration of Chinese newspaper industry paved the way for the emergence of China's broadcast groups and book publishing and selling groups. Around December 2001 when China entered the WTO, more than 13 broadcast and film groups were founded. Among them the HBFG is one of those founded earliest while the Shanghai Media and Entertainment Group, founded in April 2001, is one of the biggest. The SMEG, consisting of radio stations, three TV stations, one Web site company and several print publications, is now considered as the prototype of China's super cross-media groups. Since one of the WTO treaties signed by China in 2001 has already opened China's market to the foreign-funded sellers of audiovisual products, books and magazines, the China Publishing Group was added in April 2002 to the conglomerated team of six provincial publishing groups in order to deal with the challenges from the intruding foreign book companies like Germany's Bertelsmann. The CPG has a wide range of business, including the printing, publishing, delivery, import and export of books. Besides nine book publishing groups, China has also founded five publication delivery groups and one periodical group.
The expansion of China's media conglomeration aims at enlarging and strengthening Chinese media groups. According to statistics, media have become China's No. 4 profitable industry following electronic information, manufacturing and tobacco production. However, as mentioned previously, the challenges imposed by those Western elite media powers like AOL Time Warner, News Corp, Disney and Bertelsmann are so great that Chinese media by comparison are at disadvantage at least economically. Two examples can be cited. First, the China Central TV station, No. 1 advertising earner among Chinese media for many consecutive years, pocketed $600 million of revenues in 1998, which ranked CCTV 57th among the world media. Second, in 2000, the $ 4 billion of revenues earned by Japan's Asahi News, which had 7,800 staffers, dwarfed the $301.2 million of revenues made by the GDPG, China's most economically powerful press group that had a staff of 4,000 that year. Another two examples show the serious competition for the market share caused by those Western media powers. First, in Guangzhou, starting from the fourth season of 2001, audiences can get a packet of programs broadcast by more than 30 overseas channels by paying the Southern TV only about $200 for a decoder and small sum of extra dollars for monthly services. Second, News Corps' StarChannel has seized 970,000 household subscribers from the local TV outlets while AOL Time Warner Entertainment has gotten 600,000 and is looking forward to 1.2 million in 2003.
Since the challenges and the competition are unavoidable, how can Chinese media respond and counterattack? The following are some approaches that are being used or to be employed in the future.
First, just as it established the special economic zones in the early 1980s to learn from Western countries' managing mechanism and to attract foreign investment, China has already hacked out an experimental field in Guangzhou to try opening China's media market to the outside world. More than 30 overseas TV channels have been ushered to this field, and they will soon also enter the TV market in the Pearl Delta region as the field will extend to there. Through this special mass media zone, the Chinese government wants to learn the operating system of Western mass media. At the same time, this zone is also the very place in which Chinese and foreign news media can get to know each other better and researchers can conduct meaningful research.
Second, to enable media groups to operate in the areas away from where they are headquartered is a breakthrough for Chinese media groups to get stronger and bigger. The speech to the '02 Shanghai Media Summit Forum made by Mr. Zhao Qizheng, minister of China State Council's News Office, indicates that the Chinese government will encourage the re-structure of media industry and support super media groups' operation to cross geographic borders by tearing down the territory and local market barriers.
Third, with the support of Zhao's speech, Chinese media groups will be more confident to get more multimedia-oriented. China's Ministry of Radio, Film and Television has stated to strive to found several large-scale, multimedia broadcast groups across the country within three years. On the side of the press, newspaper conglomerates are determined to find and train cross-media journalists for the emergence of China's true super multimedia conglomerates integrated with print and broadcast media.
Fourth, to advance financing through the stock market is also an effective approach for Chinese media to raise enough funds to satisfy their need for development. Although still regarding media as state-owned enterprises, the relative departments of the Chinese government have now permitted some media groups' non-editing businesses to seek stock market listing for raising money. The HBFG, CCTV and the Chengdu Economic Daily have already gotten their non-editing companies listed in the stock market.
There should be more strategies and approaches.
By using them, Chinese media hope to keep the momentum in development. Therefore, it will be believed that several super multimedia groups will emerge in China soon. In addition, it will be predicted Chinese media will be able to convert the challenges from Western media powers into advantages so as to catch up with the tendency of media globalization.
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