Establish and Complete a Modern Cultural Market System

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This article by Jiang Jianguo, the Party Secretary of the State Administration of Press, Publications, Radio, Film and Television was first published in Seeking Truth on 16 December 2013.

The “CCP Central Committee Decision concerning Some Major Issues in the Comprehensive Deepening of Reform” (hereafter simply named “Decision”) has made the establishment of a modern cultural market system into an important task that closely revolves around the building of the Socialist core value system and a strong Socialist culture country, and deepening cultural structural reform, it has also made major deployments.

Following the incessant perfection of the Socialist market economy, cultural resource allocation as well as the production, distribution and consumption of cultural products are increasingly inseparable from the market. Building a unified, open, competitive and orderly modern cultural market system has become an important content and decisive factor of cultural reform and development under the conditions of the Socialist market economy. Since the 16th Party Congress, the Centre has given high regard to the establishment of a modern cultural market system, and forcefully moved the linkage of cultural resources and the market forward, pluralized investment structures for the cultural industry began to be formed, the organization of modern logistics for cultural products began to take shape, markets for capital, property rights, copyright, talent, technology, information and other such cultural production factors have rapidly developed, a beginning has been made with breaking through the barriers of horizontal and vertical fragmentation, regional barriers, and the urban-rural divide in the traditional cultural market structure, and the positive role of the market in cultural resource allocation has begun to take prominence. However, in comparison with the demands of the grand development and grand flourishing of Socialist culture, the comprehensive levels of modern cultural market system construction are not yet high, the development of cultural product and factor markets is not yet perfect, cultural product logistics and service channels are not yet smooth, cultural consumption potential has not yet been fully aroused. General Secretary Xi Jinping pointed out that: “Reform and opening up are boundless, there is only a progressive tense, no perfect tense”, “In responding to the series of contradictions and challenges that our country’s development faces at present, the crux lies in comprehensively deepening reform.” According to the 18th Party congress’ deployment that firmly move the construction of a strong Socialist culture country forward, the crux lies in comprehensively deepening cultural structural reform, breaking through the traditional system in which cultural resources are allocated along departments, administrative regional and administrative hierarchical lines, and building and strengthening a uniform, open, competitive and orderly modern cultural market system.

The “Decision” correctly grasped the new demands of a new period of and new circumstances for cultural reform, it correctly grasped the inherent laws and objective reality of cultural market system construction, it focused on establishing and completing market access and withdrawal mechanisms for cultural capital, cultural enterprises and cultural products, it encouraged market subjects of all kinds to compete fairly, letting the fittest survive, it stimulated the rational circulation of cultural resources on a nationwide scale, and it stressed the establishment and completion of a modern cultural market system through aspects such as strengthening cultural market subjects’ competitiveness, encouraging the development of non-publicly owned cultural enterprises, establishing multi-level cultural product and factor markets, innovating modern cultural market system policy environments, etc. This fully reflects that our Party stood on a historical starting point of strategic thinking in cultural structural reform and scientific planning, it reflected the inevitable tendencies of our country’s cultural development and the demands of the times. We must, according to the deployment in the “Decision”, with a spirit of overcoming difficulties when they arise and building bridges when we come to rivers, overcome profound systemic and mechanistic obstacles, establish and complete a modern cultural market system, fully give rein to the positive function of the market in the allocation of cultural resources, promote the grand development and grand flourishing of Socialist culture by arousing the cultural creative vitality of the entire nation, and provide strong cultural forces to realize the Chinese Dream of the great rejuvenation of the Chinese nation.

I, Strengthening the competitiveness of cultural market subjects

Cultural enterprises are the core of the cultural market. Promoting the transformation of State-owned commercial culture work units into enterprises, and maintaining and giving rein to the dominant position and guiding role of State-owned enterprises in the market are central in building and completing a modern cultural market system. Since the 16th Party Congress, according to the Centre’s deployment to move cultural structural reform forward, we have basically completed the transformation of State-owned commercial culture work units into enterprises in publishing, film and television production, distribution, radio and television transmission and normal State-owned literature and art troupes, a first batch of non-current affairs-type newspaper and periodical publishing work units, etc., we have remoulded a batch of new-type market subjects, and notably strengthened the vitality, power and competitiveness of State-owned cultural enterprises. According to the deployments in the “Decision” concerning deepening cultural structural reform, we must continue to move the transformation of State-owned commercial cultural work units into enterprises forward, accelerate the transformation of corporate structures and shareholding structures, promote mergers and acquisitions of enterprises across regions, across sectors and across ownership systems, and raise levels of scale, intensification and specialization in the cultural industries.

Continue to move the transformation of State-owned commercial cultural work units into enterprises forward. Deepening the transformation into enterprises of State-owned commercial cultural work units is crucial in fostering cultural market subjects. We must, with accelerating the establishment of modern enterprise systems with clear property rights, clear rights and obligations, separation of government and enterprises, and scientific management as focus point, according to the demands of innovating systems, transforming mechanisms, facing the market and expanding power, expand the reform achievements of publishing, distribution, film, television and common State-owned literature and art troupes, promote that cultural enterprises who have already transformed perfect their legal person governance structures, form asset organization methods and business management methods that conform to the demands of modern enterprise systems and reflect the characteristics of cultural enterprises, incessantly raise the levels of indigenous operations and self-innovation in  State-owned cultural enterprises, and strengthen market orientation, participation and competitive ability. Combine enterprise transformation into the promotion of newspaper and periodical resource integration, newspaper and periodical structure adjustment, and dealing with fragmentation and excess, establish and complete press and publications access and withdrawal mechanisms, continue to steadily move the reform of non-news type newspaper and periodical publishing work units forward. Vigorously move the transformation into enterprises of focus news websites forward, learn from the business methods of commercial websites, incessantly raise competitiveness, and strengthen influence.

Accelerate the shareholding system reform of State-owned cultural enterprises. The shareholding system is the direction and a necessary path for the reform of State-owned cultural enterprises. We must persist in putting shareholding system reform central, and accelerate moving forward with reform of property right structures for State-owned cultural enterprises. Innovate investment systems, support State-owned enterprises that meet conditions to go onto financial markets, attract social capital to participate in shareholding system reform. Encourage State-owned cultural enterprises to conduct shareholding rights innovation, move forward with the optimization of shareholding rights structures on publicly-traded State-owned cultural enterprises, explore the implementation of special management share systems for important State-owned media enterprises that have transformed their structures according to regulations, in order to attract even more strategic investors for the cultural area. Formulate corresponding regulations on the basis of the Constitution and relevant laws, clarify and implement the scope of application, exercising subjects and supplementary mechanisms of special management share systems, in order to guarantee national cultural security and the public interest.

Promote mergers and acquisitions of cultural enterprises across regions, across sectors and across ownership systems. With State-owned backbone cultural enterprises at the core, guiding and leading cultural markets are fundamental requirements for the development of advanced Socialist culture. We must integrate State-owned commercial culture work units’ transformation into enterprises with resource integration and structural adjustment, break through regional confines and sectoral barriers, encourage powerful State-owned backbone cultural enterprises to, with capital as the link, conduct mergers and acquisitions across regions, across sectors and across ownership systems, and promote the concentration of cultural resources and factors in excellent cultural enterprises and superior cultural industries. Select a large batch of comprehensive cultural enterprises groups that have a prominent core business, have indigenous intellectual property rights, cultural innovation capacities, core competitive strength and good maturity, expand support strength in policy, resources, programmes, funding and other such areas, make them larger, better and stronger as quickly as possible, strengthen control strength and influence, ensure that it becomes a dominant force for the cultural markets.

II, Encourage the development of non-publicly owned cultural enterprises.

The non-publicly owned economy is an important component part of our country’s Socialist market economy, like the publicly-owned economy, it is an important basis for our country’s economic and social development, and it plays an important role in cultural construction. Since the 16th Party Congress, we have encouraged and guided social capital to enter the cultural industries, and created the beginnings of a cultural industrial structure with public ownership at the core, jointly developing with many kinds of ownership systems. However, non-publicly owned cultural enterprises still face many unreasonable constraints in investment, and it is difficult for them to use production factors in a manner equal to State-owned enterprises. According to the deployment in the “Decision” concerning deepening cultural structural reform, we must, at the same time as fully giving rein to the dominant role of State-owned cultural enterprises, encourage the development of non-publicly owned cultural enterprises, support the development of all sorts of small and micro cultural enterprises, build an open and pluralized cultural market development structure.

Reduce barriers to entry for social capital. Letting the cultural market flourish and develop is inseparable from pluralized investment subjects. Only by guiding even more social capital to enter the cultural area is it possible to liberate the energy of the cultural market better. We must, on the basis of broadening access for social capital, further reduce barriers, reduce unreasonable access limitations, and within the scope permitted by the State, guide social capital to enter into the cultural industries in many forms within the and participate in the transformation into enterprises of State-owned commercial cultural work units within the scope permitted by the State, make technology, brands, intellectual property rights and other production factors into equity for share participation, or adopt many kinds of forms, such as investment, share control, acquisition, merging, contracting, renting, agency, etc., to participate in the reorganization of State-owned cultural enterprises, participate in the implementation of major cultural industry programmes and the construction of cultural industry parks, and provide support equal to that for State-owned capital investment in investment approval, credit and lending, land use, tax benefits, capitalization on financial markets, bond issuance, foreign trade and the application for special funds, and strive to build a pluralized investment structure under government guidance.

Broaden access for non-public cultural enterprises to the field. Non-public cultural enterprises’ special advantages in capital operation, technological applications, production management, market selling and other such areas may bring fresh blood into the cultural market. We must permit non-public cultural enterprises to participate in foreign-oriented publishing and online publishing, permit them to participate in the reform and operation of State-owned film and television production organs and literature and art troupes by way of share controlling, to enter into areas such as literature and art performance troupes, performance venues, museums, exhibition halls, cultural and artistic intermediaries, tourism and cultural services, artwork trading, Internet surfing service business venues, cartoons and online games, cinemas, cinema chains and publications retail, etc., and enjoy equal treatment to State-owned cultural enterprises, to realistically give rein to, guide and protect the vigour of non-public cultural enterprises. Strengthen and improve service to and management of non-public cultural enterprises, guide the orientation of investment, restrain disorderly competition, stimulate them to consciously implement social responsibilities.

Support the development of all sorts of small and micro cultural enterprises. The forceful development of small and micro culture enterprises benefits further liberating and developing cultural productive forces, arousing the entrepreneurial enthusiasm and cultural creative vitality of the entire people, and enlivening the cultural market. We must adopt effective measures to support small and micro cultural enterprises to fully play a positive role in adjusting industrial structures broadening internal demand, increasing employment and other such areas, and to provide rich and varied cultural products and services to the broad masses in a pluralized and multi-channel manner. Encourage small and micro cultural enterprises to march a path of “specialization, excellence, characteristics and innovation”, focus on supporting small and micro cultural enterprises with core competitiveness and development potential to go to capital markets on the start-up board, and to become progressively larger and stronger.

III, Establishing multi-level cultural product and factor markets

The contradiction between cultural product and service supply and demand remains prominent and multiple levels, cultural factor circulation remains obstructed, cultural product and factor market establishment requires further strengthening. According to the deployments in the “Decision” concerning deepening cultural structural reform, we must establish a multi-level cultural product and factor market, and forcefully promote the integration of financial capital, social capital and cultural resources.

Strengthen cultural product market construction. Incessantly enriching cultural product markets is a focus point to establish and complete modern cultural market systems. We must, under the preconditions of maintaining licencing for publishing powers and broadcasting powers, permit separation of production and publication, or production and broadcasting, and encourage cultural enterprises to incessantly enrich and innovate cultural products and services. Develop markets for books, newspapers and periodicals, electronic audiovisual products, performing entertainment, films and television dramas, cartoons, games and other such traditional media products, establish new cultural product markets with the network as carrier, foster mass cultural consumption markets, expand rural cultural markets. Continue to forge comprehensive, specialized and regional cultural product and service exchange platforms, expand the consumption sphere for cultural products and services. Develop chain operation, logistics and delivery, e-commerce and other such modern logistical organizations and circulation forms, accelerate the construction of a batch of large-scale modern cultural circulation enterprises and some national-level cultural product logistics bases, encourage cultural enterprises to use e-commerce and other such advanced logistical technologies to develop third-party logistics services, build a cultural product circulation network with large cities at the centre, supplemented by small and mid-size cities, that penetrates town and country, strive to realize high-efficiency circulation and delivery of cultural products at low cost.

Strengthen cultural production factor market construction. Exchange markets for the factors needed in cultural production are a basic condition for the development of cultural markets. We must develop markets for cultural property rights, copyrights, talent, technology, information and other such factors in an orderly manner, establish and complete cultural resource valuation systems and cultural property right exchange systems, and develop all sorts of cultural capital exchange markets with copyright trading at the core. Move the construction of cultural capital markets forward, stimulate the effective linking of financial capital, social capital and cultural resources, fully use both domestic and foreign capital markets at many levels to resolve the problem that it is difficult for cultural enterprises to raise funds. Move the construction of cultural property right markets forward, accelerate the formulation and perfection of management rules for the valuation, registration, mortgage, investment, trusteeship, liquidation and other such matters of copyrights, enterprise brands and other such intangible assets, encourage and support cultural enterprises to conduct exchanges in shareholding, copyright, trademarks, brands and other such areas.

Accelerate the construction of cultural industry organizations and intermediary organs. Cultural industry organizations and intermediary organs are the main bridge linking the government and the markets, fully giving rein to their role in providing services, reflecting appeals and standardizing actions is an important condition for the establishment and completion of modern cultural market systems. We must persist in equally stressing fostering, development, management and supervision, strengthen the construction of all sorts of cultural sector associations and other sectoral organizations, complete sector standards, perfect sector management, and even better carry out regulation, supervision, service, rights defence and other such roles. Vigorously develop copyright agency, cultural brokerage, valuation and assessment, technology trade, consultancy, investment insurance, guaranteed auctions and various other such intermediary service organs for the cultural market, formulate and perfect management rules for intermediary cultural markets, guide their standardized operations, so that they provide comprehensive services for all sorts of cultural market subjects.

IV, Innovate the policy environment for the construction of modern cultural market systems

Establishing and completing modern cultural market systems is a systemic project, we must persist in government guidance, respect the laws of the market economy and the laws of cultural development, vigorously give rein to the role of policy in macro-level regulation, market supervision, institution-building and other such areas, and provide an external environment of fair competition to all kinds of cultural market subjects. In recent years, we have vigorously moved forward in terms of administrative management departments’ realistically carrying out policy regulation, market supervision, social management, public services and other such tasks, and rolled out a series of policy measures that have provided important guarantees for the development of cultural markets. According to the deployment in the “Decision” concerning deepening cultural structural reform, we must further transform government functions, perfect cultural economic policies, broaden government financial support for culture and government procurement, strengthen copyright protection, strengthen cultural product valuation systems and reform award systems, and push out more excellent cultural products.

Perfect cultural economic policies. The extent of perfection in policies directly affects the strength to move cultural market system construction forward and the real results. The more the construction of modern cultural market systems is deeply moved forward, the more it is necessary to incessantly perfect cultural economic policies and fully give rein to the leverage role of policy. We must expand the policy support strengthen for the cultural industries in areas such as finance, taxation, funding, social guarantees, land use, etc., guarantee input of public finance into cultural construction, and raise the proportion of expenditure on culture in [overall] financial expenditure. Improve methods for government support of cultural industries, expand the scale of relevant cultural funds and special funds, focus on supporting cultural innovation and the production of excellent products, as well as research and development of cultural industry programmes with a demonstration or guiding nature, guide and drive ever more social capital to enter into cultural industry through government finance. Research and improve methods for government procurement of public cultural products and services, progressively establish government procurement structures for public cultural services, implement government procurement for many kinds of cultural products and services. Continue to implement and progressively perfect supplementing policies for cultural structural reform, implement and progressively perfect policies to encourage personnel streaming and arrangements, talent use and training, technological innovation and application and other such areas, forcefully optimize the policy environment to benefit cultural market development.

Strengthen copyright protection. The establishment and completion of modern cultural market systems is inseparable from powerful intellectual property rights protection and effective market supervision and management. We must accelerate cultural legislation, strengthen cultural market management according to the law, and comprehensively utilize legal, administrative, economic, scientific, technological and other such means to raise management levels. Expand intellectual property rights protection strength, support patent applications, trademark filings and copyright registrations for cultural products and services, punish piracy, illegal publishing, illegal business and other such acts violating intellectual property rights according to the law, reduce to the broadest extent the amount of inferior cultural products entering the market. Deeply launch “sweeping away pornography and striking illegality”, complete comprehensive cultural market law enforcement organs, rationalize Internet management systems, shape a cultural market order of lawful business, where law-breaking must be dealt with, with fair trading, honesty and sincerity as quickly as possible.

Complete cultural product evaluation systems. The high-quantity emergence of excellent cultural products is a fundamental precondition for letting cultural markets flourish. In recent years, our country’s cultural product creation and production quantities have become incessantly richer and their quality incessantly rises, but there still are not many excellent cultural products. We must accelerate guidance over cultural product creation and production, completely implement the “Two Fors” orientation and the “Two Hundreds” policy, firmly establish a work orientation with the people at the core, and provide even better and even more spiritual nourishment. Complete cultural product evaluation systems, persist in making carrying forward the Socialist core value system, persisting in the progressive orientation of advanced Socialist culture and the satisfaction of the popular masses into the highest standards to evaluate products, unify mass evaluation, expert evaluation and market testing, form scientific evaluation standards, incessantly raise the orientating nature, authority and credibility of cultural product judgements. Reform award systems, reduce award categories, establish open, fair and just award mechanisms, fully give rein to their demonstrative role. Scientifically formulate assessment standards for cultural enterprise and undertaking work units, persist in putting social effect first, comprehensively plan social effect and economic effect, the demands of the orientation and profit quota, promote the establishment of systems and mechanisms that benefit the production of excellent products, talents and effects, strive to realize the maximization of social effect and the optimization of economic effect.

(The author is the Party Secretary and vice-Director of the State Administration of Press, Publications, Radio, Film and Television)




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