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2 Nov, 2012

Rediscovering the Awakening Dragon: A Journey to Renaissance

By Li Zhenyu (People's Daily Online)

Beijing, October 29, 2012 – To have a deeper understanding of the present, it is, often times, necessary to get a grip on history first, or to say, where China’s present notion of innovation came from and how it unfolded into reality.

It came right from a national congress 10 years ago, a historical series of meetings that turned a whole new chapter in the history of China’s cultural sector development.

A decade ago, the milestone strategy of “actively developing cultural undertakings and industry” unveiled at the 16th National Congress of Communist Party of China (CPC) changed the entire view of China’s cultural sector.

The landscape of China’s cultural sector 10 years ago was quite different from what it looks like now. At that time, the sector was heavily subsidized by the government.

Cultural entities like news organization, publishing house, film studio and theater were mostly public institutions funded by the government, and private capital was restricted from entering the cultural sector. Market competitions among cultural organizations were scare.

The vast majority of the well-received cultural contents consumed by the Chinese people were those imported from foreign countries, like Hollywood’s blockbusters, Japanese cartoons and electric games, among others.

Workers in the cultural institutions have a secure lifelong job, and there was usually not much of a difference in their payment whether they had a good or bad performance.

The creativity of the people, in an ancient land rich in cultural resources and brimmed with millennia of wisdom, had remained hidden.


To unleash the Eastern Dragon’s hidden creativity and gain a soft power commensurate with its growing international status, the Chinese central government has, over the past decade, implemented various “hard” strategies and carried out a series of reforms to inject creative vitality into the increasingly prosperous cultural sector.

The strategy of “actively developing cultural undertakings and industry” was unveiled at the 16th CPC National Congress, and the central government made the decision to promote the “cultural system reform” and work out a plan for the reform.

One year later in 2003, the central government required 35 cultural institutions and nine cities to do cultural reform experiments, marking the beginning of China’s cultural system reform.

In 2005, the CPC central committee and the State Council jointly issued Several Opinions on Deepening the Cultural System Reform.

In 2006, China’s 11th Five-Year Plan for Cultural Development was released. Explicit guidelines and goals of China’s cultural system reform were made, and the reform extended to the whole nation.

In 2007, the 17th CPC National Congress stressed the strategic importance of cultural development and pledged to work out policies to develop cultural industry.

Two years later, in 2009, a historical document, namely the Plan on Reinvigoration of the Cultural Industry, was released by the State Council, indicating that cultural industry in China was elevated to an unprecedented height of strategic position at national level. The document is explicit in saying that private and overseas capital should be encouraged to invest in such sectors as movie production and distribution, broadcasting and publishing, especially in shareholding restructuring of state-owned enterprises.

It was particularly worth noting that, another two years later, in 2011, the 17th CPC central committee adopted the decision on “deepening the cultural sector reform and achieving cultural prosperity” at its sixth plenary session. Several major decisions concerning China’s cultural sector development were made at the meeting. The strategic objective of “building China into a socialist cultural power” was established.

In China, once an objective is established and placed high on the agenda of the central government, it will be accomplished.

China’s culture sector has witnessed great changes and development, thanks largely to the central government’s resolution to transform the budding industry.


China’s cultural sector has become increasingly commercialized, a process that is leading to a more open, market-oriented environment, increased participation of private capital, diversified cultural contents and the prosperity of Chinese cultures.

A sound market mechanism has gradually been forming, and cultural entities has transformed from public-funded institutions into self-sustaining companies; labor relations changed, and money flown in and out of the sector with more ease.


By the end of 2010, more than 4,300 cultural institutions in publishing, movie production, performing arts and other sectors had completed their transformations, since the start of the cultural system reform in 2003. By the end of June 2011, 95.9 percent of publishing houses, 90.3 percent movie studios and 27.8 percent theaters and troupes nationwide had transformed into independent market players, according to the official statistics.

Changchun Film Group, the first movie studio in China to complete its organizational reform in 2003, a former state-owned public institution with an accumulated loss of 30 million yuan ($4.7 million) in 1997, reaped a net profit of 50.8 million yuan ($7.94 million) in 2012 after restructuring.

A number of restructured cultural entities even completed initial public offerings (IPO) in domestic and overseas capital markets. By February 2011, there had been 26 listed cultural companies on the A-share and H-share markets.

As of September 2012, 580 publishing houses, 3,000 Xinhua Bookstores (a national brand and China’s only countrywide distribution channel for books, magazines, CDs and DVDs), 850 film production and distribution institutions and cinemas, 57 television series production institutions, 38 Party newspapers and magazines, and 2,092, or 99.5 percent, of the 2,102 art troupes in China have all transformed from state-owned institutions into market-oriented enterprises.


One of the key renovations the cultural system reform brought is the fundamental changes in labor relations.

Human creativity is the ultimate economic resource, and also the ultimate power in driving the cultural industry. The changes in labor relations are meant to unleash Chinese workers’ ultimate creativity.

By signing a labor contract with the working unit instead of stucking in an assigned job in the old days, cultural workers now has more freedom in choosing their career paths, and their payment is mainly based on their performance, that is, the better they do, the better they get paid.

China has now canceled the registration of 6,950 state-owned cultural institutions, and a total of nearly 294,000 public posts.


The successful transformation of China Oriental Performing Arts Group (China Oriental) provides a vivid account of how the cultural system reform has panned out.

Through restructuring, China Oriental managed to turn itself from a stagnant, state-funded public institution — the Oriental Song and Dance Ensemble, one of China’s leading performing arts troupes — into a profitable, self-sustaining enterprise.

By May 2010, all 484 performers had signed contracts with the performing arts group. In addition, the group divided itself into four sub-troupes. More troupes mean more competition, more stage opportunities and diversified performance.

After the reform, performers get an average of more than one hundred chances to perform on stage every year, and their average salaries have increased from less than 4,000 yuan ($625) to 7,000 yuan ($1,094) a month, plus extra for every show in which they appear.


The reform not only brought changes within the market players, but also vitality to the market itself as a whole.

More and more money has been flowing into the cultural sector and enjoyed more freedom.

In 2010, governments at all levels invested more than 150 billion yuan in cultural development, doubling that of 2006. Governments of Beijing, Jilin and Hainan have all set up special funds for culture projects, and the investment has expanded year by year, with other inflows coming from private companies and investment funds.


Restrictions on private capital were gradually lifted, and it was made specific that social capital investment was encouraged to enter into such sectors as movie production and distribution, broadcasting and publishing, among others.

Private capital has played an increasingly important role in China’s cultural industry.

In 2010, private companies contributed more than half of the cultural sector’s value added and two thirds of the jobs in the cultural sector. By April 2011, private businesses had accounted for over 90 percent of the entire 357,000 publishing organizations in China.


Increased commercialization of the cultural sector has also brought diversified content.

According to a government report, the number of publications has soared in recent years, with over eight thousand magazines, more than two thousand newspapers, and some 300 television stations in China.

China has become the world’s third-largest film maker after Bollywood and Hollywood, with 526 feature films made in 2010, up 15 percent from 2009.

The total output of China’s animation industry ran into 228,000 minutes in 2010, making China overtake Japan to become the world’s largest animation production center.

China’s overall variety of books, volume of books published and circulation of daily newspapers have all topped the world.


Owing to the cultural system reform, China’s cultural sector has had an entirely new look and has been prospering.

The industry’s value added increased 24.2 percent annually from 2008 to 2010, much faster than GDP growth, according to the 2011 blue paper on China’s cultural industry compiled by the Chinese Academy of Social Sciences (CASS). The number reached 1.1 trillion yuan ($172 billion) in 2010, accounting for 2.75 percent of the GDP, and the percentage is expected to be 5 percent by 2015, a number that signifies a new pillar industry of Chinese economy.

“The cultural industry, which eats through few resources but bears substantial fruits, plays a key role in China’s economic transition, as the conflicts between resources and development has become more evident in recent years,” Qi Yongfeng, a professor and the Research Director at the School of Cultural Industries of the Communication University of China, told this journalist.

“As China’s per capita income surpassed $3,000 in 2008 and $5,000 in 2011, it is the right time to develop the cultural sector into a pillar of the national economy. Cultural industry will have a prosperous future in China.”

After 30 years of manufacturing prospering, “Made in China” is upgrading to a new “Created in China” version. The cultural industry is emerging as a new engine in driving China’s economy.

One decade after the 16th CPC National Congress, the chapter is closing. The final brush will not mark the ending of a glories history, but only the beginning, the beginning of a golden journey to China’s cultural renaissance.