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Media Now Fourth Largest Industry in China
With the development of the Chinese economy and a booming advertising business, the Chinese media industry has overtaken the tobacco industry with annual profits of over 100 billion yuan (US$12 billion) to become the fourth largest industry in China this year.

According to the Beijing Business Today, many investors are keeping a keen eye on this giant sunrise industry and its huge profit potential. A recent survey shows that the return on investment rate for Chinese newspapers has risen from 17 percent to 50 percent, much higher than compared with other industries. So far, China?s first four key industries, in order, are the electronic information industry, the manufacturing industry, the travel industry and the media industry.

The 16 newspaper groups, including the Guangming Daily group, the Nanfang Daily group, the Yangcheng Evening Post group and the Economic Daily group, have assets each totaling millions of yuan. All groups have a series of secondary publications. They are also realizing the benefits or sharing resources and large scale operations. 

China has the largest broadcast television network in the world. Statistics show that broadcasts cover 93 percent of the population and that TV is available throughout 94 percent of China, creating an audience of over 1 billion people. Cable TV now covers 3 million kilometers and reaches a total of 100 million subscribers. At the same time, China?s Internet media is developing rapidly. By the end of 2000, 2000 of the 10,000 mass media enterprises had their own web based news sites.

A study by ACNielsen Media Research suggests that despite the influence of the global economic turndown, China has maintained an increase of 16 percent in advertising revenue. Advertising income for TV, newspapers and magazines all reached new highs of US$8.1 billion, US$2.9 billion and US$200 million respectively, with separate increases of 17 percent, 13 percent and 21 percent.

Bids for CCTV prime-time advertising have also reached new levels. The Jiangsu-based Panda Group recently won a bid to air advertisements at a cost of over 100 million yuan (US$12 million) and became the first enterprise to spend more than 100 million yuan for the privilege.

Vice-Director of the Press and Publication Administration Liu Bingjie said during an interview with the Financial Times that the relevant departments are now working to formulate regulations for foreign investment entering the Chinese publishing industry, which will be released by the end of the year.

China has promised to partly open up its publishing industry in some cities during its first year of WTO membership, and to totally open up the advertising market within three years. After the third year the wholesale market will also open up. Within five years, the Press and Publication Administration will lift all restrictions, including the number, area and share for all distribution enterprises, said Liu.

Liu went on to say that China is going to conduct some experiments. First China will allow an inflow of capital from Hong Kong, Macao and Taiwan. Policies for overseas capital investment will then be born out of results from investment from these areas.

So far, some foreign enterprises have applied to the Press and Publication Administration for licenses. Officials will only permit those who qualify, said Liu.

(China.org.cn by Zheng Guihong, December 6, 2002)


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