Skip to main content

Foreign Investment in China's Publishing Industry

10 Foreign Investment in China's Publishing Industry

A. Overview

B. Foreign Investment in the Magazine Market

C. Foreign Investment in Book Publishing, Electronic Publishing and Online Book Selling

D. Foreign Investment in Distribution and Printing

A. Overview

1.Market Entry

When you look at the front page of the China Book Business Report, the most influential trade newspaper in the Chinese publishing industry, you may see three advertisements on the bottom half of the page. On the right are two advertisements: “2004 Book Distribution Logistics Management Forum” and “2004 Open Book Franchise Bookstores.” On the left is the prominent logo of John Wiley with its tagline “Publisher since 1807” on a job advertisement. The ad reads “John Wiley Beijing Branch has vacancies for three positions: copyright manager, copyright coordinator/executive, and account manager-subscription.”

Foreign investment in the publishing industry started as early as one century ago. In 1903, a Japanese firm was allowed to invest in The Commercial Press on the basis of 50% Chinese ownership and 50% Japanese. Later, The Commercial Press became China’s largest and most famous publishing house. (See also Chapter 2-D.)

In 1949, the People’s Republic of China was founded and from 1966 to 1976, the country experienced 10 years of turmoil during the Cultural Revolution. In 1978, China started on its course of economic development, embarking on a new road to reform and opening to the outside world. On December 11, 2001, it became a member of the WTO.

In 1973, the Chinese government invited the German publisher, Springer-Verlag, to hold a mobile book exhibition across the country. This was perhaps the first cooperation between a Western publisher and the Chinese mainland. As a result, Chinese publishers signed the first copyright trade contract, acquiring foreign titles from Springer-Verlag.

On September 13, 1980, the International Data Group (U.S.) formed the China Computer World Publishing with a Chinese partner. China Computerworld became the first joint-venture periodical.

In 1982, the British Publishers’ Association and the British Council jointly sent a delegation that was the first Western publishing delegation to visit since the country opened its doors to the outside world. In 1998, the China National Publications Import & Export (Group) Corporation formed the first publishing joint-venture with a U.K. publisher, Wanguo Academic Press.

However, focused and large-scale foreign investment did not happen until the late 1990s. In 1997, the German company, Bertelsmann AG, launched its book club in Shanghai. Around the same time, many foreign publishers began to set up offices in the Chinese mainland. In February 2002, Sony Music Entertainment Inc. (U.S.) set up the Shanghai Epic Music Entertainment Co., Ltd. (SEME) with Chinese partners. SEME became the first cooperative joint venture to obtain national distribution rights for audio/video products. In December 2003, Bertelsmann obtained partial ownership of the 21st Century Book Chain. This new joint venture is the first foreign-owned joint-venture national book chain.

2. Models of Foreign Investment in China Publishing

There are four models of foreign investment in the Chinese publishing industry: one-time cooperation, long-term cooperation, joint ventures, and sole ownership.

One-time cooperation often refers to cooperation between foreign investors and Chinese publishers on only one title or a set of books. A typical example of this is the collaboration between the Foreign Language Teaching and Research Press (FLTRP) and Longman, a British publisher. Together, they co-published New Concept English. New Concept English is an English learning book that was written by the British for Germans learning English. In 1995, FLTRP and Longman Asia agreed to revise the book, and publish the new edition. The new edition was cowritten by the original British author, Louis George Alexander, and He Qixin, a Chinese author. FLTRP and Longman assigned their own editors to the project. The new edition took two years to finish and consisted of four volumes. Longman and FLTRP are joint copyright owners of the revised edition. The new edition sold two million copies, becoming the most famous English learning textbook in China. It also led to the publication of companion study guides, supplementary readings, a VCD, and other related multimedia products.

Go For It!, co-published by Cengage and the People’s Education Press, is another example of such success. The Chinese mainland’s edition of Go For It! is based on Cengage’s English edition and is revised according to the Curriculum Standard issued by the Ministry of Education of China. This set of textbooks have been approved by the All China ELHI Textbooks Review Board and was adopted on a trial basis in selected schools in 24 provinces beginning in the fall semester of 2003. This set of textbooks consists of five volumes, covering three-year junior high school levels. Companions for the textbooks include student’s books, workbooks, teacher’s books, assessment books, audio tapes and classroom charts. Presently, Go For It! is in used by 7.28 million junior high students, representing 80% of the student population in the textbook trial schools throughout 24 provinces.

Long-term cooperation between foreign and Chinese publishers is common in magazine publishing. Shufu To Seikatsusha Co. of Japan, Hachette Filipacchi of France, Hearst Corporation of the U.S., and the Bauer Group of Germany have all forged long-term cooperative business relationships in China. The common feature of this kind of long-term cooperation is rights licensing. A foreign partner authorizes its Chinese partner to use their name and content for publication in the Chinese mainland on a long-term basis. In exchange, the Chinese partner will pay the foreign partner royalties.

The magazine Rayli Fashion is a typical example. In 1995, Shufu To Seikatsusha Co. of Japan and the China Light Industry Press agreed on a licensing deal to publish Rayli Fashion Quarterly. The magazine, originally priced at RMB13.80 (US$1.67), became an expensive and high-quality women’s magazine. The magazine has won the favor of Chinese white-collar women who responded warmly. Consequently, the two sides launched a series of magazines: Rayli Women’s Glamor, Rayli Lovely Vanguards, and Rayli Home Decorating, which all have become popular and now are published monthly. Rayli has hosted a number of events including a national competition for cover girls, which caused quite a sensation. The China Light Industry Press also published Rayli Mini-series and launched a website for Rayli (www.rayli.com.cn). Rayli Fashion, now priced at RMB20 (US$2.41), sells 250,000 copies per issue, generating monthly revenues of RMB5 million (US$602,410).

Publishing businesses under co-investment are mainly operated through a joint-venture company formed by Chinese and foreign partners. For example, the International Data Group (IDG), Bertelsmann AG, and the Singapore Pan Pacific Publications Co., Ltd. have all formed joint ventures with Chinese partners.

Foreign sole ownership is common in the printing industry. Additionally, some foreign companies set up solely owned offices in China, whose main businesses include marketing and promotion, information collection, copyright trade, direct sales, and public relations. At present, investors from foreign countries, Taiwan, and Hong Kong have set up 500 solely owned printing companies in the Chinese mainland.

B. Foreign Investment in the Magazine Market

Chinese-foreign cooperation in magazine publishing gets the most attention among all foreign investment in the publishing industry. Today, more than 50 foreign magazines have Chinese

language editions. Co-published magazines concentrate on three major areas: technology, business, and fashion. Foreign publishers enter the market with their brand magazines and form cooperative ventures with Chinese partners, either through publishing the Chinese language edition of their brand magazine, or through licensing content and the brand to the Chinese counterparts. In addition to magazine licensing, these media companies also engage in publishing and non-publishing related businesses.

The McGraw-Hill Co. licenses the Business Week brand and content to the China Commerce and Trade Press to publish a Chinese edition. Harvard University collaborates with China Social Science Documentation Publishing House to publish the Chinese edition of Harvard Business Review. In some cases, Chinese publishers only purchase the editorial content of foreign magazines. For example, China Youth Press licenses content from French Figaro Publishing Group and uses the Chinese translation in its own magazine Rainbow. The Italian publisher of Newton and a Japanese publisher are the long-term content providers for Science World, published by the Science Press. Hachette Filipacchi and Shanghai Translation Publishing House jointly publish the Chinese Edition of Elle under both companies’ logos. The Hearst Corporation and Fashion magazine collaborated in a similar way to publish a Chinese version of Cosmopolitan.

Foreign publishers develop different business models through both cooperation and joint investment. Some media companies publish Chinese language editions of their magazines. For example, Ziff Davis (U.S.) launched Chinese language editions of PC Magazine, eWeek, Electronics and Computer, and Computer Products and Distribution.

Foreign media firms that enjoy the greatest success in magazine publishing are the International Data Group, Vogel Burda Media, Hachette Filipacchi, and the Hearst Corporation.

1. The International Data Group

In September 1980, the International Data Group (IDG) co-founded China Computer World (CCW) with the Institute of Scientific and Technical Information (ISTI) under the Ministry of Information Technology of China. Computer World became China’s first weekly magazine published by a joint venture. According to the contract signed then, both sides invested US$250,000 into the joint venture with 49% owned by IDG and 51% by ISTI. The Board of Directors consisted of three Chinese and two American members with a Chinese chairman on the Board. Patrick J. McGovern, IDG Chairman, was Vice Chairman of the joint venture. The contract had a 10-year term. CCW was just the 18th joint venture in China at that time.

In the 1980s, Computer World became an immediate success. It earned US$150,000 in revenue within the first year and recouped the initial investment by the third year. In the 1990s, as computers were becoming popular, Computer World became the messenger for the IT industry and continued to grow. Soon it launched Computer World Monthly, among other magazines, and organized the “China Computer World Fair.” In 1996, the Computer World website was launched, becoming one of the earliest media websites in China. In 1998, CCW established branches in Shanghai and Shenzhen. In 2002, it hosted the first “China IT Fortune Forum.”

Today, CCW has become the most important IT and electronics media group in China. It publishes three newspapers, four magazines and employs 700 people. Since 2001, CCW maintained annual sales of over RMB400 million (US$48.19 million). Its flagship magazine, Computer World, boasts 260 pages per issue, carries 1,000 articles, and 20,000 pieces of commercial information. The Business Publication’s audit confirmed that Computer World had 21,480 subscriptions in June 2003 and it prints 260,000 copies per issue and has a total of 1.8 million readers. The CCW Media Group now has one million subscribers and three million total readers, influencing decision-makers at all levels of the China IT industry.

In 2000, the Periodical Bureau of the GAPP hosted the “Symposium on the Computer World Phenomenon” to introduce the CCW experience to the Chinese media. In 2002, CITIC Publishing House issued the New Media in War—the Legend of China’s Computer World, a biography chronicling the growth of

CCW. In addition to China Computer World, IDG has since invested in 80 other Chinese companies.

2. Vogel Burda Media

Vogel Burda Media also has had an impressive performance in the Chinese mainland. Unlike IDG, it maintains a low profile. Vogel Burda Media is a famous German technical publishing group consisting of Vogel Media and Burda Media. It entered the Chinese mainland in 1995 initially partnering with the Science-Technology Information & Publications Bureau under the Ministry of Machine Building Industry to publish technical magazines. In 1996, it set up an office in Beijing. In 1998, it formed a joint venture, the Beijing Vogel Consulting Co., Ltd. with its Chinese partner and opened an office in Shanghai.

Beijing Vogel Consulting focuses on the machinery and electronics industries. It engages in a wide range of businesses: publishing, distribution, trade fairs, and consulting. It publishes the Chinese editions of its various technical magazines and books and offers translation, editing, page layout, and printing services for product catalogs and brochures. It also provides direct mailing to its various specialized databases. It organizes various mechanical trade shows and promotes clients’ brands at important industrial events. It also advises manufacturing companies on technical issues on doing business in China. Beijing Vogel Consulting has its own Chinese website (www.vogel.com.cn).

For its publishing joint venture, Vogel Burda Media licensed the name and content of its brand-name magazines to its Chinese partners. So far they have co-published the Chinese language editions of Modern Manufacturing, Chip, Automobile Industry, Chemical Industrial Process, MM Plastics, and Beer and Beverage Production.

Many of the these magazines have become the leading trade publications in their respective industries. For example, Chip, co-published with the Electronics Research Institute under the Ministry for the Information Industry, has achieved a circulation of 100,000. Chip has also set up Chip Online (www.chip.cn), Chip Book Club and the Chip CD. Automobile Industry China, published by Vogel Burda Media, has become a well-known trade magazine covering automobile making, automotive equipment, and products, with a circulation of 20,000 copies.

Vogel Burda Media is also involved in planning and publishing computer books and has achieved impressive results. For example, it assisted Electronics Industry Publishing Company in launching the Easy Computing series. Easy Computing is published every two weeks and a single issue can sell 200,000 copies.

Vogel Burda Media also sponsors many international trade shows and conferences. For example, it hosted a summit on “Advanced Manufacturing Technology and Automotive Making— IT for Auto Makers.” It also acted on behalf of CeBIT Hannover to organize CeBIT Asia, Asia’s largest information and communication technology show, and CeBIT CE, Asia’s largest consumer electronics show. It also undertook the editing, interviewing, and publishing of CeBIT Asia and was directly involved in brand promotion and exhibition planning.

3. Hachette Filipacchi in China

Fashion magazines are generally more glamorous than technology magazines. Although Hachette Filipacchi (HF) entered much later than IDG, it enjoys more fame in China’s magazine world and has almost become a name synonymous with prestigious foreign magazines. HF has been in the Chinese market for a decade and its operation extends across the Chinese mainland, Taiwan, and Hong Kong.

HF first started in Hong Kong. In 1987, it launched the earliest Chinese language edition of Elle before launching Car and Driver, and Beauty. In Taiwan, Hachette Filipacchi Taiwan, HF’s wholly owned subsidiary, launched Elle (Taiwan) and Orient Beauty. In addition, HF Taiwan worked with Taiwanese

partners to publish Car and Driver and Marie Claire. It has also compiled and published company magazines for famous brands such as BMW, Lancome, SK-II, Roaming, and Fidelity Securities.

HF expanded into the Chinese mainland in the mid-1990s. Presently, it publishes the Chinese language edition of Elle and Car and Driver through a licensing agreement with the Shanghai Translation Publishing House. It also publishes Woman’s Day; Bo, a sports magazine; and Marie Claire, through licensing with the China Sports Publishing Group. It was reported that HF also took a stake in Air China magazine.

HF’s magazines in China have impressive sales. Elle and Car and Driver sell 200,000 copies and 120,000 copies per issue, respectively.

HF’s Chinese partners in different regions often create alliances to co-market HF’s publications. For example, HF’s Shanghai partner, the Shanghai Translation Publishing House and HF’s Beijing partner, the China Sports Publishing Group, launched a joint promotion of Elle and Marie Claire. Readers who subscribed to both magazines got a 25% discount and a free gift. Promotions like these are rare in the magazine industry.

Today, Hachette Filipacchi Media employs 700 people in Asia and publishes 40 magazines in nine countries, ranging from women’s and men’s fashion, beauty, lifestyle, automobile, movies, and sports.

HF also cooperates with China’s publishing industry in many other ways. The company provides training sessions to Chinese professionals, an initiative much talked about in the industry. It is eager to help Chinese publishers improve their skills in running a successful magazine. HF cosponsored a symposium on managing large-scale magazines with GAPP. It has since become the largest international magazine publishing event in the Chinese mainland. HF’s chairman, president, CEO, deputy CEO, editor-in-chief, and other senior executives were invited to China and they all gave presentations to the editors-in-chief and publishers of 100 Chinese magazines from across the country. HF also arranged for many Chinese magazine publishing delegations to visit France for training and research.

C. Foreign Investment in Book Publishing, Electronic Publishing and Online Book Selling

At present, foreign cooperation with the Chinese mainland’s book publishing industry is mostly confined to copyright trade and editorial initiatives. Presently, there are only two publishing joint ventures: The Commercial Press International and the Children’s Fun Publishing House. However, foreign publishers are also entering the publishing industry through other avenues. For example, Springer-Velag jointly set up a Springer editorial department with Tsinghua University Press. McGraw-Hill has formed a company called Caijing Yiwen Multimedia with the China Financial and Economic Publishing House and has co-launched China’s first series of EMBA textbooks.

The Commercial Press International (CPI) consists of five companies sharing the same name in the Chinese mainland, Taiwan, Hong Kong, Singapore, and Malaysia. Over the past 10 years, the joint venture was devoted to the publication of language, reference books, and books on the humanities. Its publications such as Chinese and English Xinhua Dictionary (with 360,000 copies sold), Modern American English, and Tang Poetry on CD are all popular. It now employs 30 people and published 80 new titles per year with annual sales of RMB20 million (US$2.41 million).

Children’s Fun Publishing Co. Ltd. is another joint venture that is much more active than CPI. Children’s Fun is the first joint venture in children’s book publishing. Founded in October 1992 with the approval of GAPP, the original investors were UDI (U.S.), Egmont, and the People’s Post and Telecom-munications Publishing House (PPTPH). Its main product is a simplified Chinese monthly edition of Mickey Mouse Magazine, the Chinese license of which UDI and Egmont obtained from Disney. On June 1, 1993, the Chinese edition of Mickey Mouse Magazine was officially launched.

Children’s Fun is registered with US$500,000 in capital, with the Chinese side controlling ownership. Today, it employs 100 people. Its headquarters is in Beijing and it has an office in Shanghai along with sales representatives in 25 Chinese cities.

Children’s Fun is considered a successful venture with sales of Mickey Mouse Magazine being very strong. Mickey Mouse has converted from a monthly to a biweekly and each issue sells 350,000 copies, for a total of 700,000 copies monthly. Along with the magazine, Children’s Fun began to publish children’s books and very soon became a leader in children’s book publishing. Now, both its magazine and book publishing business are running smoothly. In 2002, Children’s Fun published 424 new titles and had annual sales of RMB84 million (US$10.12 million) and the company has accumulated assets of RMB63 million (US$7.59 million). Children’s Fun is set to become one of the top five children’s book publishers by 2005.

Children’s Fun publications consist of licensed and local work. Licensed publications include Mickey Mouse Magazine, those based on other Disney characters, English learning, picture books for toddlers, and children’s world classics. Though a joint venture, Children’s Fun has done remarkably well in publishing local cartoons. Local publications accounted for 15% of its total title output in 2002. Lotus Lantern, Monkey King, Snow Child, Little Monk, I am Crazy with Songs, White Dove Island and 3,000 Whys of Blue Cat have made quite an impact (See Figure 10.4.) In 2003, sales of local cartoon books reached RMB20 million (US$2.41 million).

Children’s Fun sponsors and participates in many goodwill events that have had good results. For example, it cosponsored the “Creativity Cup” summer camp with the Central Children’s Working Committee of China Communist Youth League and the China Children’s Newspaper. It also hosted a “National Community Special Team Work” event, the “Election of Mickey Mouse Magazine Cup Best 10 Guardian Angels” in Harbin, the “Mickey Mouse Magazine Cup Good Youngster” event in Shenxiang, the election of “Mickey Mouse Magazine Cup Best 10 Youngsters” in Xi’an, and the election of “Children’s Fun Cup Best Ten Young Pioneers” in Chengdu.

Recently Children’s Fun launched two new magazines: Winnie the Pooh, a Chinese/English publication in collaboration with Movie Comics; and Hercules, a new Disney cartoon magazine. Both magazines have had good sales. It is reported

that Children’s Fun is planning to expand its operations into advertising, rights licensing, book wholesaling, retail sales, and mail order.

Sino-foreign cooperation is also present in electronic publishing and online bookselling. McGraw-Hill, China McGraw-Hill, and China Financial and Economic Publishing House (CFEPH) have jointly formed the Beijing Caijing Yiwen Electronics Co., Ltd. The new company combines the publishing and distribution strength of CFEPH and the content resources of McGraw-Hill to develop business books in electronic format. BTB Wireless (U.S.) and China Educational Electronics Company are collaborating to develop a mobile learning and reading platform.

Among online booksellers, some are joint ventures such as Dangdang.com while others are solely owned by foreign companies such as Bol.com.cn. Dangdang.com is China’s largest online bookstore and is a joint venture of IDG (U.S.), Luxembourg Cambridge Group, Softbank (Japan), and Science and Culture Co. (China). The Bertelsmann Book Club’s website (www.bol.com.cn) not only provides book order services to Chinese customers but is also linked to the Chinese home page of the German Bertelsmann AG (www.bertelsmann.com), making Bertelsmann the first foreign publishing company that has a Chinese home page of its parent company.

D. Foreign Investment in Distribution and Printing

1.Foreign Investment in Distribution

With the liberalization of book distribution, more and more foreign companies are expected to enter the market. The recent promulgation of the Regulations on Foreign Investment in Distribution Channels of Books, Newspapers and Periodicals will provide the legal framework for foreigners to seek business opportunities in publications distribution.

At present, foreign companies enter into distribution in two ways. One way is to set up bookstores, book clubs and online bookstores to sell local publications. The other is to engage in export sales of original English language books.

Foreign companies export books to the Chinese mainland mainly through their China offices or through Chinese book import and export companies. As the number of people who have a good command of English rapidly increases and the government advocates English learning, demands for original English books, especially textbooks, is expected to grow. This will provide a market opportunity for imported books.

Presently, foreign publishers that have direct export sales to the Chinese mainland are mainly educational publishers such as Pearson, McGraw-Hill, Cengage, John Wiley, and Random House. Each has set up a representative office in Beijing which employ about 10 people. Their main responsibility is to promote and sell their original English books to Chinese National universities. Most of their books are imported through the China Import & Export (Group) Corporation. Random House is the foreign trade publisher that is most active in exporting to China.

Of course, export sales are only one business model for foreign publishers to enter the market. These companies listed above are also major licensors of rights to Chinese publishers. Some foreign publishers have a grander vision, however. For example, Pearson is developing many publishing-related education programs in addition to its rights and export sales business. It cofounded Pearson CCTV Media with China Central Television. This joint venture will develop English learning programs to be broadcast at the national level along with publishing a TV tie-in book series. It also provides English training courses. These activities will have great impact on the book industry.

Foreign investment in distribution actually started as early as the mid-1990s. In 1995, the Singapore Pan Pacific Public Co., Ltd. formed a joint venture with the Yunnan Province Xinhua Bookstore to build Yunnan Xinhua Book City. The superstore was opened in 1992 and began to earn profits in 2001. Operating profits have continued to grow in recent years.

In February 2002, Sony Music Entertainment Inc. (U.S.) formed the Shanghai Epic Music Entertainment Co., Ltd., (SEME) with Shanghai Xinhui Record Group and Shanghai Jingwen Investment Co., Ltd. SEME became the first cooperative joint venture to obtain national distribution rights for audio-video products. In December 2003, Bertelsmann took a large stake in the 21st Century Book Chain, which has become the first joint-venture national book chain.

2. Bertelsmann in China

Of all the foreign companies to enter the Chinese book distribution market, the German company Bertelsmann AG has made the most impact. In 1995, Bertelsmann jointly formed the Shanghai Bertelsmann Culture Industry Co., Ltd. with the China Science and Technology Book Company. In 1997, the joint venture invested US$15 million to set up the Bertelsmann Book Club and began the Bertelsmann book distribution business in China. By 2000, the book club had recruited 1.5 million members, becoming the largest Sino-foreign joint-venture book club. According to media reports, the club’s annual sales are over RMB100 million (US$12.05 million).

Currently, the Bertelsmann Director Group manages the operations in China. Its subsidiaries, the Bertelsmann Book Club and Bertelsmann Online, are playing active roles in the book and audio-video retailing market, both on and offline. Bol.com.cn has also developed into one of the best e-commerce sites for media product distribution. To reinforce localization, Bertelsmann Director Group has forged a strategic alliance with Rongshuxia.com, a rising star among original Chinese literature e-publishing sites.

Bertelsmann is also working on plans to build a modern distribution network in East China with Shanghai as its hub. The Bertelsmann Book Club offers door-to-door delivery in seven cities. This service allows book delivery and payment collection to be accomplished simultaneously. The club also offers express delivery in 70 cities. In 2002, Bertelsmann partnered with the Shanghai Branch of Commercial Bank, which is known for its electronic banking services, to issue the Commercial Bank/ Bertelsmann debit card. This card has all the functions of a bankcard but also allows holders to shop at Bertelsmann’s website and at selected shopping centers. Bertelsmann has indeed become a trail blazer in China’s online book sales market.

Bertelsmann has set up Bertelsmann Consulting (Shanghai), Bertelsmann Asia Publishing (Hong Kong), Gruner+Jahr-China Light Industry (Beijing) Publishing Consulting Co., Ltd., and BMG China Inc. (Beijing office) to provide media consulting services in the book, magazine, and music industries. (See Figure 10.6.)

In addition, Bertelsmann AG established Bertelsmann China Holding (Shanghai representative office), which is responsible for internal liaisons and communications with the company headquarters. It also handles all external government and media relations, including cultural exchanges between China and Germany, and is charged with the planning and organization of public events.

In December 2003, Bertelsmann purchased a 40% share of the 21st Century Book Chain, becoming its second largest owner. Sources disclosed that the new joint venture will be named “Bertelsmann-21st Century and will be the first joint-venture national book chain in China. It is also the first investment in a Chinese book distributor by a foreign company. A year ago, Sony Music Entertainment Inc. (U.S.) formed the Shanghai Epic Music Entertainment Co., Ltd. (SEME) with Chinese partners, which became the first joint venture in the distribution of audio-video products.

The three-year-old 21st Century Book Chain solely owns eight chain stores, each of which is 40,000 square meters in size. However, sales were not strong. Evidently, Bertelsmann hopes to venture into the book chain business through its investment in 21st Century.

Bertelsmann has worked out a three-in-one model (book club, online sales, and book chain) in the Chinese mainland. Industry experts point out that Bertelsmann has a first-mover advantage compared with other foreign book distributors. To some extent, the alliance with 21st Century is Bertelsmann’s rehearsal to get to know the distribution sector of the industry.

3. Foreign Investment in Printing

A great number of foreign investors have ventured into the printing industry. According to 2001 official statistics, there are 1,055 printing joint ventures, 473 wholly foreign-funded printing firms, and 267 printing firms serving foreign clients. Foreign investment comes mainly from Singapore, Japan, the U.S., Hong Kong, Taiwan, and Macau.

In 1994, RR Donnelley (U.S.) cofounded Shenzhen Donnelley Bright Sun Printing Co., with the Shenzhen Petrochemical Co., Ltd. The joint venture became the largest printing center for China’s yellow pages. In 2002, RR Donnelley and the Shanghai Press and Publications Administration jointly invested US$30 million to set up the Shanghai-Donnelley Printing Co. This Shanghai joint venture is poised to become China’s largest printing facility serving the Chinese market, along with Amercian and European clients.

MAN Roland, the world famous manufacturer of web-fed presses, has established MAN Roland (China) Ltd. with seven offices, including Shanghai MAN Roland (Shanghai) Ltd. In January 2004, MAN Roland (China) set up its seventh printing operation in Chengdu to serve customers in Western China. MAN Roland (China) pointed out that the average spending per capita in printing materials in Western China is only half of the national figure and printing in the region accounts for 10–15% of the national total. The economy of the West is growing rapidly especially under the Chinese government’s “Go West” strategy. MAN Roland (China) believes the printing industry in the West has tremendous potential for development in the future.

Foreign investment in the printing industry is concentrated in Guangdong, Shanghai, Jiangsu, and Beijing. Guangdong Province is the largest printing center and is heavily funded by foreign capital. In 2002, about RMB552 million (US$66.51 million) of foreign investment flowed into Guangdong to fund printing facilities. Shenzhen’s printing output value accounted for 20% of the national total. In Shanghai, the annual operating revenues of foreign-funded printing firms exceeded RMB4 billion (US$481.93 million). Many foreign printing firms perform well— Leefung-Asco Printers Ltd., a Japanese investment, has annual operating revenues of over RMB100 million (US$12.05 million).

Foreign investment is not limited to publishing. If we look further, we find that foreign companies have ventured into all areas of the Chinese media. Foreign firms similar to Hachette Filipacchi are operating all across the Chinese mainland, Taiwan, and Hong Kong. Typical examples are Time Warner and News Corporation. These two media giants were the first to obtain broadcasting rights in the Chinese mainland. Time Warner owns CETV, China Entertainment Television, Time, and Fortune (Chinese language edition). In Taiwan, Time Warner publishes Time Express, Time for students and Popular Science through rights licensing. In the Chinese mainland, Time Warner formed an alliance with FM365.com, a popular website operated by the Legend Group, Cthe Chinese mainland’s largest IT corporation. Time Warner obtained permission from the Chinese government to broadcast its CETV, 24-hour Mandarin Chinese information and entertainment channel in Guangdong Province. Time Warner is the first foreign cable TV company to gain a foothold in the Chinese mainland’s market.

News Corporation owns Star TV, Star Plus, Star Satellite TV, Vijay, and Phoenix TV in Hong Kong. It also owns a cable TV station in Taiwan. In 1999, representative offices were set up in Beijing and Shanghai. It was the first foreign media company that obtained permission to open an office in Shanghai. In December 2001, News Corporation’s wholly owned subsidiary, Star Satellite TV, obtained permission to broadcast Mandarin Chinese programs in Guangdong. News Corporation also moved into the Chinese telecom market by buying a stake in the state-owned China Netcom. It hopes to provide channels, programming, and mobile services throughout China.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Foreign Investment in China's Publishing Industry." Publishing in China: An Essential Guide. . Encyclopedia.com. 22 Nov. 2018 <https://www.encyclopedia.com>.

"Foreign Investment in China's Publishing Industry." Publishing in China: An Essential Guide. . Encyclopedia.com. (November 22, 2018). https://www.encyclopedia.com/books/international-magazines/foreign-investment-chinas-publishing-industry

"Foreign Investment in China's Publishing Industry." Publishing in China: An Essential Guide. . Retrieved November 22, 2018 from Encyclopedia.com: https://www.encyclopedia.com/books/international-magazines/foreign-investment-chinas-publishing-industry

Learn more about citation styles

Citation styles

Encyclopedia.com gives you the ability to cite reference entries and articles according to common styles from the Modern Language Association (MLA), The Chicago Manual of Style, and the American Psychological Association (APA).

Within the “Cite this article” tool, pick a style to see how all available information looks when formatted according to that style. Then, copy and paste the text into your bibliography or works cited list.

Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia.com cannot guarantee each citation it generates. Therefore, it’s best to use Encyclopedia.com citations as a starting point before checking the style against your school or publication’s requirements and the most-recent information available at these sites:

Modern Language Association

http://www.mla.org/style

The Chicago Manual of Style

http://www.chicagomanualofstyle.org/tools_citationguide.html

American Psychological Association

http://apastyle.apa.org/

Notes:
  • Most online reference entries and articles do not have page numbers. Therefore, that information is unavailable for most Encyclopedia.com content. However, the date of retrieval is often important. Refer to each style’s convention regarding the best way to format page numbers and retrieval dates.
  • In addition to the MLA, Chicago, and APA styles, your school, university, publication, or institution may have its own requirements for citations. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list.