The Development of the Cultural Industry in China: Theories, Policies, and Strategies (China Connections) 9811933545, 9789811933547

Table of contents :
Contents
1 Preface
1 Cultural Industry Development and the New Culture Movement 2.0 in China
2 Introduction: What Kind of a Country Are We Bringing into the Twenty-First Century by Developing the Cultural Industry?
1 China’s Cultural Development Strategies at the Turn of the Century
2 National Cultural Governance: Policies for Developing the Cultural Industry
3 Future Development, Market Construction, and System Innovation in the Chinese Cultural Industry
3 The Essence and Evolution of the Cultural Industry
1 The Essence of the Cultural Industry: An Overview of Its Sociocultural System
2 Social Relations in the Cultural Industry: Productive Forces and Relations of Production
3 The Social Evolution of the Cultural Industry: A Process Similar to Biological Evolution
4 The Spatio-Temporal Structure of the Cultural Industry
1 Cultural Economics of Space and Time
2 Cultural Industry Development and Historical Geography
3 New Urbanization: Reestablishing the Spatial Order of Cultural Industry Development in China
5 Building the Cultural Industry Ecosystem
1 The Awareness of Conservation in Cultural Industry Development
2 Resources and Environments for Developing China’s Cultural Industry
3 The Low-Carbon Development of China’s Cultural Industry
6 Justice in the Cultural Industry
1 Cultural Industry Development and National Cultural Security
2 The Power and Rights of the Cultural Industry
3 The Public Responsibilities of the Cultural Industry
7 The Government, the Cultural Market, and Cultural Industry Planning
1 The Government and the Cultural Market
2 Cultural Industry Planning
3 The Hu Line as a Principle of Spatial Planning in the Cultural Industry
8 Key Factors in the Sustainable Development of China’s Cultural Industry
1 The Measure of Rational Development in the Cultural Industry
2 A Greater Voice in the Realm of Data
3 Data Mining and Its Strategic Application
9 The Way Forward for the Strategic Forces of China’s Cultural Industry
1 Establishing an Innovation System and Development Model Characterized by the Trinity of Traditional, Modern, and Emerging Cultural Industries
2 Redirecting China’s Policies on the Cultural Industry System Based on the Division of Labor in the Cultural Industry Across the Urban Hierarchy
3 Creating a Modern Cultural Market System Open to all Regions Large and Small
4 Providing Vigorous Support for Non-Government-Run Cultural Industries While Developing State-Owned Cultural Industries
10 The Structural Adjustment and Strategic Innovation of China’s Cultural Industry
1 Several Issues Concerning Strategic Relations in the Development of China’s Cultural Industry
2 The Strategic Restructuring and System Innovation of the Cultural Industry
3 Cultural Restructuring—The Way Out for the Development of China’s Cultural Industry
11 The Relationship Between China and the World in the Development of the Cultural Industry
1 The WTO and the Innovation System of China’s Cultural Industry
2 Taking China’s Cultural Industry onto the Global Stage
3 Building a Harmonious World and the Development Strategy for China’s Cultural Industry
12 Conclusion: The Development of China’s Cultural Industry Stands at a Crossroads
1 Innovation: A Key Requirement for the Development of China’s Cultural Industry
2 The Middle-Income Trap and Thucydides’ Trap: Two Major Threats to the Development of China’s Cultural Industry
3 Shifting Cultural Power: “Heavy Is the Head That Wears the Crown”
Afterword

Citation preview

CHINA CONNECTIONS

The Development of the Cultural Industry in China Theories, Policies, and Strategies

Huilin Hu

China Connections

This series between China’s Social Sciences Academic Press and Palgrave Macmillan explores the connections which exist between China and the West, and those which exist between China’s heritage and its relevance to the key challenges of our modern world. The books in this series explore China’s historical legacy, and how the changes and challenges faced by China, and the lessons learned, are central to solving the global issues we face today in fields as varied as health, education, employment, gender equality, and the environment. This series makes a case for the importance and forms of connections between China and the rest of the world, offering a platform for the active development of research and policy connections which brings together scholars from across the geographical and topical spectrum to showcase the very best of Chinese scholarship to the world.

Huilin Hu

The Development of the Cultural Industry in China Theories, Policies, and Strategies

Huilin Hu Shanghai Jiao Tong University Shanghai, China Translated by Meiyu Li Shanghai, China

ISSN 2662-7868 ISSN 2662-7876 (electronic) China Connections ISBN 978-981-19-3354-7 ISBN 978-981-19-3355-4 (eBook) https://doi.org/10.1007/978-981-19-3355-4 Jointly published with Social Sciences Academic Press The print edition is not for sale in China (Mainland). Customers from China (Mainland) please order the print book from: Social Sciences Academic Press. Translation from the Chinese language edition: “文化产业发展的中国道路——理论·政策· 战略” by Huilin Hu, © Social Science Academic Press 2018. Published by Social Science Academic Press. All Rights Reserved. This international edition is exclusively licensed to Springer Nature Singapore Pte Ltd. for worldwide distribution outside of China. © Social Sciences Academic Press 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publishers, whether the whole or part of the material is concerned, specifically the rights of reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publishers, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publishers nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publishers remain neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Contents

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Preface 1 Cultural Industry Development and the New Culture Movement 2.0 in China Introduction: What Kind of a Country Are We Bringing into the Twenty-First Century by Developing the Cultural Industry? 1 China’s Cultural Development Strategies at the Turn of the Century 2 National Cultural Governance: Policies for Developing the Cultural Industry 3 Future Development, Market Construction, and System Innovation in the Chinese Cultural Industry The Essence and Evolution of the Cultural Industry 1 The Essence of the Cultural Industry: An Overview of Its Sociocultural System 2 Social Relations in the Cultural Industry: Productive Forces and Relations of Production 3 The Social Evolution of the Cultural Industry: A Process Similar to Biological Evolution

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The Spatio-Temporal Structure of the Cultural Industry 1 Cultural Economics of Space and Time 2 Cultural Industry Development and Historical Geography 3 New Urbanization: Reestablishing the Spatial Order of Cultural Industry Development in China

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Building the Cultural Industry Ecosystem 1 The Awareness of Conservation in Cultural Industry Development 2 Resources and Environments for Developing China’s Cultural Industry 3 The Low-Carbon Development of China’s Cultural Industry

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Justice in the Cultural Industry 1 Cultural Industry Development and National Cultural Security 2 The Power and Rights of the Cultural Industry 3 The Public Responsibilities of the Cultural Industry

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The Government, the Cultural Market, and Cultural Industry Planning 1 The Government and the Cultural Market 2 Cultural Industry Planning 3 The Hu Line as a Principle of Spatial Planning in the Cultural Industry Key Factors in the Sustainable Development of China’s Cultural Industry 1 The Measure of Rational Development in the Cultural Industry 2 A Greater Voice in the Realm of Data 3 Data Mining and Its Strategic Application The Way Forward for the Strategic Forces of China’s Cultural Industry 1 Establishing an Innovation System and Development Model Characterized by the Trinity of Traditional, Modern, and Emerging Cultural Industries

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Redirecting China’s Policies on the Cultural Industry System Based on the Division of Labor in the Cultural Industry Across the Urban Hierarchy Creating a Modern Cultural Market System Open to all Regions Large and Small Providing Vigorous Support for Non-Government-Run Cultural Industries While Developing State-Owned Cultural Industries

The Structural Adjustment and Strategic Innovation of China’s Cultural Industry 1 Several Issues Concerning Strategic Relations in the Development of China’s Cultural Industry 2 The Strategic Restructuring and System Innovation of the Cultural Industry 3 Cultural Restructuring—The Way Out for the Development of China’s Cultural Industry The Relationship Between China and the World in the Development of the Cultural Industry 1 The WTO and the Innovation System of China’s Cultural Industry 2 Taking China’s Cultural Industry onto the Global Stage 3 Building a Harmonious World and the Development Strategy for China’s Cultural Industry Conclusion: The Development of China’s Cultural Industry Stands at a Crossroads 1 Innovation: A Key Requirement for the Development of China’s Cultural Industry 2 The Middle-Income Trap and Thucydides’ Trap: Two Major Threats to the Development of China’s Cultural Industry 3 Shifting Cultural Power: “Heavy Is the Head That Wears the Crown”

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CHAPTER 1

Preface

1 Cultural Industry Development and the New Culture Movement 2.0 in China There is a profound new cultural transformation unfolding in today’s China. Unlike any previous similar movements, this so-called New Culture Movement 2.0 has revolutionized the way in which culture is constructed and developed. In addition, it is driving and affecting fundamental changes in the structure, path, and pattern of, as well as the impetus for, China’s political, economic, and social development. In this current movement, the cultural industry serves as a force at its core or, in other words, the “eye of the storm.” In a creative way, it is simultaneously deconstructing the cultural pattern, perceptions, and structure formed under the planned economy and reconstructing, with its unique form and strength, the cultural, economic, and political landscape of this country. I The ongoing New Culture Movement 2.0 is set in the post-Cold War era marked by a diversified world landscape, economic globalization, and a new global cultural order being established. Meanwhile, domestically, China is integrating itself into the modern world system and redefining its strategies and strategic goals for national development. It’s an epochal

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movement with distinguishing features composed of such key factors as the shifts in political, economic, and social power. Judging from the internal factors of culture, this movement is characterized by the following trends: 1. Cultural Construction Takes on Multiple Forms Ideological construction has always been the key to China’s cultural construction. In dealing with the relationship between culture and politics and economy, we have long based our practice on Chairman Mao’s classic statement in The Theory of New Democracy: Politics and economy are reflected in culture, which in turn reacts upon them. Even to this day, this theory remains an important guiding principle for the proper interaction between the three. What Chairman Mao referred to as “culture,” however, was culture as an ideology and did not include cultural undertakings and industry. This is consistent with the fact that the Communist Party of China (CPC) was not the party in power at that time. The idea of “developing cultural undertakings and industry” was put forward for the first time and systematically expounded at the Sixteenth National Congress of the CPC. For the Party, this represents a major theoretical revolution in its ideology, which was transformed from solely highlighting culture as an ideology and ideology as a form of struggle to simultaneously promoting culture as an ideology, cultural undertakings for public welfare, and cultural industries for commercial interests, all in the service of cultural progress and social harmony. Profound changes in how culture is produced, disseminated, and accepted will inevitably revolutionize the forms and patterns of ideological and cultural construction. Policies for diversified cultural industry development and cultural market access, for example, present new requirements for cultural advancement and ideological management. Meanwhile, the influx of foreign capital and social capital into the cultural industry also brings with it a new challenge: profit-seeking capital is bound to interfere with the development of advanced culture. Cultural construction essentially involves ideological construction that centers around thoughts, theories, and ethics, but different forms and methods can be adopted in different historical periods. One important rule of governance, therefore, is to further the construction of ideology and culture and achieve their

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goals by fully understanding and applying new historical forms based on past historical periods and tasks. Such shifts in cultural understanding have guided China’s cultural construction back into a rational course. It marks the beginning of a new cultural value system established by the governing party of the country. Culture is no longer viewed purely as an ideology. Instead, based on its brand-new insight, the Party has embarked on a new stage of developing a new socialist culture with Chinese characteristics in an all-around way and thereby mapped out a new route and structure: Culture as an ideology—Ideological revolution—Establishment of a value system; Cultural undertakings—Establishment of a public cultural service system; Cultural industry—Cultural market system—Establishment of a market competition system. From culture as an ideology in The Theory of New Democracy (1942) by Chairman Mao to the first-ever inclusion of cultural undertakings and industry at the Sixteenth National Congress of the CPC, cultural construction in China is gradually taking on multiple forms. In terms of cultural governance, the CPC has assumed new historical missions: to promote cultural progress and ideological construction, to meet the spiritual and cultural demands of the people, and to liberate and develop social productivity by developing the cultural industry. 2. Cultural Development Is Driven by Diverse Forces For quite a long time, ideological construction that focuses on thoughts and theories had been a major engine of development for socialist culture in China. Since reform and opening-up began in the country, especially at the beginning of the twenty-first century, such dynamics have changed dramatically due to the rise and growth of the cultural industry. This burgeoning industry is embraced as a new driving force behind cultural development. An ideological revolution inevitably leads to an institutional revolution and the diversification of motive forces for cultural development. As such a new cultural productive force, the cultural industry is thus introduced and promoted as part of the New

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Culture Movement 2.0 in China. It becomes one of the most decisive factors in the cultural development of this country, as we cannot strengthen the public-interest development of culture and overall cultural prowess without promoting the cultural industry. In 1985, culture and art were incorporated for the first time into the tertiary industry by the National Bureau of Statistics (NBS), which served to identify and recognize the role that they play in economic and social development. With the classification system of cultural industries introduced in 2004, strategic adjustments were made to China’s industrial structure based on existing conditions. As the largest industrial restructuring since the reform and opening-up, the system categorized cultural industries and determined their position in industrial policies. It proposed new national standards for industrial development and legitimized a new round of plans for national economic and social development. These were important national industrial policies that will continue to shape the structure and spatial distribution of driving forces behind China’s cultural development. Thanks to such an unprecedented combination of forces, a new course of development is set by the New Culture Movement 2.0.1 By building a new economic system where public ownership plays a major role and various forms of ownership coexist, China has created a cultural market with multiple players. Nongovernmental sectors and foreign capital, in particular, give fresh impetus to the cultural construction and development of the country as they participate in the commercial operation of cultural industries within the scope of national laws and regulations. 3. Cultural Development Becomes Market-Oriented All changes in human society originate from our needs. They are the most fundamental factor motivating all development. They vary with the times and institutional conditions. China’s planned economy used to be a mechanism that mirrored the needs of our national economic and social development. There was no doubt the best option when China’s new culture development was in need of full-scale reconstruction. Over time, however, its focus has shifted to more subjective needs, neglecting the

1 The classification was later revised by the NBS in 2012 and 2018.

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objective inherent needs of cultural development as well as their independence in resource allocation. As a result, pushing the innovation of the mechanism of cultural development has become one of the priorities in the New Culture Movement 2.0. Domestically, there is a need for cultural development as China sets out to restructure the socialist market economy; meanwhile, with its accession to the World Trade Organization (WTO), the country is looking forward to participating in global resource allocation and cultural market competition. Both needs have altered the mechanism and structure of driving forces behind cultural development. We must now give full play to the fundamental role of the market in allocating resources and transform the mechanism of cultural development from a planned economy to a marketoriented one. China needs to sharpen its cultural competitive edge by developing the market economy if it wants to partake in the allocation of global cultural resources and cultural market competition. This is essential to China’s new culture in the twenty-first century. It is this market orientation that provides internal momentum for the New Culture Movement 2.0. 4. The Material Expression of Cultural Change Goes Digital The change in a cultural carrier is a symbol of all new cultural changes. Digitalization is the most important revolution in current cultural development. It has not only changed the production, consumption, and dissemination of cultural products but, most importantly, reshaped people’s cultural lifestyles and created new values. The tension between culture and technology will be fundamentally resolved by the information industry. Technological advances, once used for cultural purposes—and they have already been —will quickly and almost inevitably lead to changes in the way culture develops, often against the will of cultural entities. Changing the forms, areas, and ways in which entities in the cultural industry compete and vigorously promote the development of new cultural industries have become an important part of global cultural transformation. Countries coveting the driving seat in global cultural changes are increasingly using digitalization to control the cultural division of labor and cultural market trends, thereby achieving cultural control.

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New cultural industries guided by digitalization are restructuring China’s cultural industry and ecosystem in dramatic ways. While creating a fresh cultural form, digital culture is also shaping a new cultural generation. The younger generations’ preference for digital culture indicates a change in cultural orientation among them, which bears as much significance as the transition from classical Chinese to vernacular Chinese during the May Fourth Movement. The question is whether we can take the initiative of cultural creation amid this irreversible change and forge another new culture. This brand-new cultural form that emerged out of digitalized cultural industries is coming into sharp conflict with traditional cultural forms. Can China seize the initiative in its cultural construction and create a modern culture that will be worthy of the name of excellent traditional culture in the more distant future? The key is to stay on top of the trend of modern new cultural development. 5. Cultural Restructuring and Systematic Innovation Are at the Heart of the New Culture Movement 2.0 The strategic adjustment of the structure of market entities must go hand in hand with the innovation of the market management system. More specifically, to fully unleash cultural productive forces, we must racially transform cultural production relations; the success of China’s new culture transformation relies upon the overall innovation of the national cultural system. Contradictions still exist between advanced and backward cultural production relations, between backward cultural productive forces and the ever-growing spiritual and cultural consumption demand of the people, and between the inevitable demand of history and the difficulty in meeting such a demand. The New Culture Movement 2.0, therefore, serves to offer new wisdom and systematic arrangements for overcoming these contradictions. The current round of cultural restructuring that is gaining momentum is the product of deep and thorough innovation driven by the governing party. However, instead of completely repudiating the original system, it aims at reflexive revolution and selfimprovement. Specifically, the country is now actively seeking a strategic breakthrough for culture to develop harmoniously alongside the national economy and society, trying to overcome path dependence in our choice of system and free itself from historical limitations in system design. This is the biggest and most fundamental difference between the ongoing

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New Culture Movement 2.0 and the first new cultural transformation in Chinese history since the beginning of modern times—namely, the New Culture Movement that dates back to the 1910s. 6. The New Culture Movement 2.0 Seeks to Rejuvenate Chinese Culture by Participating in the Global Cultural Competition China’s New Culture Movement 2.0 takes place in the context of economic globalization. The country is further deepening reform, opening wider to the outside world, and integrating itself deep into the modern world system, which means its new culture transformation is inevitably an important part of the reconstruction of a new global cultural order. Therefore, the strategic intent and direct goal of this new cultural transformation are to restructure the forces behind China’s cultural development while competing with international cultural capital and to rejuvenate the fine culture of the Chinese nation in the process of its peaceful rise. II This ongoing New Culture Movement 2.0 starts with the cultural industry, an industry that is altering China’s cultural construction and development in a whole new way and affecting the development of Chinese society as well as the innovation and implementation of national strategies. In this process, cultural industry development and the new culture transformation begin to follow a new direction. 1. The goal of building a harmonious and moderately prosperous society in all respects will be a guide to correcting the strategic direction of China’s cultural industry development As one of the symbols of a moderately well-off society, social harmony describes an ideal state of society in the form of a social movement. It is a national development strategy proposed by the CPC during a period of strategic opportunities and intensifying contradictions that aims at seizing such opportunities while overcoming contradictions. At present, China’s cultural development is hindered mainly by the disharmony between backward cultural relations of production and advanced cultural

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productive forces and between unbalanced and inadequate development and the people’s ever-growing needs for a better life. Such contradictions are also a major factor driving China into the current cultural crisis and an obstacle preventing a society of moderate prosperity from being built. In the process of creating a society of harmony, cultural construction should focus on overcoming the above cultural barriers, eliminating cultural crises, and ensuring that citizens can fully exercise their cultural rights, enjoy their cultural interests, and establish a cultural democracy. The extent to which these tasks are accomplished will determine whether we can democratize China’s new culture transformation and create new cultural values. To develop cultural industries is to provide citizens with new ways to exercise their cultural rights and interests while supporting cultural undertakings with capital and products. Therefore, China’s strategy of cultural industry development will now be guided and measured by our ability to turn positive outcomes into public cultural products and services available for public consumption, convert practical economic results into feasible social benefits, and provide a value system and value support for social equity and citizens’ mental health. During that process, cultural industries should serve as an indispensable tool of expression, communication, and coordination that helps build a society of harmony by playing a major role in setting public agendas and creating a positive cultural space where our core values are embraced and diverse values respected. 2. Cultural restructuring will blaze a new trail and invent a new form for China’s cultural innovation system Cultural restructuring is an important goal and necessary strategic process for Chinese reform. It is one of the key elements of the ongoing New Culture Movement 2.0, which, unlike the first New Culture Movement during the May Fourth period, is initiated by the governing party of the country. Based on the current status of world culture, they have decided to revolutionize the cultural system and strategically shift the role ideology plays in governance. The deepening of cultural restructuring essentially involves transforming the cultural construction system from the unitary one formed under a planned economy into a “two-wheel drive” formed under a market economy that promotes both the commercial and public-interest development of culture. Such transformation is not only

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absolutely necessary if a wholly harmonious socialist society is to be built but also instrumental in enhancing China’s overall prowess. These realizations are based on a fresh assessment of the major changes in international ideological conflicts in the post-Cold War era. Strategic shifts in the role ideology play in governance inevitably lead to strategic shifts in who owns the means of ideological production. As investments in the cultural industry from nonpublic sources begin to increase, which is called for by the strategy for innovating the country’s cultural system, China’s cultural landscape will be altered. This is reflected in the emergence of such new notions as “governing for the people” and “governing on behalf of the people” in the evolution of the role ideology plays in governance. Diversification of the source of investment creates fission within the existing cultural landscape and generates new tensions and demands. Such new demands include profound yearnings for a culture of harmony and the ability to exercise citizens’ cultural rights to the fullest extent. Whether we can overcome the institutional obstacles to and structural tensions in the development of China’s cultural industry and ensure that all citizens can fully exercise their cultural rights have become key measures of progress in the construction of a culture of harmony in this country. Driven by cultural restructuring, the government is changing its role from the operator of culture to the administrator of culture and provider of public cultural products and services. This transition in government functions is essentially a structural change of cultural power, from a centralized structure to a decentralized one. The government is not giving up its cultural power as much as democratizing this power by allowing citizens to fully exercise their cultural rights through the devolution of power. Such a power shift has optimized the quality and formation of cultural productive forces and modernized cultural governance by the CPC, translating the results of cultural restructuring into the cultural interests of the majority. A new landscape is thus formed in which culture is jointly run by the government, society, and citizens. 3. Digitalization will continue to guide the technological revolution in the development of China’s cultural industry While profoundly altering the growth pattern of traditional cultural industries, the digital trend also poses a great challenge to their survival and development. Where tradition collides with modernity, intense

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competition becomes inevitable. As traditional cultural industries sharpen their own competitive edge through digitalization, newly emerging cultural industries will have to revolutionize their content. Digitalizing cultural industries, which is a general trend in the New Culture Movement 2.0, will certainly bring about even more radical reform in China’s cultural construction. When science and technology drive the production and dissemination of ideas, digital technology becomes a manifestation of culture and cultural power at the same time. Its role needs to be shifted— from a means and tool to a form of power and content-provider—if digital technology is to be integrated into our ideology. Failure to make the shift will plunge China’s cultural industry and the New Culture Movement 2.0 into a deep crisis. As a result, how, to what extent, and in what breadth the high-end market of cultural digital technology can be occupied is crucial not only to the technological revolution but also to the new culture transformation. Just as the Renaissance Movement in Europe was also a scientific and technological revolution that shaped subsequent centuries, profound changes in science and technology will definitely lead to new cultural changes and great progress in civilization. 4. The rise of large regional clusters of cultural industries will alter the power distribution of China’s cultural industry, and traditional development patterns and administrative systems (characterized by the administrative barriers between departments and regions) will change fundamentally as the cultural economy undergoes geographical reconstruction All cultures exist in the physical space. They are constructed, manifested, and expressed in the form of space. The New Culture Movement 2.0 is a cultural transformation that creates future forms of cultural space while deconstructing existing ones. This process results in a cultural industry that is both cultures in the form of space and space in the form of culture. Today, it manifests itself not only as systematic spaces that form the structure of interests but also as multiple spaces chosen by various development patterns, underneath which lie deep cultural motivations. When culture is constructed and obtains legitimacy in a certain place, and without breaking this legitimacy, the rationality of the spatial

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development of culture cannot be restored; the only possible approach to this new culture transformation is to break through the existing space of established interest structure and development patterns on a systematic level. China’s cultural restructuring has been advancing in the direction of the cross-industry, cross-regional, and cross-media development of cultural industries to disrupt traditional spatial patterns in recent years. The regular spatial allocation of essential resources in the cultural industry is limited by the system of administrative divisions. This is why we cannot strategically integrate the regional distribution of cultural industries while planning new layouts of regional economies. The Yangtze River Delta, the Pearl River Delta, the revitalization of Northeast China, the development of the western region, and the rise of central China are new concepts of harmonious regional development. They require the removal of all artificial constraints that hinder the scientific development of economic geography and human geography. This regional development is evolving into a new strategic pursuit for the cluster development of large cities, deeply affecting the geographical redistribution of China’s cultural economy. How do we maximize benefit growth with minimum resource consumption by integrating regional resources and forces to form common markets and common interest groups? This question needs to be answered in the process of cultural industry development and the New Culture Movement 2.0, as well as in the development of society as a whole. The urbanization of China’s rural areas is infusing new wisdom into the traditional concept of administrative division, providing plenty of inspiration and room for reform for the regional development and distribution of cultural industries. The central and western regions used to write a brilliant chapter in history as important creative forces in forming the Chinese cultural landscape. Through the New Culture Movement 2.0, China seeks to recreate the past glory of its civilization and shape a new cultural landscape that promotes the harmonious development of all regions by altering the power structure of its cultural industry. Without the strategic rise of cultural industries in Central and West China, there is no way for the cultural industry and cultural construction of the country to take root and blossom across all regions; there would be no overall competitive edge of the Chinese cultural industry to speak of, let alone the possibility of rejuvenating Chinese culture in a way that is historically unparalleled.

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5. The emergence and development of the creative cultural economy will drive the cultural transformation in China’s economic development and provide new creative space for the construction of its cultural ecosystem As China’s cultural construction takes on multiple forms, there is no longer a distinct dividing line of culture and aesthetics between the material economy and the nonmaterial economy. As the nonmaterial economy begins to accelerate wealth growth, the material economy becomes a new platform for cultural presentation and an important part of our cultural ecosystem. A prime example is the aesthetic makeover of former industrial bases in the process of modernizing our living environment and readjusting economic structure. Using their experience in the artistic reconstruction of traditional industrial structures with modern cultural symbols, Beijing, Shanghai, Hangzhou, and other cities have turned every cultural relic into a piece of artwork. Such artistic and aesthetic renewal has given the material economy new social values. Artistic design and creation, while innovating traditional manufacturing and the old economy, are also altering people’s aesthetic understanding of the symbols of industrial civilization, such as abandoned industrial bases and dilapidated factory buildings. The rediscovery of historical and humanistic values in the process of industrialization will provide a great impetus for the development of cultural industries and our way of thinking about them. As the material economy transitions into the domain of the nonmaterial economy, cultural industries will be innovated with new productive forces. In the meantime, resources and elements of traditional Chinese culture will show new vitality. 6. The cultural industry faces a strategic shift of its own growth pattern where copyright-based industries will dominate the cultural industry and become a strategic sign of its overall competitive strength The cultural industry is an intensive form of cultural economy, as it is essentially determined by intellectual creations. This is one important reason why it is targeted in the strategic adjustment of the economic structure and the strategic transformation of the economic growth pattern. A proposition is thus made: The cultural industry is facing a strategic shift in its own growth pattern. Strategically speaking, one of the biggest differences between China’s foreign cultural trade and that

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of Western developed countries is that we export products while they export copyrights. The costs and benefits of the two present a stark contrast. In fact, the surplus and deficit in copyright trade reflect the competitive strength of the cultural industry of a country or region and epitomize its cultural soft power. Therefore, copyright-based industries will dominate the cultural industry and become a strategic sign of its overall competitive strength. For China’s cultural industry to take off in the international arena, we should not follow the same path of extensive growth through processing and replicating low-end products. Only by strategically shifting its growth pattern can the cultural industry play a strategic role both culturally and economically in the process of national economic and social development and the construction of a society of harmony. Only in this way can the New Culture Movement 2.0 foster its inherent ability to grow in a market-oriented manner under the market economy. This strategic goal can be achieved only if our capability for cultural innovation is comprehensively and fundamentally improved. 7. The further improvement of cultural laws and the establishment of a national cultural security system will usher in a new historical period of law-based management for China’s cultural democracy An open cultural market is not a market of anarchy. The degree to which a country opens its cultural market is a measure of its cultural democracy. So is the modernization and standardization of this market and to a greater extent. Such a measure is manifested in how modernized a cultural legal system is, as the spirit of constitutionalism is the ultimate embodiment of a country’s process of cultural democracy. There remains a long way to go before a sound cultural legal system can be established in China. However, the great efforts made to perfect this system and the accelerated political democratization and democratic political process have enabled the development of our cultural legal system. Since China joined the WTO, it has been vigorously promoting a legal system for the national cultural market, creating unprecedentedly favorable conditions for such a system. Strengthening legislation and gradually elevating the Party’s cultural policies into state laws through legal procedures will help push forward China’s cultural development. Therefore, with the further opening of the cultural market and the formulation of various cultural

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industry laws, our cultural democracy will enter a new historical period of law-based management. In this process, the New Culture Movement 2.0 will find new mechanisms of growth while rising up to more severe challenges. The opening of Chinese culture to the outside world is neither without principles nor without a security system. It remains within the legal framework and in accordance with China’s commitments under its Protocol of Accession to the WTO. Establishing a national cultural security system under the market economy is a necessary step in developing the cultural industry and advancing cultural democratization. Therefore, the establishment of a scientific and standardized national management and early-warning system for cultural security will provide a crucial guarantee for the development of the cultural industry, the construction of cultural democracy, and the smooth progress of the New Culture Movement 2.0. III Since the beginning of the twentieth century, there have been two profound new cultural transformations in China. One is the May Fourth New Culture Movement, which called for a new sense of patriotism and was driven by the pursuit of democracy and science; the other is the New Culture Movement 2.0 initiated at the end of the twentieth century and still in progress today, motivated by the development of the cultural industry, focusing on cultural system innovation and aimed at building a harmonious society. These two new cultural transformations share one thing in common—both started as China faced the challenge of globalization and began to integrate itself into the modern world system—but are also vastly different. The first movement reshaped China’s revolution and redirected it onto a different course, the immediate result of which was the birth of the CPC, which responded in its own way to the challenges brought by economic globalization. The second one targets the social development of the country, directly leading to the policy of reform and opening-up and the strategy of peaceful rise in response to outside challenges. The former is characterized by national emancipation of the mind and the latter innovation of the national system. However, compared with any previous cultural movements in Chinese history, one of the most distinctive features of the current transformation is its transition from ideological emancipation to cultural liberation. There is no clear

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slogan for change or a specific form of organization, whether top-down or bottom-up. Instead of pushing for change by means of movement, it slowly gathers momentum as China deepens its reform and opening-up and sets the goal of restructuring the socialist market economy. What these two new cultural transformations have in common is that they were both initiated when China was facing the challenge of globalization and integrating into the modern world system. The first new culture transformation originated from the First Opium War (1840), took shape during the May Fourth Movement (1919), and finally concluded with the end of World War II (1945). It was the first major collision between China’s traditional feudal culture and modern capitalist culture. China was subject to the challenge of globalization in a humiliating way and thus began its integration into the modern world system. It provided new ideas and cultural forms that helped China embark on the road to rejuvenation and find the necessary course to take to catch up from behind. It is in this sense that the May Fourth Movement became a defining event that divides Chinese history into different periods. It was with the founding of the CPC that China’s political party system acquired its modern significance. The first new culture transformation emerged out of the need for social change with great spontaneity. What it sought was the transformation of the cultural form itself. The immediate trigger was a fervent wave of patriotism among new Chinese intellectuals inspired by the violation of China’s sovereignty by the Paris Peace Conference. In other words, the first new cultural transformation did not take place with the government as the primary driving force; rather, it was facilitated by a new generation of intellectuals that had been in the making since the First Opium War within Chinese society, who were eager for reform and new policies. With such new intellectuals as a leading force, it primarily pursued the change of the content and form of culture. At that time, the modern cultural industry in China was still in its infancy and had yet to be recognized as a revolutionary force. In the arena of new culture transformation, it mainly played a supporting role. The outbreak and conclusion of the Second World War brought profound historic changes to the first new culture transformation in China. After the global “left-wing cultural movement” in the 1930s, the cultural achievements made during the May Fourth Movement initiated the New Democratic Revolution. The second new culture transformation, marked by the end of the Cultural Revolution and the beginning of China’s reform and opening up,

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occurred as the country actively sought national development and rejuvenation after twenty years of alienation from the world system. During its first stage, China was obviously catching up with the status quo, since its understanding of the world lagged behind its reality. It is characterized by radical rethinking and total Westernization, which is similar to the May Fourth Movement. China’s integration into the modern world system began in the 1990s, when the Soviet Union and the camp of socialist states in Eastern Europe collapsed and China rejoined the General Agreement on Tariffs and Trade (GATT). After the throes of social change erupted in 1989, efforts were made to incorporate the country into the system of the modern world. Mass culture came on the scene and began dominating the market. The study of China’s accession to the WTO sparked a discussion of the challenge of globalization that initiated the New Culture Movement 2.0. It’s fundamentally different from the first new culture change in that the cultural industry was discovered and began to function as a revolutionary force because it shouldered great ideological responsibilities. Cultural restructuring began to take center stage as the New Culture Movement 2.0 moved to a deeper level. China will not be able to develop its socialist culture and meet the strategic needs of the country without cultural restructuring, which stands out as the core issue to be dealt with in the New Culture Movement 2.0. High on the priority list is the liberation of cultural productive forces. All this is happening in the context of globalization and China’s integration into the modern world system. Internal demand and external pressure are combined to ignite this comprehensive and far-reaching cultural change. If the May Fourth Movement remains a revolution of ideology and culture, the New Culture Movement 2.0 is more a clash of old and new cultures at the system level. It is a self-targeted revolution initiated by the governing party of the country. Deregulation and market access are its primary focus. The forms of cultural productive forces and the relations of cultural production will undergo revolutionary changes in this process. This New Culture Movement 2.0 is mainly aimed at promoting new economic, political, and social changes. Specifically, it will provide the space for industrial transfer to facilitate new economic changes, the structure of civilization for new political changes, spiritual harmony, and a sense of identity that drive new social changes. Meanwhile, new ideas, concepts, theories, frameworks, forms, paths, systems, patterns, creations, and breakthroughs will be made for the transformation of culture itself. It is in this process that the cultural industry has become a strategic fulcrum for leveraging historic changes.

CHAPTER 2

Introduction: What Kind of a Country Are We Bringing into the Twenty-First Century by Developing the Cultural Industry?

“Whether or not we can promote cultural and ideological progress will have a bearing on the success of China’s socialist cause and what kind of a country we are bringing into the twenty-first century,” the Central Committee of the CPC solemnly declared in its “Recommendations on the Formulation of the Ninth Five-Year Plan for National Economic and Social Development and the Long-Term Goals for 2010” in September 1995. “What kind of a country are we bringing into the twenty-first century?” This is an important strategic question in the course of modernizing Chinese culture, put forward by the top decision-makers of a major country from the perspectives of the rise and fall of the nation, the success or failure of the cause, and global development. It is a recurring motif throughout the development of the country at the turn of the century. It is under this motif that China chooses to develop the cultural industry in response to the question of the century.

1 China’s Cultural Development Strategies at the Turn of the Century In September 1997, the report of the Fifteenth National Congress of the CPC clearly pointed out that “socialist culture with Chinese characteristics is an important force for rallying and inspiring the people of all ethnic groups in China and an important symbol of overall national strength”

© Social Sciences Academic Press 2022 H. Hu, The Development of the Cultural Industry in China, China Connections, https://doi.org/10.1007/978-981-19-3355-4_2

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and that “the whole Party must fully appreciate the importance and urgency of cultural construction from the perspectives of socialist prosperity and national rejuvenation.” The report not only devotes a special chapter at some length to the issue of cultural construction, which is rarely seen in the history of the national congress of the CPC but also incorporates the issue of cultural construction into the Party’s basic program for the next hundred years. This is of great realistic and historical significance to the construction and rejuvenation of Chinese culture. Therefore, it is an important guiding principle for our cultural development strategies at the turn of the century and the rejuvenation of Chinese culture. I “The mutual reaction and influence of various ideological and cultural forces in the international sphere have put the development of socialist culture and ideology to a severe test.” This is the most important reality confronted by today’s China in its cultural construction. In the summer of 1993, Professor Samuel P. Huntington of Harvard University proposed the idea of the “clash of civilizations” when analyzing the shift of the global landscape in the post-Cold War world. Huntington believed that the primary source of conflict in this new world would not be “ideological” or “economic” but rather “cultural” and that in the coming century, civilization will be the source of all conflicts in human society. He even asserted that “[t]he next world war, if there is one, will be a war between civilizations.” Who will be the winner in this ideological and economic “war” between the East and the West? For Huntington, the answer is self-evident with the collapse of the camp of socialist states in Eastern Europe. However, the disintegration of an ideology and economic form does not mean the end or even the death of a culture. How did the Chinese nation reach a historic turning point after the Cultural Revolution? Why is it that after the collapse of the Soviet Union, there has been a boom in reform and development in China? Huntington saw that five thousand years of Chinese civilization was in itself a great cultural force. In the article titled “The Clash of Civilizations?”, he summarized that the future of world culture will be “shaped in large measure by the interactions between seven or eight major civilizations. These include Western, Confucian, Japanese, Islamic, Hindu, Slavic-Orthodox, Latin American, and possibly African civilizations.” In addition, Huntington put it bluntly

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and regarded the “Confucian civilization” as a major force causing the future clash of civilizations and explicitly advised that Western society join forces with other civilizations to curb it. This is a challenge to Chinese civilization and culture. The clash of civilizations has become a new theory of international cultural strategy guiding the West, especially the U.S., in formulating international strategic decisions after the Cold War. Huntington’s theory provides not only a theoretical basis for the U.S. and the entire Western world to redefine their cultural relations with China but also provide guidance for China in making a fresh choice of development strategy. Civilization and culture have become the biggest strategic issues concerning the interests of a nation. It is against such an international background that the formulation of Chinese cultural strategies at the turn of the century was rapidly pushed into a new landscape of international cultural relations where various forces interact with each other. China’s cultural modernization is a strategic choice made according to its national conditions and the need for developing socialist culture and ideology. That said, this modernization process will be infiltrated and influenced by various Western cultures, constituting an inevitable and grave challenge to its choice of cultural development in the twenty-first century. Therefore, the formulation of Chinese cultural strategies at the turn of the century not only concerns the adjustment of international cultural forces, the reconstruction of international cultural relations, and the establishment of a new international cultural order but also has a direct bearing on the status of Chinese culture and the image of the Chinese nation in the world in the twentyfirst century. All of this boils down to one big question: “What kind of a country are we bringing into the twenty-first century?”. II When building a socialist system of cultural values with Chinese characteristics, the focus is on transforming cultural values and revolutionizing ways of thinking, which is also the basis of systematic cultural strategies. Since the second half of the 1980s, drastic changes have taken place in the world. The conclusion of the Cold War marked the end of an era characterized by polarized confrontation. Peace and development have become the theme of today’s world, which is moving toward multipolarity. The signing of such global documents as the Rio Declaration and Agenda

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21, as well as the convening of the Asia–Pacific Economic Cooperation (APEC) and the first Asia-Europe Meeting (ASEM), clearly indicated that the world, through complementarity, is moving away from opposition to dialogue and from confrontation to cooperation; scientism in the West no longer stands in opposition to humanism in the East but rather integrates with and completes the latter, creating new values that transcend geographical boundaries. With these new themes of the times in mind, the Fifteenth National Congress of the CPC (1997) made a trans-century strategic plan with great foresight, putting forward the lofty goal of building a socialist culture with Chinese characteristics and establishing Deng Xiaoping Theory as the fundamental guiding principle for China’s socialist cultural construction. Our mission now, while adhering to this principle, is to build a socialist system of cultural values, cultural forms, and a cultural growth mechanism that coordinate with the socialist market economy and political system with Chinese characteristics. Ultimately, we are striving to create a new Chinese culture that combines national cultural character with the world spirit. The advent of the era of the knowledge-driven economy has changed the form and content of human knowledge and how it is disseminated and received. The digital revolution, for example, has transformed the symbols we use to record and spread knowledge. With the establishment of databases, human knowledge faces the selection and reconstruction of space. Moreover, the popularization of the global Internet has rendered any cultural isolation and interception impossible. Meanwhile, the interdependence of markets and plans has created an unprecedented cultural space for the symbiosis and integration of various cultures around the world. With a keen insight into this global trend, Deng Xiaoping proposed a groundbreaking theory in the history of Marxism, namely, the compatibility between markets and plans. From the perspective of economic and social development, new content has thus been added to the thinking revolution and value orientation of China’s cultural development. This new value was then embodied in the strategy of international cultural relations, as Jiang Zemin first proposed in November 1991 that state-to-state relations should be governed by national interests rather

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than ideology.1 Overcoming differences in ideology and values to develop new international relations and establish a new state order has become a new guideline for contemporary China in handling international relations. The ideals of various countries may differ, but our cultures can harmoniously accommodate each other. We shall “draw on the strengths of different cultures” to “create a new and more colorful socialist culture with Chinese characteristics” that “originates from five thousand years of Chinese civilization and is rooted in the practice of socialism with Chinese characteristics.” Such a cultural value characterized by integration and rationality should guide our choice of strategy for cultural development at the turn of the century. Only under the guidance of such a new value that is inclusive, integrative, and open-minded can we make cultural contributions by carrying forward the tradition of our predecessors and breaking stereotypes, and obtaining comparative cultural advantages before the new century arrives. III The long-standing cultural climate of polarized confrontation has been replaced by integration and rationality, which were put forward and established as new values guiding China’s cultural development in the twenty-first century. According to such values, China should adopt cultural strategies that help transform a unitary culture dominated by the state into a new cultural community where diverse cultures that share the same root coexist, interdepend, and interact. The goal of restructuring the socialist market economy, Deng Xiaoping’s creative concept of “one country, two systems,” and the strategy of building a new socialist culture with Chinese characteristics put forward by Jiang Zemin in the report of the Fifteenth National Congress of the CPC are all solid steps toward this new cultural community. A country or nation cannot thrive without a cultural mainstream. Mainstream culture embodies and guides the cultural spirit and fundamental cultural direction of a country or nation and defines the nature of its culture. China has built an economic system dominated by public ownership and supported by various forms of ownership and practices the 1 As reported by the People’s Daily on November 2, 1991: “Jiang Zemin gave an interview to the former editor in chief of the Washington Times on international and domestic affairs.”.

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regional autonomy of ethnic minorities and two different social systems. As a result, multiple cultural needs, demands, and elements still coexist in this country. Under such basic national conditions, it is unrealistic to expect the cultures of Hong Kong, Macao, and even a post-reunification Taiwan to unite under the banner of socialist culture. When thinking about China’s cultural development strategy in the twenty-first century, we should not focus solely on the socialist culture of the Chinese mainland but a unified Chinese culture, including Hong Kong, Macao, and Taiwan, if the Chinese nation and culture are to be rejuvenated. In the current framework of “one country, two systems,” it is not enough for China to have one culture that embodies the will of the state and the spirit of socialism. There should also be such patriotic cultural elements as national solidarity, economic development, social progress, and people’s freedom that are essential to a unified Chinese culture—even though they may not reflect the socialist spirit—as well as mindsets, customs, lifestyles, and attitudes that vividly manifest these cultural elements and doctrines and theories that summarize them. All of these can be regarded as supplementary to mainstream Chinese culture and contribute to a reasonable cultural structure. China is a country of many ethnic groups, including Han, Mongol, Zang, Uygur, and Man. Thanks to the diversified structure of a unified Chinese culture, it has remained solid as a rock through thousands of years of development despite the turmoil of war. The nation has been through states such as Qin, Jin, Chu, Lu, and Yue, bred schools of philosophy such as Confucians and Mohists and witnessed the birth of religions such as Buddhism and Taoism. Multiple ethnic groups and cultures have come together, and various religious sects and academic schools each play a role. These distinctive cultures, which seek harmony in diversity by inclusively complementing and flexibly accommodating each other, have converged into this unique spirit of integration and rationality of Chinese culture under the influence of tensions between history and reality. In the report of the Fifteenth National Congress of the CPC, Jiang Zemin distinguished “all ideological and moral principles conducive to national unity, economic development, and social progress” from “communist ideological and moral principles” and encouraged their development by incorporating them as important elements into “common ideals and aspirations,” while “advocating communist ideological and moral principles,” Jiang “combined the requirements of progressive and extensive efforts.” This not only reflects the broad and lofty vision of the third generation of

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leaders of the CPC in cultural construction and a historical legacy of integration and rationality in Chinese culture but also reveals the dialectical relationship between mainstream culture and its various branches. Guided by the spirit of integration and rationality, we should strive for the accessibility of mainstream culture and its various branches and the complementarity and interaction between them. All cultural factors that are beneficial or harmless to the growth of the Chinese nation and its new culture, as well as patriotism, democracy, humanitarianism, and other scientific and progressive ideologies and moral principles, should also be included in the formation of Chinese culture in the twenty-first century. Thus, a new order of the unified Chinese culture can be established as our culture returns from ideological confrontation to cultural integration. IV The increase in cultural resource reserves is a sign of true independence in cultural development. Culture is alive only when it is capable of evolving. Only when the fruits of its growth shape a nation’s cultural character and inner world and exert great influence on the historical course of human society can it be powerful and significant as a resource and heritage. Since the beginning of the twentieth century, cultural development in China has been subordinated to utilitarian political and economic needs. The growth of culture has always been dependent on political and economic development. Such inversion of the means and the end leads to a serious shortage of resources needed for cultural development in contemporary China. It is therefore an important guiding thought that we should not seek temporary economic development at the cost of cultural and ideological progress. In the remaining time of the twenty-first century, Chinese culture should draw on more than one hundred years of achievements and lessons, base its development on its own cultural resources in a more rational way, and take the endogenous development of culture as its fundamental way to grow. We should coordinate the development of culture with socialist political and economic progress and truly give full play to socialist culture in “providing strong spiritual motivation and intellectual support for economic development and overall social progress,” as suggested by Jiang Zemin at the Fifteenth National Congress of the CPC. A basic idea behind the cultural development and

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growth of China in the twenty-first century should be to combine the accumulation of cultural resources and the increase in social capital. As indicated by human history, all cultural heritage that is beneficial to mankind—thoughts and theories as cultural resources—are formed at a turning point in history when seeking solutions to challenges of the time. In turn, it is these thoughts and theories that push the social and historical development of a country that make culture a powerful force. Today’s China is confronted with a series of pressing issues for which culture urgently needs to provide truthful answers and guidance. This brings not only challenges but also infinite hope for developing Chinese culture and overcoming the shortage of cultural resources. Chinese culture in the twenty-first century will face up to every major issue concerning the prospect of the nation and take it as an opportunity to drive its own independent development. What lies ahead is an unprecedented historic opportunity. We should combine China’s cultural development in the twenty-first century with solutions to urgent issues in the country, enable cultural progress as society advances as a whole, guide and promote social advancement with cultural progress, and establish a sound growth mechanism of cultural development. Only in this way can cultural construction at the turn of the century fulfill its role in the process of China’s modernization and provide new and rich cultural resources and intellectual support for the spiritual and physical creation of the country, ultimately achieving the rejuvenation of Chinese culture. V In the cultural development and competition of the world today, the cultural industry is of immense strategic value. It is characterized by the ability to construct and deconstruct cultural systems, giving rise to all systems of cultural censorship, cultural access, and cultural trade barriers in the international community. For instance, printing, whose widespread use in Europe gave birth to modern publishing and journalism, became a vital tool in the bourgeois Protestant Reformation and led to the inspection and censorship of books and newspapers; the film trade war of the century between France and the United States resulted in a quota system for film trade, and the market access system of the film industry and the international barrier to film trade were born at the same time; the rapid

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development of modern communication technologies and the birth of the broadcasting industry directly affected the system revolution concerning whether to loosen or tighten regulation on the audiovisual industry in Europe. Most recently, Internet technology has led to the emergence of the virtual culture industry, followed by widespread Internet pornography that poses a threat to public security and the mental health of minors, forcing many countries to formulate and introduce a rating system for the use of the Internet. In conclusion, it is safe to say that all cultural systems in human society in the twentieth century resulted from the deconstruction of the original cultural system by the cultural industry. Without the cultural industry and its modern development, today’s human society would probably be trapped in the Middle Ages. Whether it is in China or some developed countries, there are at least two key reasons why the cultural industry is taken seriously, supported by government policies, and even considered an important part of national development strategy. First, as a new way to create wealth, the cultural industry has altered the original path to economic and social development that relies on resource depletion and environmental pollution; as a new productive force, it has changed the original structure of social productive forces, transforming the knowledge-driven economy into a low-carbon cultural economy in modern countries. Second, the cultural industry creates wealth in the process of spiritual consumption, altering not only the way in which wealth is created but also people’s spiritual production and consumption—including spiritual expression and communication— and the spatial structure of people’s inner world in modern society. As a result, it possesses profound and intangible power that is missing in any material creation to deconstruct and construct the space of the modern mind. Such power has transformed the original structure of cultural and spiritual space between countries and shaped the future development of people, countries, and societies as well as the establishment of order. The cultural industry is an industry with both economic and cultural attributes and empowered with spiritual and material strength, making it an important choice for modern countries in readjusting national industries and restructuring their industrial landscape at the turn of the century. As the cultural industry is able to affect existing cultural development and economic growth, its mature modern development, its position, its role, and its impact on a country’s national economic and social development will directly constitute the key elements of a country’s overall strength and soft power. The modern development of the cultural

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industry, therefore, will be strategically significant and valuable. Developing, controlling, and monopolizing such a strategic resource has thus become an important part of international strategic competition.

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National Cultural Governance: Policies for Developing the Cultural Industry

Why should we develop cultural industries? What kind of value should guide the development of cultural industries in China? These questions involve the strategic relationship between the purpose of cultural industry development and the needs of the country and provide an important theoretical basis and starting point for the development strategy of China’s cultural industry. Political governance, economic governance, and cultural governance are the three stages of national governance. After the stages of political governance (with class struggle as the guiding principle) and economic governance (focusing on the central task of economic construction), China is now moving toward cultural governance (that attempts to “build a strong socialist culture”). It is when China enters the third stage of national governance that the cultural industry is entrusted with the function of national cultural governance and thereby becomes an important part of the national development strategy. I The goal to develop the cultural industry was proposed at a time of radical reform for China’s social development. Meanwhile, the country was striving to overcome structural tensions and institutional obstacles encountered in the process of strategically adjusting and transforming the economic structure. It was put forward as China joined the WTO to boost reform through opening-up and as the socialist cause was confronted by the collapse of the Soviet Union and the camp of socialist states in Eastern Europe. In other words, the national strategic decision to develop the cultural industry was made to meet a series of national strategic needs and address national crises. In this sense, the development of the cultural industry is of great significance in managing national crises. There has been a process of policy changes in China since the 1980s. As a country that had never before mentioned the cultural industry, China began to recognize the importance of this industry and devote

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major efforts to developing it and accelerating its progress. This is more than a general evolution of national policy and the country’s attitude toward and understanding of the cultural industry; it is also a profound transformation of the country’s view on governance and cultural governance. The integration of global markets caused by economic globalization has altered the landscape of global production and the circulation of not only physical commodities but also cultural commodities. Modern science and technology, in particular, are ever more deeply involved in the revolution and modernization of the means of cultural production and communication, making it increasingly impossible for the original closed production, circulation, and consumption of cultural commodities to continue. The transformation of the means of cultural production and communication has become an inevitable approach, without which national ideological security cannot be effectively safeguarded. It is for this reason that cultural globalization and a global revolution in cultural governance are taking place with the cultural industry evolving into an international cultural strategy and a national strategy of cultural security. While creating enormous wealth for human society, fast-moving economic globalization has also led to a global economic crisis by contributing to resource depletion and continuous environmental deterioration. Proposing the strategy of sustainable development, therefore, has universal value and highlights the concern of all of human society. Changing how the economy develops and grows naturally becomes another important task in economic globalization. One of the common goals of human society is now to seek new ways for our civilization to evolve and develop a new lifestyle. As considered by many, the best way to pursue this goal is through the development of the cultural industry. It is in this sense that the cultural industry becomes the most important form of new ideological security, which, in a broader sense, is maintained through national cultural governance. II Culture is characterized by its function of social governance. Governing in a cultural sense is to realize the inclusive development of culture by actively seeking a paradigm of creative cultural proliferation. This is the most striking difference between cultural governance and

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cultural administration. Cultural administration refers to the standardization of cultural behavior of people, society, and the nation through the establishment of a series of rules and regulations by the state. What is being administered here is cultural behavior and its entire ecosystem, and the government is the administrator. Cultural governance, on the other hand, is the instrumentalization of culture in which the state adopts a series of policies, measures, and institutional arrangements to resolve problems in the country’s development by utilizing culture. It is a process of shared governance led by the government and supported by nongovernmental sectors, targeting politics, economy, society, and culture itself. The act of managing is legally and administratively binding while governing highlights the initiative and autonomy of the people, society, and the state. Governance, which aims at tackling problems, is highly flexible in terms of discipline, whereas administration is the regulation of people’s social behavior based on a certain measure of value with a strict disciplinary mechanism. A person’s spiritual development and spiritual production are mutually fulfilling. On the one hand, we need to express our perceptions, feelings, and understanding about the world; on the other hand, we need tools to perceive, feel, and understand the world. In Marx’s words, people produce themselves as well as object. Any spiritual production will not simply repeat itself. Every such production, be it consciously or unconsciously, contains people’s understanding and ideals of life and creates a new world. Whether the result of this production is a symbol or an image, a system of sounds or actions, this new world presents itself as a work that tends to itself and affects others. Even the natural environment that people inhabit, because of its relation to our life and production, has become the objectification of people’s essential power, the work of people, and the object of space consumption. To a large extent, many spiritual phenomena of people and the construction of a spiritual order come from such spatial construction. The cultural industry is nothing but the result and manifestation of all this spiritual development and production. The fact that spiritual development and spiritual production are mutually fulfilling does not alter with the carrier or tool used; the only change lies in their instrumental rationality. The two are both highly flexible. However, instrumental rationality possesses essential power only when it gains profound value rationality and is deeply integrated with such value rationality.

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According to The Analects of Confucius, the Chinese philosopher heard Shao music and for three months was unable to discern the taste of meat. This is a poignant physiological and experiential depiction of how cultural products influence people. It points out not only the social value of cultural products but also the relationship between the state and cultural products and their production of them and that the state should govern the country through cultural products acting on people’s bodies and souls. The reason people want to control the production of cultural products is based on their deep understanding of cultural governance. Without a deep understanding of the role culture plays in social governance, it is impossible to achieve effective national governance, let alone good governance. In this sense, Confucius was the first to discover the relationship between the production of cultural products and national cultural governance. Confucius’s concept of governing the world with benevolence is arguably the earliest observation of national cultural governance. Observing and studying the rise and fall of a country through the rise and fall of culture has thus become the most important method of national governance in ancient China. III The cultural industry can be a means of governance. To govern through the cultural industry is the extension and development of cultural governance. It regards the industry as a machine that produces sociocultural products and intellectual works and is determined by the function of such a machine in political, economic, social, and cultural development. By developing different forms of cultural industries, it builds a pattern of spiritual and cultural production that meets the spiritual and cultural consumption demands of different people; through the construction of such a pattern, the needs of different social classes to invest in cultural production and communication are then satisfied, thereby granting people universal cultural rights and power. With the formation of this power structure, a spiritual and political order satisfying different cultural demands is established. The cultural industry is able to govern the economy, which is determined not by its economic attributes but by its cultural attributes. Economic governance by the cultural industry ultimately depends on the power of society to purchase cultural products. I need, therefore I buy.

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Without the purchasing power of society and the market, there would be nothing to motivate the production of cultural products; in the absence of such a motivation, or, if the production of cultural products is out of line with the demand of society, it would be impossible for the cultural industry to increase its economic value, let alone influence the adjustment of the rigid structure of economic development. Only with the ability to create wealth and enormous capacity to add value can the cultural industry attract capital and guide its flow and control the rigid investment demand of capital. In doing so, we will be able to readjust the economic structure and change how the economy grows and develops. The cultural industry, as a way of cultural governance, satisfies the diverse and ever-growing spiritual and cultural consumption demands of the people and rises above the unitary cultural development model guided solely by ideologies. We should actively facilitate the commercial and public-interest development of culture and, while safeguarding the basic cultural rights and interests of the people, develop the cultural industry by utilizing the market economy. This industry should be used as an important channel to meet the ever-increasing and various spiritual and cultural consumption demands of the people and should be closely integrated with cultural and ideological progress. Culture governs the nation by providing channels and products to meet people’s multiple needs for spiritual and cultural consumption. It establishes not only a new relationship between the government and the market in terms of cultural governance under the condition of a market economy but also an interactive relationship between the state and citizens in exercising their cultural rights and interests. This is yet another radical revolution in China’s national cultural governance. As a method of political governance, the cultural industry innovates models of spiritual and political production and spiritual and political orders that are incompatible with the development of political civilization while adapting to the democratization of political civilization and the creation of a diversified development mechanism for expressing demands. It is the principal expression mechanism of political civilization. Its market access is not an economic issue as much as a political one that concerns the development of political civilization in a state and society. Under different social and historical conditions, various mechanisms of political expression will emerge in different countries with diverse political and cultural traditions; due to different political beliefs of the governing bodies, even the same country with the same tradition will produce different political expression mechanisms. It’s precisely because of this that the market

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access of the cultural industry opens a window to the political civilization of different countries. The cultural industry that governs society serves to reflect the subject consciousness of public administration and develop a sense of public responsibility while removing social management models and civilizational forms that are out of keeping with the progress of social civilization. Societies are characterized by anarchism and shaped by different cultures. As the most important machine of social production, the cultural industry not only produces and provides all kinds of cultural products but also generates various cultural demands. While catering to people’s cultural consumption habits, it creates new social demands and alters our old consumption habits. As a method of national governance, the cultural industry serves the country’s fundamental strategic interests and balances and coordinates the civilized interaction between people, society, and the state in political, economic, social, cultural, and ecological sectors. Therefore, the vigorous development of the cultural industry is proposed as a national strategy and policy used to govern the country. As we strive to develop this industry, we shall make sure that it serves, above all, economic development, culture, society, and people’s livelihood. IV Cultural governance combines cultural values and cultural lifestyles in an organic way. In this sense, as a form and method of cultural governance, the development of the cultural industry and the system of content and values made up of its products should also naturally unite people’s expressions of social existence and social manners. It is impossible to foster the capability of cultural governance, especially of national cultural governance, if cultural values are separated from people’s lifestyle or if the pursuit of ideological values is divorced from the way people are expected to live. A country’s capability of cultural governance is first manifested by a high degree of attraction and recognition domestically, as a result of which the quality of one’s inner spiritual life and the satisfaction of external material needs form an organic whole, generating a sense of pride and satisfaction in the state and quality of one’s life. Without internal recognition, there would be no cohesion or solidarity; the value and role of culture in national governance is of course out of question.

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In a highly culture-industrialized society, the cultural industry, as a machine that produces social values, profoundly influences and enables the spiritual and material life of people. As a result, there is intrinsic interaction between the values used to guide the development of the cultural industry and the kind of cultural governance capability that is acquired. On the one hand, certain social values can affect the value orientation of cultural industry development; on the other hand, the cultural values generated thereby will in turn affect the change of social values. Any tensions between the two will lead to greater conflicts and confrontations. Therefore, the organic combination of the two defines the nature of the relationship between developing the cultural industry and forging the capability of national cultural governance. It is in this sense that cultural industry development becomes an important means of national cultural governance in building and enhancing the capability of a country to govern. Hence, the theory of national cultural governance focuses on the most essential proposition for the development strategy of the cultural industry: We strive to develop the cultural industry, not for the sake of economic development but to perfect national governance; it is, by means of the economy, specifically the market economy, to realize the value of culture in politics, economy, and society, thus reshaping the model of national governance. From this point of view, proposing the concept of national cultural governance has enabled the development of the cultural industry to return to its value rationality in terms of cultural standards, which are the governance of the people, society, and the state. From the criticism of the cultural industry to the development of this industry and finally to the integration of cultural industry development with national governance, the instrumental rationality and value rationality of cultural industry development will be organically combined. This is the current situation of national cultural governance in China.

3 Future Development, Market Construction, and System Innovation in the Chinese Cultural Industry In November 2002, a decision was made in the political report of the Sixteenth National Congress of the CPC to actively “develop cultural undertakings and industry,” which was without precedent since the CPC

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assumed the reins of government. This decision not only silenced the debate over whether to develop the cultural industry in China and legitimized the industry in the country but also ushered in a new era of cultural development in both political and cultural senses. The time has come for the cultural industry to take off in China. Thoughts will be liberated and culture transformed. 1. Analysis of the Future Development of the Chinese Cultural Industry The establishment of the legitimacy of the cultural industry in China has led to the demand for its rationalization. Such a demand, as a result of China’s accession to the WTO, has gained not only national significance but also an international basis. At the macro level, this demand for rationalization is roughly reflected in the following aspects: (1) It is generally required that cultural industry development be included in the overall planning for national economic and social development. This way, it will not only become a new economic growth point but also play an important role in the strategic adjustment of China’s economic structure and bear the transferred costs incurred by such adjustment. We should, in the integrated system of national economic and social development, broaden our understanding of the social function of culture and fully demonstrate the extensive role of culture in stimulating domestic demand, driving economic growth, and promoting all-around social development. (2) It is universally required that cultural restructuring be incorporated into the comprehensive and in-depth reform of the state. By doing so, cultural restructuring can benefit from the amplifying effect of the economic reform and bridge the policy gap between the two kinds of system reform. The need for advanced productive forces to develop will thus be vividly reflected in the forward direction of advanced culture, providing an industrial driving mechanism for the progress of China’s advanced culture. The relationship between culture and economic development will then return to one of proper interaction and mutual development. (3) It is a universal demand that an open, transparent, and nondiscriminatory mechanism of cultural market access be set up and

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an environment featuring fairness, impartiality, and free competition created for cultural industry development. While rectifying the order of the cultural market in accordance with the law, we should further expand access to the cultural market, while safeguarding national cultural security according to the law and exercising state control in limited fields of the cultural industry, we should enforce anti-monopoly measures in the industry. (4) It is a common call of the people to establish a sound national policy and legal system for the cultural industry, straighten our various policy relations in the cultural industry, and provide a comprehensive and systematic legal guarantee mechanism and policy support system for the rationalization of the industry. (5) One last generally accepted goal is to push forward the overall rationalization of the cultural industry as China becomes deeply integrated into the modern world system by re-examining the significance of the cultural industry in a new light, reestablishing the value system of the industry in the spirit of ethical principles and the law, and creating a national innovation system for the industry. Compared with its legalization, the rationalization of the Chinese cultural industry will be a much longer historical process of increasingly accelerated development. The sudden emergence of various uncertainties can lead to fluctuations in the process, but the general trend of rationalization remains unshaken. Following such a general historical trend, the development of China’s cultural industry in the next few years will take on the following characteristics. (1) The unbalanced development of the cultural industry across the country will become more pronounced with regional competition on the rise, and the overall planning and coordinated development of the cultural industry at the national and local levels will enter a new stage. (2) Competition in the media industry will evolve and expand into all areas of the cultural industry; tensions between industry barriers and market access will fully unfold, and the results of the in-depth reform of the economic system will be widely applied in the cultural field.

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(3) The digitization of the cultural industry, as well as the strategic structural adjustment of cultural industries driven by the information industry, will become a major trend in enhancing the overall competitive edge of the cultural industry. (4) A new dynamic structure will be formed in the future by seeking the greatest integration with other industries and building a new industrial structure. (5) After China acceded to the WTO, the opening of its cultural market to the outside world entered a new phase. Within the framework of WTO rules, the opening of China’s cultural industry and market, which used to be limited in scope and domain, will be at full blast across multiple areas. (6) Social capital and international capital will enter the core area of China’s cultural industry through multiple channels and in various forms. Multiple forms of capital, mainly financial capital, will participate in the competition of the cultural industry in China and become an important force affecting its future direction. (7) The influence of international political, economic, and cultural variables will become increasingly prominent, and the cultural strategic competition between countries around cultural market access will produce a profound impact on the future policies of China’s cultural industry. (8) The government and the market are basically compatible, and both market failure and government failure will be effectively overcome; a reasonable relationship between the government and the market will be established, adjusted, and standardized by using the law; the unification of legal relations will become a major trend in the reform of China’s cultural administrative system. (9) There will be increasingly intense competition for multidisciplinary and high-quality talent in the cultural industry. Candidates who are well versed in cultural capital operations, the development of digital art software, and the operation and management of the media industry will be highly sought after by various cultural industry groups and cultural investment groups. The rationalization of China’s cultural industry is called for in the overall strategy for its future development. To fully rationalize this industry, it is necessary to put in place a complete policy innovation system. Therefore, the country will face the central task of formulating

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favorable national policies and establishing a system of cultural administration and cultural industry policies in line with China’s cultural conditions and cultural development needs. 2. Market economy: the guiding light for China’s cultural industry development (1) The cultural industry is first and foremost a manifestation of culture and then one of the existing forms of the modern economy. Such dual identities determine that the cultural industry will, in its own special way, participate in adjusting the economic structure and building a national cultural innovation system in a post-WTO accession China. A key matter here is to organically integrate the direction of advanced culture and the market mechanism. Therefore, looking at the historical significance of this cultural form, the cultural industry of today embodies the current direction of advanced culture. Without modern industrial civilization and information civilization, it would not be grounded in the reality of advanced productive forces, let alone represent the fundamental interests of the people. As is known to all, the cultural industry is almost synonymous with mass culture. If we look beyond the context of Western theories and observe it from the historical perspective of China’s New Culture Movement, the mass culture that we aspire to is essentially cultural democracy and cultural equality that China’s new culture has been pursuing since the May Fourth Movement. The concept of mass culture should remain an integral part of the construction of socialist culture with Chinese characteristics that are distinctive to the nation, pro-science, and people-oriented. In this sense, the cultural industry plays an irreplaceable role in China’s current social development and strategic adjustment of the economic structure. (2) The market economy is a product of an industrial civilization that emerged at the same time to meet the needs of the latter. In other words, it is the direct embodiment of commodity circulation in industrial civilization. Just as industrial civilization transcends agricultural civilization, the market economy surpasses the natural economy as a more advanced form of economy. Its emergence has led not only to a great revolutionary leap in social productivity but also to the globalization of production and consumption for all countries by opening-up the world market (Marx, 1848).

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The market economy is essentially a result of the development of human civilization and self-selection. It is a form of civilization. The relationship between advanced culture and the market economy, between the cultural industry and the market mechanism, is one of mutual development. This relationship provides an objective basis for the cultural industry to follow the direction of the advanced culture through the market economy. Thanks to the market-oriented operation of the publishing industry represented by the Commercial Press and Kaiming Press, the progressive achievements of the Vernacular Movement have rapidly transformed into a driving force of social change in modern China. China’s modern publishing industry has since played a significant part in pushing forward the advanced culture and acted as an important medium by which the outstanding fruits of world civilizations spread in China. The formation of WTO principles is part of world history. The principles established by the WTO essentially elevate certain rules that should be followed in a market economy into a universal concept of communication behavior and code of business ethics, into a measure of modernity and civility achieved in their communication behavior, a notion and system of values, and a new world of meaning. Therefore, what WTO rules embody is the consistency between the advancement of human civilization and the objective law followed in the development of the market economy, which makes them universally applicable. There is always something cultural about the spirit of rules. Since the principles embodied in them are based on an understanding of the objective law of development of the market economy and it is a basic cultural attitude and strategic choice of contemporary China to develop itself according to such a law, WTO rules are fundamentally consistent with the long-term strategic goals and fundamental interests pursued by the Chinese people. (3) China’s advanced culture cannot be viewed and understood in isolation from the overall advancement of human civilization, nor can we separate its direction from the way human culture is heading. Only by placing the direction of China’s advanced culture in the context of the overall direction of world culture and human civilization can Chinese culture, with all its diversity, obtain the value and support that it deserves while striving to stay on track and innovate. Instead of becoming the other culture that stands aloof from the totality of human civilization, the advanced culture of China is bound to and should follow a direction similar to that of the world.

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Culture, as an important component of the comprehensive strength of a country, is certainly included in China’s efforts to open wider to the outside world and increase its overall national prowess. It is in this sense that the WTO rules pertaining to cultural industries and their mechanism agree with the long-term goal of China’s cultural development. Therefore, after joining the WTO, China has adjusted, modified, and abolished its original laws and policies concerning the cultural industry according to WTO rules and reconstructed the development model and market system of the industry; it has established an open, transparent, and nondiscriminatory access mechanism for cultural markets and created an environment for the cultural industry that is fair, impartial, and encourages free competition. In accordance with the principles of the market economy, China has also set up a modern enterprise system for the cultural industry and practiced corporate governance. This is a historic choice of selfperfection and a natural logical process for contemporary China, as it tries to organically integrate the direction of an advanced culture that should be reflected in its cultural industry with the market mechanism based on the requirement for developing advanced productive forces. This maintains and increases the value of the cultural assets of the state and the people while enabling mainstream culture to retain its dominant position in the cultural market, rather than sticking only to the right cultural direction and losing sight of the rules and regulations of market economy that must be abided by. Without a market mechanism that complies with the principle of the market economy, China’s accession to the WTO would be devoid of any economic or cultural value and significance. 3. Building a national system of cultural industries that highlights innovation As an area that attracts global innovation, the cultural industry is widely recognized as a new economic and cultural growth point in the twentyfirst century. It is turning into a strategic high ground that all countries in the world are battling for and beginning to exert an unprecedented strategic impact on the global landscape. The establishment of a new international cultural order and the restructuring of global cultural power are both taking place along the “central axis,” that is, the cultural industry. Naturally, it became one of the important points of repeated contests

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in the negotiation between China and the United States over China’s accession to the WTO. Faced with the challenge of globalization and the historical necessity to move fast and develop the cultural industry, it has become an important strategic choice for China to build a national system of cultural industries with distinctive Chinese characteristics that highlights innovation to resolve various tensions and problems in developing its cultural industry. (1) Systematic innovation of cultural industry policies. The construction of a national innovation system for cultural industries is above all a matter of policy. For a long time, China’s cultural policies have been focusing on cultural undertakings, forming a relatively organized system that emphasizes the ideological function of culture. This is consistent with the operation of China’s national system of cultural rights. Therefore, a corresponding relationship has taken shape between cultural industries and cultural undertakings, whether in terms of the theories, systems, or forms of cultural policies. The emergence of such a relationship, which fits with the goal of restructuring the socialist market economy, is in fact a breakthrough in China’s cultural policy system. In the current development of China’s cultural industry, therefore, there are quite a few important issues that call for immediate solutions: The research on the innovation system of cultural industry policies should be enhanced and a scientific decision-making mechanism put in place as soon as possible; the various relations in terms of cultural power and cultural policies should be straightened out and cultural industry policies formulated based on the conditions of China’s cultural development; cultural policies should be innovated, and the policy environment necessary for developing the cultural industry should be improved and optimized to build a national innovation system for this industry. (2) Innovation of the national system of cultural industries. The development of cultural industries concerns not only policies but also economic relationships. It embodies the relationship and structure of cultural and economic interests. The current landscape of the cultural industry in China is actually the product of cultural administration in the planned economy, which reflects the centralized and unified leadership of the state as the sole investor of the industry. As a consequence, although

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the traditional planned economic system has been broken, a new system has yet to be built. It is therefore necessary to strategically reorganize the existing structure and investment system of China’s cultural industry to create a national innovation system for it. We should focus on cultural enterprises, breakdown the outdated system characterized by barriers between departments and regions and industry barriers that hinder the innovation and development of China’s cultural industry, and carry out an in-depth reform of the existing investment and financing system for the industry. While implementing a market access system with foreign countries, we should remove barriers to the industry by facilitating market access for various forms of ownership at home and draw on international experience to establish cross-industry cultural groups and transnational cultural corporations with various forms of ownership tied together by property relations in accordance with the modern enterprise system. We should welcome various participants into the innovation of the cultural industry by encouraging all social sectors to run the industry—especially its core areas—and try to diversify, privatize, and democratize its sources of investment. Responsibilities and services that were assumed only by the state should now be transferred to the private sector. With cultural strength from the public, we will work together to build a national innovation system for the cultural industry. The policies concerning the position and role of the nonpublic sector in the present economic system set forth at the Fifteenth National Congress of the CPC and the Fourth Plenary Session of the Fifteenth Central Committee of the CPC should serve as guiding principles for us to overcome tensions in cultural industry development and create a national innovation system for this industry. (3) Theoretical innovation in the cultural industry. The innovation of the cultural industry inevitably raises doubts about and challenges to the original system of knowledge and capabilities in cultural development. Our thinking must be renewed, and such renewal, through its scientific, comprehensive, and vivid embodiment in the new theoretical system, will provide support for the innovation of the cultural industry. China’s cultural industry has been gradually evolving with the deepening of economic and cultural restructuring, which makes it distinctly primitive both in practice and on the theoretical level.

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Antiquated industrial concepts, insufficient theoretical study, and the lack of innovation have seriously restricted the construction of an innovation system and the expansion of the innovative capacity of China’s cultural industry. Facing the challenge of globalization, our cultural industry development is more in need than ever of the guidance of theoretical thinking. However, it is precisely on this issue that Chinese ideological and theoretical circles have yet to achieve a level of theoretical thinking that a vibrant culture should possess. The indiscriminate application of Western theories to the cultural industry and mass culture has weakened the ability of China’s cultural industry to innovate its theories, leading to its dependence on outside sources and the absence of a value standard. Worse still, it has resulted in the loss of Chinese values and our original motivation. The innovation of our national policies for the cultural industry cannot do without theoretical support and innovation in line with China’s reality. Faced with the challenge of globalization, Chinese theories on the cultural industry should serve as a major intellectual force supporting the country in dealing with and preventing crises and providing strategic resources for long-term industrial planning. Therefore, to build a comprehensive innovation system and boost the innovation capability of the national cultural industry, we must focus on theoretical creation as well as the transformation and renewal of ideas, overcome our dependence on Western theories to formulate new concepts and theories, address various problems and tensions exposed, and give theoretical guidance to the current practice of the cultural industry in China. Only by obtaining all the innovation capabilities in the sense of meta-theory can we proceed from the originality of our cultural industry and provide full support in ways of thinking, conceptual systems, and theoretical forms for its development and the establishment of a national innovation system. Only in doing so can a Chinese system be created while drawing on the achievements of human civilization.

CHAPTER 3

The Essence and Evolution of the Cultural Industry

What is the cultural industry? What constitutes the cultural industry? What are the basic and principal contradictions in the development of China’s cultural industry? What role does the cultural industry play in China’s current development? What is the relationship between this role and cultural construction, social development, and the fostering of national strategic power? What is the most basic standard of cultural industry development (according to the theory on the standard of cultural industry development)? How do we enhance the cultural soft power of a nation? What are the criteria? What is the proper way to deal with the relationship between the law of demand for such an enhancement and the market allocation of resources? How do we set the measures and criteria for risk assessment? All these questions have constantly caused concern, doubts, and worries that hinder the development of China’s cultural industry. They involve not only the definition and understanding of the cultural industry in general but also, more importantly, the formulation of China’s policies on the cultural industry and national strategies for cultural development. Therefore, the rapid development of the cultural industry in China, while changing the way Chinese culture develops and grows, raises a series of major theoretical and policy issues that also concern the practical aspect of cultural construction. This, after a tenyear boom in China’s cultural industry, has invested the discussion about the nature of the cultural industry with great practical significance; it is

© Social Sciences Academic Press 2022 H. Hu, The Development of the Cultural Industry in China, China Connections, https://doi.org/10.1007/978-981-19-3355-4_3

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of great constructive significance as well to explore the laws of evolution and innovation of the cultural industry as they reveal the fundamental principles of the industry.

1 The Essence of the Cultural Industry: An Overview of Its Sociocultural System 1. The cultural industry refers to the form of cultural productive force and social system of culture generated when the original cultural productive force and form of cultural production are no longer sufficient to meet the needs of cultural development The productive forces of cultural development have undergone three historical stages, namely, the preindustrial, industrial, and postindustrial stages. The so-called preindustrial stage is the period before the cultural industry came into being. For quite a long time in human society, it was one of the most important phases of cultural development. The cultural productive forces at this stage, which were traditional ones based on agricultural civilization and with manual production as the main means of production, adapted to the productive forces of human society as a whole. These cultural productive forces not only formed a compatible relation of cultural production and a cultural system built on it but also served as a driving force that met the basic needs of cultural development. However, with the emergence of the Industrial Revolution and dramatic shifts in the form of a social productive force, cultural development’s basic need for motivation also experienced great changes. As the original form and means of cultural productive force could no longer satisfy this new cultural need, changes became irresistible. Whether it is the revolution in modern printing technology known as “Project Gutenberg,” the emergence of the film industry, or today’s information technology and the Internet, which are profoundly affecting the progress of human society, history has invariably confirmed this basic law of cultural development. Hence, the cultural industry is not the product of some alien force external to cultural development but the manifestation of cultural development on a higher level that requires revolutionary transformation and an inevitable historical stage that accords with the law of cultural development.

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The form of cultural productive force relates directly to the definition of certain social formations. Cultural productive forces that rely heavily on manual production agree with the agricultural or rural social system; similarly, modern cultural productive forces based on industrial civilization and large-scale machine reproduction are consistent with the industrial social system or the internal structure of the industrial social system. It is in this sense that the cultural industry is regarded as the product of modern industrial civilization and a sign of progress for modern human society. The development of productive forces is in any case a historical measure of social progress and the level of civilization. Entering the twenty-first century, China proposed developing the cultural industry as a national strategy and part of the national development plan. This signifies that the development of China’s cultural productive forces and social system has entered a new stage dominated by modernization and distinct from that of our agricultural society and civilization that lasted thousands of years. Thus, it has become a modern symbol of the progress and development of Chinese culture. The birth of digital technology and the Internet marks the beginning of the age of information civilization. A new form of cultural productive force that is based on information civilization and relies on digital technology and the Internet as the main means of production—also known as a postmodern cultural productive force—is becoming a new feature in the development of the cultural industry. This will surely trigger a third revolution in human society since the birth of cultural products and cultural industries. Similar to the previous two revolutions of cultural productive forces, this revolution epitomized by the birth of the Internet will again reconstruct the social formation in cultural development and cultural productive forces in social development. The cultural industry, therefore, is not some interpretation or illustration of a certain development philosophy or policy but the organic unity of the needs of cultural industry development and social development. 2. The cultural industry is the most important driving force for social development Social development is driven by two elements: material production and spiritual production. As a social production system of cultural products, the cultural industry is one of the most important spiritual forces that promote social development. It propels society forward through thoughts

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and ideas supplied by the production system of the cultural industry and social changes driven by such thoughts and ideas. Printing was invented in China, but it did not ignite a revolution like the Protestant Reformation in Europe. The low efficiency of manual production led to the slow circulation of printed matter, making it impossible to spark a large-scale ideological revolution. This is one important reason why printing failed to trigger a social revolution and social changes in China. The Protestant Reformation launched by the European bourgeoisie was directly related to the invention of the Heidelberg printing machine. There is a positive correlation between printing productivity and the resulting publishing industry and the outbreak of an ideological revolution. The greater the capacity of ideological production, the faster its dissemination and diffusion will be, the easier it is for social changes and revolutions to take place, and the more conducive it will be for the emergence of new social productive forces. Why was the magazine La Jeunesse launched in Shanghai? Why did the Communist Party of China choose Shanghai as its birthplace? Why was the modern publishing industry of Chinaborn in Shanghai? The answers to these questions have to do with the modern productive forces created through the birth of modern industry in Shanghai. Large-scale machine printing requires an enormous amount of energy. The size of the development of Shanghai’s modern energy industry offered the great impetus for such mass machine production to evolve. There is also a positive correlation between this and the speed and scale of the early development of the film industry, music industry, and other cultural industries in China. As a result, the development of China’s cultural industry based in Shanghai took the lead in all of Asia. Meanwhile, the social transformation and innovation of Shanghai were racing ahead of other cities in the country and became a symbol of China’s modernization. As an important form of social productive force, science and technology is a major motive for the social division of labor and a direct cause of the division of labor in sociocultural production. Tradition, modernity, and new emergence influence each other and differ from each other, forming a complete sociocultural ecosystem. Modernity grows out of and merges with tradition to give rise to emerging industrial forms. The creative industry is to a great extent the product of the interaction between tradition and modernity. There is tension between the two, meaning they are mutually competitive and exclusive while also complementing and accommodating one another. Each enriches itself and

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strengthens and highlights its own existence through the other. Intrinsic modernity is of particular importance here. 3. The right to participate in the cultural industry is a human right; it is the right of the people to change themselves by changing the cultural industry It is an economic right as well as a sociocultural right centered on freedom of expression. Who has the right to give meaning to the cultural industry? What meaning has been given to it? This is a legal matter in the development of the cultural industry. Cultural products are a means of freedom of expression; their production is the act and process of achieving freedom of expression. The rich diversity of cultural products, along with their production mechanism and system, constitutes a complex social relationship between the cultural industry and freedom of expression. Freedom of expression and freedom of speech are important cultural forms and social development mechanisms in human society. However, there is no such thing as freedom of expression or speech in the abstract sense. They are but forms of freedom defined within a certain social system, that is, the legal system. As long as families and private ownership exist and as long as there are laws and states, there can be no abstract forms of freedom of expression or speech. They all must be concrete concepts defined within the framework of family, law, and the state institution. There is no freedom without responsibility. To rebel against one’s responsibility is to rebel against freedom. When responsibility becomes a legal obligation, failure to perform such an obligation will be inevitably punishable by law. In addition, to punish someone is to deprive them of a certain kind of freedom, because no one should be free to reject their responsibilities and obligations. Those who frequently demand freedom and lecture others on freedom are undoubtedly deluding themselves. They are chasing their own freedom while depriving others of it. The cultural industry is a form and medium of social expression. From verbal expression and expression through physical media to symbolic expression and expression of meaning, cultural products are not only the highest form of freedom of expression but also its minimum representation. Since all forms of cultural products are the result of sociocultural productivity under certain historical conditions, they are also historical forms of social freedom of expression and speech reflecting people’s

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perception, understanding, acceptance, and expression of such freedom under certain historical conditions. They undoubtedly embody sociocultural productivity and its corresponding sociocultural system at the time. This is the value and significance of all historical objects in today’s world. There is no point in talking about freedom of expression and freedom of speech without considering certain social and historical conditions, including the development of sociocultural productivity and the requirement of cultural development raised by the progress of society as a whole. In this sense, all forms of cultural industries and cultural productive forces reflect the social system in which the culture resides. To be more specific, traditional cultural productive forces and the system of traditional cultural products represent a conventional sociocultural system, while the cultural production system of a capitalist industrial society is manifested in modern cultural productive forces and the system of modern cultural products that rely mostly on mass machine reproduction. The development of the cultural industry, as well as the degree to which and the way in which freedom of speech and expression is achieved, exist in and emerge from such specific historical forms. This is true of the cultural industry throughout history. Thus, we can look at the relationship between cultural industry development and the social system in today’s China from a historical perspective to avoid cutting things off from their historical context in regard to the relationship between the development of the cultural industry and freedom of expression. In doing so, we can better develop, obtain, and safeguard our freedom of expression under the law while vigorously developing the cultural industry. Freedom of expression and speech is also a matter of politics, which leads us to the issue of political and cultural traditions in the development of the cultural industry. Different civilizations have different political and cultural traditions. The influence of a country today is determined by the conditions for its formation—developed countries and emerging economies included—and components of the different productive forces of agriculture and industry. Today, China is still an agricultural society perpetuating the thoughts and culture of a small-scale peasant economy that greatly influences its process of modernization. Traditional culture is a force driving the sustainable development of Chinese society and culture while also resisting their modernization with strong historical inertia. This is the inertia of an entire civilization, which will not be eliminated without the evolution and transformation of modern civilization over a long period of time. It is where productive forces and spiritual values

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in China’s social development overlap and clash with each other today. Such overlap and conflicts are demonstrated by the problems found in the process of developing the cultural industry. On the one hand, we need to develop cultural productive forces; on the other hand, we often do this in an outdated manner by “staking out our turfs.” This wrong approach has led to tensions and barbarism in the development of China’s cultural industry and inevitably destroys the endogenous drives for the development of cultural productive forces. 4. The cultural industry is capable of social restructuring Developing the cultural industry is not an end in itself. There are political, economic, social, and cultural purposes, of which cultural purpose is the fundamental one. The cultural industry is capable of regulating not only the economic structure but also political, social, and cultural structures. To give full play to this function of economic structure adjustment, we must put in place policies that encourage the vigorous development of the cultural industry. Since the existing policies in the cultural industry are consistent with the original cultural system, it is, therefore, necessary to innovate the old system of cultural policies and cultural institutions. This is what we call cultural restructuring. It is a reform of the original national cultural and political structure and cultural system. It is a political reform as it involves political restructuring. In other words, while making structural adjustments to the economy, the cultural industry is also reorganizing the political structure because the latter is indispensable to the former. This is the nature of cultural industry development and why it is significant to social restructuring. All political restructuring is social restructuring. In this sense, cultural restructuring driven by the need for cultural industry development is also a profound adjustment of social structures. How public institutions transition to enterprises and change the identity of their staff lies at the heart of cultural restructuring. The nature of institutions and staff identity constitutes the nature of a social system. The cultural restructuring that took place in the late twentieth century and early twenty-first century triggered the transformation of public institutions that used to depend on the government into market-oriented enterprises; authorized staff of state-owned institutions were also converted to company employees. This is the largest change in China’s social development mechanism and the

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largest social restructuring since the founding of the People’s Republic of China (PRC), especially after traditional Chinese operas completed their reform and the means of cultural production were taken into public ownership in the 1950s. This happened because it was necessary for the cultural industry to push cultural restructuring while adjusting the economic structure. This is another manifestation of how the cultural industry is deeply involved in social processes and revolutions. It is essentially a second round of social restructuring driven by culture since the reform of traditional Chinese operas led to the first institutional change in the 1950s. A new sociocultural system was thus created. The cultural industry is the policy instrument and support system of modern economic and social development. In 1998, the Blair administration formulated and proposed the “Creative Industries Policy” as a way to overcome the burden on civilization brought by the process of industrialization; in 2002, the Chinese government put forward an important solution to the structural tensions and institutional obstacles encountered in the process of strategically transforming the economic structure: to “vigorously develop the cultural industry” and regard it as an important policy for the strategic adjustment of the economic structure. China’s cultural industry has achieved remarkable progress in recent years. One fundamental reason is that the central and local governments have formulated various development strategies and plans for the industry and included them in the overall strategy for national economic and social development. The cultural industry has effectively overcome the imbalance between cultural and economic development and organically combined the two through the knowledge-driven economy. On this basis, it acts as an effective carrier for the upgrading of the industrial structure, adjustment of the economic structure, and development and transformation of social civilization. The development of the cultural industry, therefore, has become the most powerful mechanism of social transformation and reform. 5. The modern cultural industry is a product of the global historical process, and the development of the Chinese cultural industry reflects the course of global history in China Global history is the most important mechanism driving the development of China’s cultural industry. If the contemporary Chinese economy

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is only a general manifestation of the process of global history in the physical space of China, the contemporary Chinese cultural industry highlights how global history unfolds in the spiritual realm of the country. In the course of developing China’s cultural industry, the representation of global history in both material and spiritual aspects has been unified by the urban renewal movement and the urban–rural integration movement. Creative industrial parks and cultural and creative industrial parks that have proliferated in China are both typical examples. Creative industries were originally intended to “save urban civilization” from its destruction in the process of urban renewal, thereby giving new meanings and values to the act of urban renewal. The emergence of creative industrial parks in China as a form of cultural industry development is a process of discovering the value of urban civilization. This value, which was then applied to a new round of rural reform and development, is of particular significance to the preservation of rural civilization. When cultural and creative industrial parks were regarded as an instrument of development for the cultural industry and received enthusiastic support from the government, they began popping up across the country just as economic and technological development zones and high-tech parks used to. People were discovering for the first time that cultural and creative industries, which grew out of dilapidated factory buildings, old warehouses, and former docks in the cities left over from industrial civilization, were unexpectedly capable of creating such substantial economic benefits and value. The modern essence of the cultural industry has been dissolved, especially as new concepts such as “cross-industry” and “integration” continue to flood into the cultural industry and are used to define and redefine this industry. With the fusion of creative industries and cultural and creative industries, the cultural industry in the strict sense of the word has disappeared. Since creativity is everywhere, there is no industry that is not a creative industry. Since there is no industry without cultural influence and creativity in it, all industries can now be regarded as cultural industries or cultural and creative industries. The socalled cultural industry ceases to exist as its characteristics have vanished into cross-industry integrations. In the new course of global history today, is there any industry that has not crossed boundaries and integrated with another industry? Not agriculture. Not industry. In addition, certainly not the military industry. Why is it that the cultural industry alone enjoys such a peculiar social landscape? The reason is clear: In the concept of modern industrial development, the cultural industry falls into the categories of

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green industry and low-carbon industry. With the potential for growth enabled by policies, various sources of capital start swarming in, creating an unprecedented and spectacular capital boom in the development of cultural industries. The cultural industry has never been so “awash with money” as it is today. The cultural industry is essentially the production of spiritual content and the interpretation of the world. Its products relate to people’s understanding and acceptance of the world, and it is in this sense that the cultural industry acquires value as a manifestation of global history. Capital, which also reflects the existence and movement of global history, competes for value with the content of the cultural industry. The purpose of capital cannot be effectively achieved without depriving the cultural industry of its function of spiritual production, and the only way to do this is by dissolving the boundary of the cultural industry. Such a method of market allocation in capital operations is what we call defeating the “enemy” with the help of a much stronger hand. Is the Chinese phenomenon in cultural industry development also emerging as a universal law in countries where global history originated? This is a problem that China’s cultural industry should focus on from a global perspective. Otherwise, we might find ourselves alienated from global history after a long journey of cross-industry integration. Such is the tension between the development of China’s cultural industry and global history.

2 Social Relations in the Cultural Industry: Productive Forces and Relations of Production 1. The cultural industry is the sum of all cultural relations between humanity and society The cultural relation between humanity and society refers to the existence and composition of human beings as a species. Epitomized by the cultural industry, it is a complex system that includes the existence of humans in all fields of social activities—politics, economy, society, culture, and the ecological environment. The cultural relationship between humanity and society has evolved from a unitary one to one characterized by complexity and diversity. In the structure of human society today, its political, economic, social,

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and cultural relations are best embodied by the cultural industry. The cultural industry is defined not by itself but by its relationship to others, as no subject can be defined without first identifying its connection to the object. Therefore, to define the cultural industry, it is necessary to start with its relationship to other industries. For quite a long time in history, cultural production existed without forming an industry, which is a form of systematic social production. When the cultural industry took shape, it meant that the production of cultural products had gone beyond the scope of individual production and become the collective behavior of society. Such collective behavior indicates not only a general market demand for the production of certain cultural products but also universal recognition of certain standards for the production of such products, including their nature, shape, aesthetics, ethics, and so forth. Only when the production of a product is widely accepted can its mode of production become a collective choice, and through this choice, we communicate with and acknowledge each other, thereby realizing the exchange of value. A product that cannot be exchanged for spiritual value is not a cultural product. Its production, by inference, is not cultural production, and the system to which it belongs is not a cultural industry. As a means of communication and expression created by humans to address common life issues, cultural products facilitate cultural transmission and memory, thereby ensuring order, coherence, and sustainability in our collective life. Therefore, it is a spatial form of human life, namely, our cultural life. It is a spiritual space of poetic dwelling that corresponds to the physical living space. Driven by the need for human beings to live and develop together, we constantly create cultural products with an infinite variety of forms to show the rich diversity and complexity of our collective life. Naturally, cultural products become an interpretation of human life; the history of the development of cultural products is the history of the formation, evolution, and interpretation of human society. The various forms of human society are presented in this space. What cannot be shown and expressed in the physical space of reality is coming to life through cultural products, creating a world of spiritual production that differs from and even runs counter to the material world. As a result, whatever content contained in the physical space is present in cultural products; even those that are missing from the material world can be found in cultural products in all their profound and colorful forms. Without such a spiritual manifestation as cultural products, human society

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would not have existed at all. In a way, human society exists in the world of cultural products created by human beings. It is through cultural artifacts that still exist today, created by prehistoric humans, that we have been able to demonstrate the existence of humans from tens of thousands of years ago to the present day. The cultural industry is the “tree of life” of cultural products, while cultural products form a circulatory system that supports the cultural industry. It is a constantly growing and internally driven circulatory system, without which the tree of life would lose its vitality. The existence of the cultural industry, therefore, relies solely on cultural products. The cultural industry is such a social production system of life, a spiritual supply system that provides effective help to human society, improves work efficiency, and realizes value, and a spiritual ecosystem and production mechanism that meets the needs of human society. It is a tool that produces meaning to help us address problems in our spiritual and material interactions. Cultural products, on the other hand, are the spatial form of human life, a place inhabited by the spirit and soul. They began as a means to satisfy one’s own needs and later developed into a vehicle for communication, understanding, and dialogue that serves others as well. Different cultural products play a common role in comforting people’s souls, although their specific content may vary tremendously with the way the human spirit and soul reside in them. In addition, it is because of this that different people are able to communicate with and understand each other through cultural products and share our lives on the same planet. All industries are composed of the relations between humanity and society. The cultural industry establishes cultural relations between people and society, which differentiates it from agriculture, industry, and other industries in the service sector. It is a vehicle for spiritual production and expression, as well as an intermediary with which people guide or gain an understanding of the world. This is what distinguishes the cultural industry from other industries: the ability to interpret and transform the world.1 This exclusive right to interpretation guides people’s 1 In his Introduction to A Contribution to the Critique of Political Economy, Karl Marx pointed out that the human mind has a variety of different ways to appropriate the world, and art “appropriates the world in the only way possible for it,” which differs from others. He stated: “The concrete totality as a totality of thoughts, as a concrete mental phenomenon, is in fact a product of thinking, of conceiving; but by no means a product of the concept which thinks and gives birth to itself outside and above perception and conception, but a product of the working up of perception and conception into

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understanding of the world and thereby influences and regulates people’s behavior. To own and control the cultural industry is to possess and control this right to interpretation. This is a social system that reflects not the general production relations of cultural products but the cultural relations between people and society. In conclusion, the cultural industry is a social production system where technologies continuously elevate and penetrate our mentality, behavior, concepts, spirit, and knowledge; it is a product of the “technological transformation” of human nature or the human spirit. This makes it a living, practical application of truths. 2. Understanding that the cultural industry is a living structure provides the basis for us to recognize the cultural industry as the sum of all cultural relations between humanity and society The cultural industry is a living structure that is complete with its lifespan and life cycle. The life of a structure lies in its organic and regenerative nature. First, it is a living system, the components of which are interrelated and complementary. As a form of life with a complete structure, the absence of any component turns it into another form of life. The essential difference between the living structure of the cultural industry and that of any other industry resides in its spiritual productivity. The cultural industry is an industry of spiritual production that satisfies people’s spiritual needs with spiritual products. Therefore, it is structured in a way that is similar to the spiritual life of human beings. In other words, it is the structure of people’s spiritual life that gives form to cultural products and then structure to the cultural industry. The organic nature of a structure is manifested in its ability to regenerate, namely, to replicate itself and others. Self-replication is an extension of natural life, the most typical example of which is mechanical reproduction. The replication of others is a conversion of their life forms: converting the plot of a novel into the plot of a movie, for example. Here, the organic nature of concepts. The totality, as it appears in the brain as a totality of thoughts, is a product of the thinking mind which appropriates the world in the only way possible for it, a way which differs from the artistic, religious and practical-intelligent appropriation of this world (Marx and Engels: Selected Works (Volume 2, Page 104).” Here, Marx proposed an artistic “appropriation” of this world that is fundamentally different from the theoretical (philosophical, scientific) way, the “religious” way and the “practical-intelligent” way. In addition, the cultural industry synthesizes all these systems of spiritual production and processing.

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the original structure does not change with this conversion. In the movie industry, there is a type of film called genre films that falls into this category. In regard to specific operation models, nearly identical programs, homogenous industrial distribution, and the cultural industry are all the result of the replication of others. In contrast, a classical structure is full of life, especially in the management of cultural industries. It is capable of constantly generating new forms of life. Disney is a case in point. The structure of the cultural industry is composed of internal and external spatial structures. Its internal spatial structure refers to the proportion of different forms of cultural industry. In terms of its life forms, cultural industries can be divided into macro and micro cultural industries. Macrocultural industries are manifested more in the external relationship between the cultural industry and politics, economy, society, and culture, while microcultural industries refer to the internal relations within industrial organizations. Naturally, the strategies for cultural industry development are categorized into macro and micro strategies. The former are holistic, long-term, and general strategies formulated mainly by the government to orchestrate the development of cultural industries at the state and governmental levels by looking at cultural industries and other aspects as an interconnected whole; the latter are market-oriented organizational behavior of cultural enterprises identified by the enterprises themselves to guide their own operation and development according to principles for the development of the market economy. Why do we need cultural industries? From the perspective of the historical progress of cultural industries, searching for new ways of expression when there are not enough is an important endogenous impetus for the birth of cultural industries. When this impetus leads to the emergence of new industrial forms that become new sources of wealth, the exogenous cause for the development of cultural industries comes into being. The need to express oneself is therefore combined with the need for wealth growth and expansion to promote the development of cultural industries in society. The expression generates public opinion, triggering political interference in expression, specifically the censorship of cultural products and the market access system for cultural industries. So generally speaking, the class in control of the means of material production also holds the means of spiritual production. Market access of the cultural industry is essentially an institutional control of cultural expression. Here,

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whether by permitting or restricting access to the cultural industry, a relationship between the cultural industry and politics, namely, the political relation between the cultural industry and people, is formed. This political relation presents itself as national cultural sovereignty internationally and as national cultural rights domestically. Since politics epitomizes the economy, all institutional arrangements that manifest themselves in cultural and political relations also reflect the economic relations of the cultural industry. The external spatial structure of the cultural industry consists of its relation to politics, economy, society, and culture. The structure of the cultural industry in a country or region and the level of its modernization are a reflection of the extent to which such a country or region has developed politically, economically, socially, and culturally as a whole. The structural differences in the scale and types of cultural industries in different countries and regions are not determined by the growth of the industry itself but by the external environment and conditions that determine its growth, namely, the external spatial structure of the cultural industry. The formation of such an external spatial structure is closely related to spatial relations in the physical sense, especially when these external spatial relations take the shape of geographic orientation and geospatial composition. The latter is of great significance to the development of the cultural industry. The large-scale development of China’s western region is a major long-term strategy for national development. It not only improves the underdeveloped economy in the western part of the country but also rebuilds all relations between people and society in the entire region and thereby the country. Blessed with a very rich reserve of cultural resources, the western region was one of the most important origins of Chinese culture and one of the meeting places of the world’s four major civilizations. From Mount Qilian to Hexi Corridor and the Silk Road, the region used to dazzle the world with its unique Chinese cultural elements. There is no doubt that only in this historical process can the cultural industry and its spatial composition in the western region of China achieve new, proper, and logical development. However, the deterioration of the ecological environment of the western region over time, while shaping cultural sites such as the Jiaohe Ruins and the Ancient city of Gaochang, has left us with the resource-exhausted city of Yumen. As the local population and culture continue to migrate to the east, restoring

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the natural environment, which is the basis and prerequisite for rehabilitating the cultural ecosystem, becomes more strategically important than developing cultural industries. Only when the natural and cultural ecosystems regain their vitality can cultural industries in the western region develop in a sustainable way. In terms of geographical distribution, the strategic focus of China’s cultural industry is not on the western or eastern regions but the central part of the country, with the six neighboring provinces of Shanxi, Henan, Anhui, Hubei, Jiangxi, and Hunan and the largest portion of the population in China (nearly 400 million people, accounting for 28.1 percent of the national total). The growth of the new middle-income group has given birth to a new cultural consumer market, which will activate the infinitely abundant cultural resources in the central region with greater energy than ever. This is unmatched by the eastern and western regions for various reasons. First, the new middle-income population is not evenly distributed in China. Second, the growth in local demand and opportunities is largely determined by the stage of economic development and the quality of local cultural resources. Finally, economic growth and the formation of middle-income groups are closely related to the level of infrastructure development in a region. Thanks to the rapid emergence of city clusters in the central region and the deployment of modern infrastructure based on high-speed rail and airports as well as its connection with the “Belt and Road (the Silk Road Economic Belt and the 21stCentury Maritime Silk Road)” through the transportation network of sea, land, and air, the entire central region has become the strategic hinterland of China’s overall development, providing a core framework for logistics, population mobility, and cultural flow. Such geographical distribution that focuses on cultural industry development in the central region has given it unique strategic advantages that will fundamentally alter the spatial structure of the development of China’s cultural industry. Meanwhile, the new energy system created for regional political, economic, and social development will help the central region escape the middle-income trap—an economic development situation where countries or regions have quickly reached middle-income status but then get stuck at that level. Therefore, it should be a future strategic goal for cultural industries in China to shift their strategic focus to planning and managing the central region. Economic strategies and policies such as economic zones, city clusters, functional zones, the Belt and Road Initiative (BRI), and the Yangtze River Economic Belt (YREB) are constantly being updated. One cannot

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help but wonder how and whether cultural industry development can adapt to such changes. For many years, urban and rural areas have been more than the places we choose to live; they represent our identity, status, and value. The shift in identity that people aspire to is based on the inequality of value between urban and rural areas. If they were equal in power and value, would the urban–rural divide remain wide as it is today? The key to urbanization is to correct such inequality. Where you live won’t matter anymore if urban and rural areas are equalized. At present, economic rationality, rather than the return to humanistic rationality, is still the driving force behind scientific rationality. The urban–rural dichotomy and all the resulting cultural relations between humanity and society will still be the most basic sociocultural relations that will affect the development of China’s cultural industry in the long run. Changes in such relations will fundamentally reshape the spatial relation and structure of cultural industry development in the country. Regional imbalance and functional zoning create the need for the redivision of labor and the reconstruction of cultural relations in the cultural industry. Regional development shows distinct features at each stage. Today, China’s cultural industry is facing new opportunities and challenges. Its mode of development, in which all regions go all out to make quick advances, is in urgent need of reform. At the present stage, we must establish a new development strategy that is compatible with functional zoning, combine the protection of intangible cultural heritage through production with the development of cultural industries with distinctive characteristics, and integrate the inheritance of fine traditional culture with its modernization. The functions of various areas in the cultural industry differ from each other, forming an important mechanism for nurturing people’s cultural consumption habits, creating cultural markets, enhancing cultural consumption power, and building up energy in different areas. Only through such a mechanism of division of labor can we regenerate and accumulate the largest amount of cultural energy with less resource consumption. In this way, we can preserve resources for sustainable cultural development in the future while improving the social life quality of the current generation and the cultural soft power of our nation. Therefore, based on the principle of functional zoning, we should optimize the spatial structure of the cultural industry, readjust strategies for regional development, and facilitate the concentration of functions in each

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area of the industry by planning and building functional zones. This is one of the most important strategic suggestions proposed in this thesis. The coexistence of agricultural civilization, industrial civilization, and information civilization constitutes a unique “triple-layer” structure in current Chinese society. Such a “triple-layer” social formation is then mirrored in the way traditional cultural industries, modern cultural industries, and postmodern cultural industries coexist and overlap with each other. This contributes to the unprecedented complexity of sociocultural relations, as seen from the structure of our cultural industry. Longterm structures such as the geographical environment, our daily life, and cultural traditions produce a long-lasting effect on the development of China’s cultural industry. The cultural industry becomes the embodiment of this historical development and in turn exerts a long-term influence on it by reshaping the relations between humanity and society in terms of geographical conditions, daily life, values and attitudes, and cultural traditions and history. It is in this sense that the cultural industry becomes the sum of all cultural relations between humanity and society. 3. The cultural industry is the spiritual production system of a society Through the production of spiritual products, the construction of social spiritual order and the transformation of our spiritual and conceptual systems—namely, our cultural consumption behavior—the cultural industry reshapes the way people and society behave, thereby affecting our concepts, thinking, and choice of material production and reinventing the system of material production that turns the mind into matter. Since human society entered the stage of conscious development, all products in the material world have become conceptual and therefore spiritual. People have begun to focus on the appearance and quality of consumer products themselves. The original material order evolves into a spiritual order, and during this process, a sociocultural order is formed. Hence, the order of the cultural industry is a manifestation of this sociocultural order. The spiritual production of culture can be divided into individual production and collective production. Either way, and in whatever form they exist, there is an interrelationship between them and the social spirit. Individual production interacts with the social spirit and establishes a social relation with the collective through spiritual production, otherwise

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known as a social spiritual relation. The form and complexities of the spiritual production system reflect the relationship between individuals and groups. Thinkers, artists, teachers, scholars, craftspeople, and cultural workers (reporters, publishers, journalists, and so on) constitute the most basic unit in the spiritual production system. Analyzing the composition and characteristics of spiritual production groups is key to studying the complexity of cultural production relations. As the most important aspect of spiritual and cultural production, ideological production is of particular significance in the entire system of cultural production, which is why modern states rely heavily on it for cultural governance. The cultural industry dominated by ideological production is being replaced by the “pancultural industry” that focuses on the entertainment culture. Ideological production is losing its dominant position in the cultural industry. The industry has entered a new era of greater division, integration, and competition. With greater division, the cultural industry is evolving into subdivisions such as cultural industries, creative industries, and cultural and creative industries. Greater integration means that the modern media industry, which is gradually losing its previous dominant status in the cultural industry where digital technology and creative design are taking over, is seeking either a marriage with digital technology or a partnership with creative design. Greater competition refers to the increasingly fierce internal competition between various parts of the cultural industry as a whole with the deepening of division and integration. Each part is fighting a desperate battle to defend its position and right to exist against the rest of the industry. To be or not to be? Facing the trend of digitalization and virtualization, this is becoming the ultimate question for every part of the cultural industry. The order of the cultural industry, essentially the freedom of spiritual expression and its system based on values, is structured in the same way as the cultural spiritual order. Order is constructed on the rationality— the way everyone thinks it should be—of a certain distribution of power. Confrontation over the nature of the cultural industry is inevitable and long-standing. This is the most daunting task in the construction and development of China’s cultural industry now and in the future, as the nature of the cultural industry will not be defined by the country alone and the structural power of the industry will be in the hands of those who define it.

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3 The Social Evolution of the Cultural Industry: A Process Similar to Biological Evolution 1. The cultural industry is an important product of social evolution with distinct characteristics of biological evolution The cultural industry is a new social, cultural, and economic form emerging with the evolution of our society from an agricultural one to an industrial one and then to the information society of today. It is an important product of social evolution with distinct characteristics of biological evolution. Everything develops according to its own internal logic, and cultural industries are no exception. They evolve in different ways that support different systems. The evolution of the cultural industry is one specific form of social evolution. Unlike other forms of social evolution, it is social spiritual evolution and is therefore often considered revolutionary. The cultural industry as a social system evolves in a way different from that of any species in general; rather than evolving as a whole, it is a gradual and structural process from one industrial form to the next. This is directly related to the development of social productive forces. In other words, not all tools can be applied to meet people’s need for social and cultural expression; the emergence of new forms of the cultural industry depends entirely on the extent to which the tools for scientific and technological representation can be used to satisfy such a need. The key is whether this new tool can give birth to a new form of the cultural product while adapting to the human need for expression. Only a social system of culture formed with a new social division of labor, which results from the emergence of a new form of cultural products and their mass production and dissemination, can become a new form of cultural industry. If we compare the cultural industry to a tree, its branches will grow out one by one and eventually into a towering tree. The tree as a whole is the cultural industry, and its branches are the performing industry, the art industry, the publishing industry, the film industry, the television industry, etc.. This course of evolution contributes to the uniqueness of the cultural industry system, where the trunk defines the properties of each of its branches, although each of its leaves is different. There are no two identical leaves in the world, which means that the cultural industry is diverse in its content and form. Since it is regarded as a life system with “vital

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signs,” it has to follow the law of periodical change. In other words, there will be a life cycle of growth and death on any branch of the tree. It is these life cycles that constitute the law of evolution shared by all forms of the cultural industry: from inheritance to mutation, and then to breakthrough, the process repeats itself in endless cycles and manifests itself in cultural products. Existing research has revealed that science and technology are leading driving forces for the development of cultural industries.2 Here, the development of science and technology plays a particularly important role in the evolution of all cultural industries, as the approach and level of its development determine the evolution of cultural productive forces. To some extent, the evolution of the cultural industry is a history of how science and technology are integrated with cultural production. Just as all scientific and technological progress is an evolutionary history of human society, the cultural industry is also a living sociocultural system that keeps on evolving. The mutation of the form of cultural products is an important feature in the evolution of the cultural industry, meaning a new form of the cultural product does not result from the development of any existing form; it is related not to the product’s own structure but to the modern evolution of science and technology. This intrinsic evolutionary relationships between different forms of cultural products lie in the interchangeability of their content. For example, books and movies rely on different media: Movies cannot satisfy people’s consumption demands without the help of machines, while books must exist independently from machines. The only thing that constitutes an evolutionary relationship between the two is that their content is interchangeable: The content of books can be adapted into movies, and the content of movies can be reproduced and recreated through books, thus driving the evolution of cultural products.

2 You Fen and Hu Huilin, “On Long Wave Theory and Periodicity of Cultural Industry,” Journal of Shanghai Jiao Tong University (Philosophy and social sciences) 15, no.4 (2007): 66–73, https://doi.org/10.3969/j.issn.1008-7095.2007.04.009; Hu Huilin, Essays on Cultural Industry by Hu Huilin (Kunming: Yunnan University Press, 2014).

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2. The cultural industry manifests the law of social evolution in the generation of cultural resources The generation of cultural resources follows different laws at various stages of civilization in a human society driven by diverse sociocultural productive forces. Before human civilization came into being, there were no cultural resources on earth, only the possibility of generating cultural resources. The emergence of mankind kicked off the history of civilization and the production and accumulation of cultural resources. Symbols carved on the ground were the earliest form of cultural resources of primitive human civilization. They were essentially a way to remember information that stemmed from the need of human beings to navigate the earth without getting lost. Derived from such symbols, our writing system composed of characters serves to record information for generations to come. Paleolithic and Neolithic artifacts, petroglyphs (or rock paintings), ancient painted pottery, and inscriptions on bones or tortoise shells constitute a system of cultural resources in early human civilization. With creative and ingenious workmanship, humans weave a world of the mind and establish a spiritual and spatial relationship between people and the world. Before the writing system became a new method to produce cultural resources, the production and accumulation of cultural resources were integrated with our material production. The evolution of human civilization, is the longest period with the most abundant cultural resources accumulated by all races and nations in human history. Today’s human civilization is built on this solid foundation. Traditional cultural products that depend largely on manual production led to the birth of traditional cultural industries. As industrial civilization ushered in a new chapter of human history, modern cultural industries were born with modern cultural products produced through large-scale mechanical reproduction. They form the most important production system for modern human civilization and thereby act as an essential factor affecting the generation of cultural resources in modern society. Although replicable through molding, handmade products are reproduced independently on a small scale; as cultural resources, they are not easily transmissible. Simple and yet complex, large-scale mechanical replication is one of the most important social biological mechanisms for the generation of modern cultural resources. Early cultural resources are historically significant and valuable in a way that is unattainable for today’s people, but the method of simple and limited reproduction makes it impossible for them to satisfy

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our demand for mass consumption. Reproduction on an enlarged scale has become a major principle guiding the modern production of human cultural resources. The modern cultural industry is the product and reflection of the logical development of this principle. Without it, there would be no modern society. Through large-scale social production and reproduction of cultural resources, the modern cultural industry is able to meet the demand of modern society for the consumption of cultural resources. With the continuous expansion of this demand, the industry as a tree generates new rings of modern cultural resources to indicate their modern attributes. The evolution of the production and reproduction of cultural resources stems from the evolution of the tools of cultural production, of which science and technology are the direct driving forces. Without the use of modern production tools, there would be no modern cultural production or modern cultural industry. Films and the film industry are typical examples. The application of modern cultural production tools not only changes the way cultural industries exist in society but also profoundly influences the habits of people as social beings. Manual production aligns with the human mind and spirit, as the hand is an external extension that expresses the mind. In the process of evolution, our handmade products have thus accumulated into the intangible cultural heritage and become a symbol of identity and values. Machines, on the other hand, are separate from the human heart and therefore alienate and reject human nature, which is exactly what capital needs. Machines that manufacture cultural products are constantly being eliminated by new technological inventions in the course of evolution and finally enter the museum as a demonstration of civilizational achievements. This is also a history of how capital evolves in the cultural industry. The two totally different ways of producing cultural products put cultural industries on two distinct paths of evolution: one is elevating cultural products into intangible cultural heritage, while on the other path, the industry is constantly enslaved by the technicalization of capital. If the machine production of cultural products, while rebuilding the spiritual and cultural relations between humanity and society, cannot refine and create new forms of cultural products, its elimination will become a logical outcome of historical evolution. For example, Shanghai Film Technology Plant has bid farewell to the age of cine film, which marks the end of an old era for the cultural industry and the beginning of a new era for

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Chinese movies: the digital age. This is an inevitable result of the technological revolution in film production and distribution. The life of movies, however, exists not on the cine film or in any digital media but in the content displayed on the developed strips. If the digital revolution fails to bring about more diverse forms of social expression, it is not improbable for society to return to the age of cine film. The “return to classicism” in creative product design and creativity in general in creative industries and cultural and creative industries is a case in point. The spiral development of history has found its profound manifestation in the evolution of the cultural industry. Therefore, in an era of cultural industries supported by both culture and technology, if culture disappears, there will be no cultural industry left because technology alone does not constitute the cultural industry. In conclusion, the evolution of the cultural industry has undergone three stages: manual production, machine production, and the age of the Internet today. This is the basic law of cultural industry evolution. The first stage is where we aligned our hands with our minds and where handmade products embody the characteristics of the sociocultural ecology of traditional cultural industries. In the second stage, machines took the place of our hands and alienated our minds; in other words, the biological nature of mankind was excluded from cultural production as capital took over. The modern cultural industry is characterized by the replication of products. (This may be precisely what the Frankfurt School criticizes.) The third stage separates people from the real world as the Internet replaces real life and divides society, which means the social nature of mankind is removed from the cultural industry; online games constitute the sociocultural ecology of the emerging cultural industry (postmodern cultural industry) as the real society is replaced by the virtual society. The evolution of the vehicle for cultural industries challenges the traditional content evolution. 3. Spatiotemporal evolution is another important law governing the development of the cultural industry Any shortening of distance in space and time inevitably leads to adjustments and changes in the structure of power and the reallocation of political, economic, social, cultural, and ecological resources. While making travel more convenient, the high-speed railway has also altered

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people’s spatial relations and reorganized the allocation of spatial cultural resources, relations of cultural production, and relations of cultural consumption. The compression of space and time will change the ecological environment and spatial structure of the cultural industry. As a line from a poem by Li Bai goes, “I have sailed a long distance to Jiangling in a day.” The development of China’s cultural industry is entering the era of high-speed trains. Under this circumstance, the strategy of cross-regional, cross-industry, and transownership development takes on new meanings. New strategic thinking and theories are needed to study and summarize the spatial transformation of the cultural industry, which is undergoing profound changes. The BRI, the YREB, and a series of strategies of geospatial revolution put forward in China’s urban development planning and process of urban–rural integration, while reshaping the social geospatial relations in various fields, will also redefine the spatial cultural relations among people; this will be profoundly manifested in the evolution of spatial relations in the cultural industry. The original allocation of cultural resources through administrative division is met with unprecedented changes in geospatial strategy. If the BRI brings about a revolution in the external spatial relations of the cultural industry, the YREB and China’s urban development planning will trigger a revolution in internal spatial relations and thereby radically restructure the strategic geographical layout of the industry. The ongoing cultural restructuring may face the possibility of a redesign before it is completed. Strategic reorganization and strategic entity restructuring may be the new choice for the development of China’s cultural industry in the age of high-speed railways, where the spatial relations and forms of market competition are no longer what they used to be. The evolution in spatiotemporal relations caused by increased mobility subjects all changes to great new uncertainties, as all means of transportation are the creative derivative of the social biological function of people. As a result, China’s cultural industry will have to focus on research on the macrocultural landscape and its evolution and cultural development strategies in the country. This is a subject closely related to changes in the larger environment, which will fundamentally alter our perceptions of the development of cultural industries and the redesign of relevant policies. The cultural industry is a systematic science based on a global vision. In the world today, deep changes are happening to everything; cultural industries, as a form of cultural ecology and existence, are no exception. These changes are unexpectedly interconnected. The change in cultural

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ecology brought about by the cyberculture effect is globally pervasive throughout all cultural circles. Meanwhile, only by looking at the system of cultural industries as a whole can we have a more objective and realistic understanding of the local changes that are taking place. To draw an analogy, monsoons, a regional natural phenomenon, are intrinsically linked across different regions and form a global monsoon system that is crucial to our understanding of each climate subsystem. We should therefore look at the cultural industry as a systematic science, reflect on the problems in China’s cultural industry against the backdrop of global cultural development, and analyze the following issues: the relationship between the cultural industry and the evolution of the sociocultural ecology, the evolutionary relationship between the structure and components of the cultural industry, and the relationship between the cultural industry and forms of cultural development, specifically the exchanges between different circles of the cultural industry. Human beings live on the surface of society; what we care about first and understand the most is surface culture. However, cultural phenomena seen on the social surface are all deeply rooted. Such deep culture, referring to people’s means of livelihood and the institutional culture closely connected with it, acts as a foundation supporting surface culture. Without it, the social system cannot be understood. The larger the range of space and time is, the more it is true. In the combination of deep culture—people’s social lifestyles and the value system based on them—and surface culture, new breakthroughs are brewing. Apart from integration caused by economic globalization, the ecological environment of culture and sociocultural biodiversity in many areas are increasingly threatened by the loss of indigenous cultures. Specifically, the cultural ecosystems associated with indigenous cultural spirits are losing the ability to repair and rebuild themselves. This results in the unsustainable development of cultural ecosystems and thereby creates cultural wastelands. Cultural encounters happen slowly, which means that there will be a delay in their impact on the surface cultural system. Over a long period of time, their influence on the tectonic movement of social culture will become visible. Domestic talent shows pioneered by Hunan Satellite TV’s Super Girls represent the largest entertainment revolution in China’s cultural industry in over a decade. They have not only initiated a new form of production and consumption of television entertainment but also created a new form of revolution in entertainment consumption. Live

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webcasts and the resulting “cyber celebrity economy” are variants deriving from such live talent shows and the talent shows economy. This cultural feast of hustle and bustle on the surface drives changes in people’s means of livelihood. Fueled by the rosy prospect of rising to fame and fortune overnight, our original means of livelihood and values are disrupted and mutated, breaking the initial combination of “genes” and rendering inheritance impossible. Among all the components of national culture, people’s means of livelihood are the true foundation. Of all the relations between various forms of cultural expression within the cultural structure, the one between the means of livelihood and the associated economic and social customary norms is the most fundamental. They form a deep cultural foundation, without which surface culture and mid-level culture based on it will wither away sooner or later. As a medium and manifestation of cultural gene combination in modern human society, the cultural industry bears the great responsibility of cultural preservation and continuation. In this process, a selective cultural “metamorphosis” also takes place. However, just as mutations in any biological genome can lead to biological disasters in human society, mutations in the genomes of cultural organisms can also give rise to cultural calamities. Therefore, no matter how much we value the economic development of the cultural industry, we should never confuse our priorities by putting undue emphasis on innovating the carriers of the industry when seeking opportunities. The value of the cultural industry rests entirely on its content and the evolution thereof. To maximize market space for cultural industry development and innovation, the innovation of cultural content and cultural carriers should be combined in an organic way. It is therefore the most important responsibility for the development of the Chinese cultural industry to prevent the mutation of cultural genomes from causing havoc to the sustainable development and genetic variation of our national culture. The evolution, security, and crises of civilization are simultaneously exerting a profound influence on the development of China’s cultural industry. Meanwhile, they are forcing us to consider our cultural history in the context of civilization, look at the future of our civilization from the perspective of sustainable development, and live our life in nature and society with ecological integrity in mind. The current way of developing the cultural industry at the cost of cultural resources and the cultural environment will have to be re-examined. The ability of cultural resources to regenerate themselves will be a new concept guiding the development of the cultural industry in China.

CHAPTER 4

The Spatio-Temporal Structure of the Cultural Industry

The cultural economy exists in a certain space and time, giving it distinctive characteristics of its time as well as regional and cultural diversity. Because of time, its development follows historical continuity; thanks to spatial differences, we can compare its development across various countries and regions and draw lessons from others. The study and practice of the cultural industry as the cultural economy in its concrete form regard the spatiotemporal structure of the cultural economy and its laws of movement and change as a priority. We should study not only universal laws of the industry across space and through time but also particular laws of cultural economic movement in specific space and time.

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Cultural Economics of Space and Time

Drastic changes in space and time have caused unprecedented fear, anxiety, and confusion among people today. The mushrooming of cultural (creative) industrial parks in China is a striking “symptom.” Fueled by a sense of urgency and crisis, the concepts of time and spatial efficiency have never been such a driving force for innovation and transformation in the cultural industry. However, people’s understanding of the relation between space and time and all cultural and economic behavior, as well as the value of these two basic ideas in forming such behavior, is out of balance with their positive attitude in practice. This leads to an important

© Social Sciences Academic Press 2022 H. Hu, The Development of the Cultural Industry in China, China Connections, https://doi.org/10.1007/978-981-19-3355-4_4

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but often-neglected topic in the study of cultural economics: the relations between the cultural economy and space–time. 1. General relations between the cultural economy and space–time Why is it that most people’s cultural consumption (especially entertainment consumption) occurs at night? Even with twenty-four-hour television and Internet access, the “prime time” for cultural consumption is still in the evening, or technically speaking, after dinner? Why are people always curious about things other than themselves? Why do cultures differ more with distance? This is related to the circadian rhythm of people, namely, how we allocate our time. In other words, the allocation and use of time and the arrangement and regularization of one’s own material and spiritual lifestyle on this basis are essentially a process of time. In this sense, all of our material and spiritual production and consumption are related to time, and all the economic behavior and outcomes resulting from this fall into the category of the economics of time. The cultural economics of time is the study of the relationship between people’s cultural production and consumption and time and the relationship between cost and efficiency and time. It aims to answer this question: How do we allocate time in the cultural economy in the most cost-optimal way? That is, in what period of time can we simultaneously achieve the highest input–output efficiency of cultural production and the lowest transaction cost? Culture is temporal but produced, remembered, and stored in space. In the Paleolithic, Neolithic, and Bronze Ages, the temporal nature of culture was presented through the evolution of tools and productivity. Later, dynasties were used to divide cultural production into periods, marking the cultural contributions made in different historical stages and the spiritual phenomena created by human society at that time. Then, as our pace of cultural production quickened, dynasties were no longer sufficient to signify landmarks in the development of cultural production. The cultural economy of the time was therefore further divided into different ages or eras. This is the time sequence of culture, which reflects a pattern of thought in how we understand cultural evolution. Hence, the cultural heritage of humanity and the art economy came into being. Culture is also spatial but produced, remembered, and marked with time. The spatial nature of culture used to be manifested in the changing

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similarities and differences in people’s living and production sites, as seen in examples such as the Hongshan culture, Majiayao culture, Liangzhu culture, Nile culture, Mesopotamia culture, and Yellow River culture. The rich diversity of the spatial development of the cultural economy was indicated by similar practices of cultural production in different places. Later, separated by the natural space, the cultural and economic behavior of humans acquired their social nature. When the location was not enough to convey the spatial extension of our cultural and economic activities, the regional cultural economy came into being. The cultural economy of space was then universalized and became a new thinking pattern in people’s perception of culture. Then, came the modern state. The cultural economy of space was institutionalized as natural separation evolved into social boundaries. States established systems of the cultural economy from which international cultural trade was born. Culture is valuable because of time and diverse because of space. Diversity lies in otherness. Otherness signifies scarcity, which is an important source of value. Time creates cultural scarcity, while spatial separation causes difficulty in cultural exchange. Due to the lack of cultural reference, people in a certain region or country can only design their lives and understand the world based on their own imagination, thus forming only one culture of its kind. The protection of cultural diversity is both temporal and spatial. For today’s human civilization, diversity was, is, and will always be scarce. As a result, space and time meet and merge into the scarcity of culture, which contributes to the value of the cultural economy. The concept of “indigenous cultures” that is gaining traction today recognizes the value of both space and time. To consume the indigeneity of a culture is to consume its diversity, otherness, and scarcity while resisting a sense of alienation caused by modernity. Indigenous cultures are also capable of evolving. However, rather than going off course, their evolution sticks to the original route. This is the biological trait of cultural evolution. To evolve is to adapt to the changing space and time. It is the survival of the fittest that also applies to the development of the cultural economy. People fear time because the passage of time is the passage of life; fear of time is fear of death. The only way to hold on to time is to create more of it, thereby extending our lives. This is why we produce and consume all the cultural products of time concerning the past, the present, and the future, hence the cultural economy of time. It involves not only cultural reproduction from the past but also cultural production in the future. The

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production of all science fiction is cultural production about a time yet to come. People dread loneliness, and therefore space. For this reason, we create space in the form of culture and cultural products. We no longer feel lonely as our spirit comes to life in the form of the space surrounding us. Thus, with reality as the “central axis,” we can extend our lives in two opposite directions at the same time, forming a three-dimensional space of cultural life. The length, breadth, and thickness of human life is then conveyed in the spatial structure of time and the temporal structure of space. Our fear of space and time, specifically of life, is dispelled through this mutual restructuring of space and time. In the cultural economy of space that concerns time and the cultural economy of time that relates to space, human life is eternalized. Time is related to natural rhythms, which are associated with climatic movements. This connects time with the climate and thereby with people’s choices of cultural production and consumption. For example, people need to escape the heat in summer, so places with a temperate climate become popular with tourists. There is a connection between our cultural production and consumption preferences and the climate that is shaped by time. The biological clock of the human body oscillates with time, leading to the spatial transfer of cultural production and consumption choices. Thus, the variety of cultural production and consumption comes into being. New cultural products emerge. This brings up a new subject that demands our attention: “symptomatology” in the sense of climatology. In cultural production and consumption, symptomatology refers to the birth of cultural products typical of a specific climate. For example, Errenzhuan, a song-and-dance duet popular in Northeast China, is a product of severe winters in the region. As the well-known Chinese comedian Zhao Benshan once explained, errenzhuan was born out of the harsh winters on this land of black soil. All forms of cultural economy reflect the level of cultural productive forces during a certain period of time. Based on the level of cultural productive forces, the development of the cultural economy can be divided into three stages, namely, the agricultural, industrial, and information stages. They depend on manual production, large-scale mechanical reproduction, and digitalized virtual creation. Measured by the modernization of their mode of production, the three stages can also be referred to as the precultural, modern, and postmodern periods. The intrinsic value of the cultural economy varies with space and time. This leads to differences between various forms of the cultural economy

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in reality, which can be seen in people’s attitudes and choices. The cultural economy of the agricultural stage conveys a wealth of historical information and resources, which are characterized by scarcity due to the dilution of time. Therefore, the cultural consumption of such scarcity becomes a behavior of an exalted nature. It is important to protect, develop, and utilize this form of cultural economy. In contrast, the development of the industrial cultural economy and the information cultural economy is directly embodied in the modernization of the cultural economy of a country or region, as well as its overall economic development and the optimization of its economic structure. The maximum use and development of these two forms of cultural economy, therefore, becomes an important task. A typical case would be the great efforts made to develop the cartoon and animation industry. The accumulation of cultural brands, seasons of theatrical performances, screening schedules of movies, time slots of TV broadcasts, and editions of books are all concepts of time directly related to the benefits generated through the cultural economy. People produce products in a certain space and time while also generating space and time themselves. At the same time, we use them to distinguish between different spaces and times to record and measure the relationship between people and these two elements. That is how the division of time into prehistory, ancient times, modern times, and the contemporary era, and of space into islands, lands, oceans, and mountains, and thereby territories and countries, came into being. Through the production and division of space and time, we have built a relationship with the two, manifested in the economic activities and outcomes of culture. All cultural products, therefore, have their ages and places of origin, based on which the relations between the cultural economy and space–time are established. In this way, all cultural products gain value, although that value may vary greatly. However, it is precisely the difference in value that justifies the cultural economics of space and time. The purpose of all divisions of space and time is to help better reproduce space and time. 2. The value of the cultural economy created by space and time The value of culture varies from person to person. A culture that is valuable to one individual can be worthless to others. There is no positive correlation between the time span of a certain culture and its value.

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Value is in the eyes of people today. It exists because people discover and recognize it and conduct transactions based on it, which means we can hold very diverse cultural values. Generally, the value of culture increases with time, while its tools depreciate over time. The more a cultural economy depends on modern scientific and technological means, the less valuable the investment in it will be over time. The two are negatively correlated. The art economy is the most typical economy in which time determines value. Age is of great significance in assessing the value of artworks and is, therefore, the basis of pricing. The value of a certain cultural economy may vary with the time period in which it is created, as does people’s subjective attitude toward it. Here, the technological advancements behind this economy are inversely related to its historical significance. To put in more concrete terms, a contemporary piece of fine porcelain is nothing compared with a crude piece of ancient painted pottery because the latter conveys historical information and value unmatched by the former. The spiritual satisfaction and pleasure obtained by people in the consumption—or appreciation—of ancient colored pottery is different from that in the consumption of contemporary porcelain art: One is the consumption of history, and the other of reality; one is the possession and consumption of scarcity and the other of abundance. The further back in history, the rarer the resources and information, and the greater the value. Simply put, works of art are valuable because of time. Physical products in general lose their value—value and use value— over time, whereas the value of cultural products increases over time. As time goes by, a rare piece of artwork or an earlier edition of a book becomes more valuable, contributing to a price jump; a physical object gains value not because of its material existence but because of its historical significance. An ordinary porcelain bowl from the Ming Dynasty, for example, becomes an antique because it was created in the Ming Dynasty. As a special symbol of time and measure of cultural value, the “Ming Dynasty” changes the nature of a common utensil: it is no longer a tool used for eating but an object for collection or investment. The change in its use value leads to a change in its value. A similar example would be pictorial posters from the 1930s and posters from the 1950s, 1960s, and 1970s. The term “antique” generalizes how people understand the value of the object of the economy of time. Therefore, in the regulations of the

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Chinese government on restricting scattered cultural relics from leaving the country, age is an important criterion. Cultural heritage is based on the concept of time. Among all the fruits of human labor and production, only culture gains value with the passage of time, and an average physical product is valuable only when it carries a special message of time and culture. In archaeological work, the scientific method of carbon-14 dating is used to identify the value of unearthed cultural relics. The more original and unique something is, the more temporal information it conveys, and the more valuable it will be. Similarly, there is a golden rule in the cultural economy: A thing is valued if it is rare. Out-of-print books, the only item extant, and the only existing copy are all such examples. Time is a risky factor. The relation between the length of the production cycle and the value of cultural products is uncertain, which leads to risks in the cultural economy. The longer the production cycle, or the investment cycle, the greater the potential risks. Generally, the length of the investment cycle is inversely proportional to the return, which means that a longer investment cycle results in a longer period of cost recovery and thereby slower generation of return. Therefore, it is particularly important to evaluate the cost and length of time of cultural product investment when developing the cultural economy. With the passage of time, cultural information continues to be consumed, lost, and annihilated, resulting in the scarcity of cultural products. Those that manage to survive become cultural heritage, sites, and remains. They are valuable because they retain information about people’s lives in the past. Be it material or spiritual, this information becomes part of our culture and “physical evidence” of where we come from and what our past looks. It helps us understand the origin of today’s human beings. People go to such places for sightseeing because of their historical value; in turn, the economic behavior and benefits thus generated become a measure of this value. Cultural relics, including ancient towns, cities, houses, and villages, are valuable because of time; meanwhile, they contain the products of people sifting through the sands of time, especially cultural products such as artworks, which can be passed down from generation to generation. A typical example is Dwelling in the Fuchun Mountains, a legendary landscape painting by Huang Gongwang from the Yuan Dynasty. All forms of cultural economy that attempt to mimic ancient times fall within the scope of the cultural economy of time. By

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recreating and re-expressing time itself, they reflect the value of history in today’s world. For some cultural heritage, scarcity does not equal economic value because such value is related to their distance from people’s lives. The value of intangible cultural heritage in our daily lives, in particular, is not equivalent to that of tangible cultural heritage. We compete for the inscription of our cultural heritage on UNESCO’s World Heritage List not for the sake of the heritage itself but the economic value of the heritage. A cultural heritage that is not scalable will not generate economic value, even if it is a world heritage significant to all of mankind. The Kunqu opera in China is a typical example. Since there is no incentive for social investment, it relies solely on government subsidies. However, it is quite another story for tangible cultural heritage: The Ancient City of Pingyao and the Great Wall, for instance. Such, it seems, is the fate of all intangible cultural heritage. Museums store time. They permanently preserve the carriers of past cultures and civilizations and show them to people so that, in the face of lost time, we can learn about history and ourselves. In this way, we express our attitude toward the lost time and communicate this attitude in the same space, thereby establishing respect and admiration for civilizations and cultures created in different periods of time. The economic value and benefits generated in this process cannot be measured solely by ticket proceeds or revenue from sales of replicas of museum collections, although they are both parts of the museum economy. More importantly, as a manifestation of the economics of time, museums have raised people’s awareness of the height that human civilization once achieved. Through this awareness, they have changed our views on civilization and history and thereby the concepts, manners, systems, and policies of communication and exchanges between different cultures and civilizations. Communication and exchanges serve as the most important mechanism for advancing human civilization and the most powerful engine of productivity in human society, with economic value that cannot be overestimated. All of this is facilitated by museums, the repository of human time. The sophistication of museums in a country or city indicates to some extent the development of its civilization and the breadth and depth of its social creativity. Today, it is difficult to imagine that a country or city without a museum could have cultural creativity, highly developed material productive forces, and economic prosperity.

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People create time, but the space to store it is limited. It is impossible to preserve all that is created, so we have carefully selected memories that are most worth keeping. In addition, we invented museums to store them. Here, time flows freely and stands still at the same time. People can wander through time and stop in a specific space to feel, understand, and appreciate the vastness of space contained in this frozen time. A cultural industrial park is a new form of a museum. It is an open museum that freezes time and transforms the function of space in a space built by time, a museum that showcases the space and time of a city as it evolves. Museums, in general, may not be related to the space and time of the cities in which they are located, but a cultural industrial park is without doubt the embodiment of a city’s space and time, including its urban culture and civilization and the newly emerged creative industries. It contains all the space and time that has been reproduced in the space shaped by the passing of time—the city itself included—thus reflecting the attitude of today’s city toward the past and its capability to recreate space. This is the creation of a new kind of urban museum and museum culture, which can be reproduced in any form of culture with space and time. The progressive evolution of civilization and culture is constantly updating the form of museums and human production associated with them. Every day of our lives embodies the value and significance of time, and every day, we are producing time. The most important product of our time is the cultural economy. The word “fashion”, meaning a style that is popular at a particular time, sums up everything about the cultural economics of time. 3. The significance of the cultural economy of (geographical and nongeographical) space There is no cultural economy without space. All cultural economic behavior, whether production, consumption, or circulation, can only be generated within a certain space. This is true even in the virtual cultural economy, including the cultural economy of the Internet. The space of the cultural economy can be divided into geographical space and cultural space. Geographical space is tangible physical space with a clear indication of cultural economic behavior, such as Hollywood, Broadway, Xintiandi (Shanghai), and the 798 Art Zone (Beijing); cultural

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space refers to intangible space, which is distinguished by the form of cultural products and transcends the geographical constraints on cultural economic behavior: the publishing economy, the performance economy, the film economy, and the Internet economy. The level of development of cultural productive forces—a combination of the forces of spiritual and material production—varies not only with time but also with space in the same period of time. The reason for the latter can be traced to the spatial structure of cultural productive forces, meaning the forces of cultural production in different areas—urban and rural areas, the east and the west, and the south and the north—progress at varying levels. This is especially evident in China. While Shanghai, Beijing, Hangzhou, and Guangdong Province are already developing into a “post-industrial society” or in the middle of “a second round of modernization”, the vast western region is still struggling to pivot from an agricultural society to an industrial one. This is determined by the level of productive forces in general and the degree of cultural modernization in different regions. In China, the overall level of cultural productive forces decreases from east to west, which means that the east is much more developed than the west and that the central region forms an intermediate zone with the characteristics of both. The vastness of the land and complexity of its geography—its terrain, landforms, environment, and climate—will have a profound impact on the level of cultural productive forces and the development of the cultural economy. The richness and diversity of a cultural economy rely on the scale and complexity of a country’s geographical space. It is difficult for a country with little space to produce a highly diverse culture. More than anything else, politics and religion are two nonphysical forces that can alter the cultural space. The status of the entities of cultural production, namely, their power of discourse, is the most critical factor that contributes to the different levels of cultural productive forces. Generally, entities with a stronger voice are at the higher end, while those subject to this voice remain at the lower end. As a result, the former will be able to maximize the value of their cultural economy.1

1 On January 16, 2013, the Organization for Economic Cooperation and Development (OECD) and the WTO jointly launched a new database to measure international trade. According to the calculation of “added-value trade” proposed by the database, China’s iPhone exports to the United States in 2009, which amounted to approximately 2 billion U.S. dollars as previously reported by the Asian Development Bank, were in fact only 73

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The spatial characteristics of the cultural economy lie in the spatiality of cultural production, consumption, and circulation. The spatiality of cultural production means that all cultural production activities take place within a certain space. The supply capacity and cultural influence of different places rest on their level of cultural productive forces, which leads to spatial differences in cultural consumption and circulation. The spatiality of cultural consumption means that certain cultural consumption behaviors can only occur in a certain place. Spatial conditions limit the degree to which cultural consumption demand can be met in this space and thereby restrict the scale of cultural consumption and its contribution to economic growth. The spatiality of cultural circulation refers to the flow of cultural commodities across space as a result of exchanges. In general, the speed and volume of such circulation are positively correlated with the cultural economic prosperity of a place, as they indicate not only the cultural production and consumption capacity of the place but also the level of its cultural services, the most important of which is its ability to collect and distribute cultural commodities. The spatial span of cultural production, consumption, and circulation depends on rich cultural resources and a mature cultural market, which is why cities and towns take the lead in this regard. Cultural resources refer to not only historical and cultural heritage but also, more importantly, the proportion of the cultural population, especially the innovative cultural population in terms of production and consumption. Thanks to their huge capacity for cultural production, consumption, and circulation, New York, Tokyo, London, and Paris are regarded as cultural centers of the world. Cultural production and consumption are excellent cultural resources. With its huge accumulative effect, the radiation of cultural energy often exceeds the space where it is located and reaches the entire world. Studies show that eighty-five percent of the world’s cultural consumer products come from these four cities. In China, the rise and fall of cultural centers all have to do with the shifting of cultural economic space. The value of culture is inseparable from the specific space it is measured in. The value of the same cultural commodity changes with target

million U.S. dollars. Add in the 121.5 million U.S. dollars in iPhone parts imported from the U.S. that year, and China actually ran a trade deficit of 48 million U.S. dollars with the U.S. Sources: “An ‘Apple’ that makes you think,” Xinhua News Agency, January 16, 2013; Xinhua Daily Telegraph, January 16, 2013.

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consumers in different places. For example, works of art that have no value or no significant value in one country or region will sometimes be valued or even highly valued in a different country or region. Apart from the increase in circulation cost, another important factor is the scarcity of this cultural commodity in other places. This phenomenon can be seen in the market behavior of stage performance arts as well as the circulation of artworks. The shifting of space results in the shortage of certain cultural commodities, which leads to supply deficiency and thereby the appreciation in value. In terms of space, the cultural economy can be divided into the urban and rural cultural economy, national cultural economy (as in international cultural trade), regional cultural economy (as opposed to the international cultural economy), and a global cultural economy based on different modes of production and circulation and market approaches. The urban cultural economy and the rural cultural economy are two widely different spatial forms and structures of the cultural economy divided by their mode of cultural production. Generally, traditional manual production is the main mode of production for the latter, while the former relies mostly on large-scale mechanical reproduction. The rural cultural economy refers to a system of cultural economic behavior, including the production, consumption, and circulation of cultural commodities, in the rural cultural market, with farmers playing a major role; the urban cultural economy is the production, consumption, and circulation of cultural commodities participated in by city residents in the urban cultural market. The cultural economy in cities is characterized by a pioneering spirit, while rural areas tend to be more conservative, which means that the rural cultural economy evolves relatively slowly compared to the fast-changing urban cultural economy. The latter, therefore, dominates cultural development and evolution. It has been playing a leading role since the beginning, as cities represent the advancement of civilization and productive forces. In practice, rural areas provide cities with cultural resources and strategic space for market expansion. Any change in the conditions of the rural cultural economy, therefore, will ripple out to its urban counterpart. For a country as large as China, the development of the rural cultural economy is especially important. In fact, this spatial cultural division of labor between the city and the countryside results from the evolution of our civilization and productive forces over time. With changes in the macroeconomy and social division of labor,

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there is a growing trend of integration between the two areas. Especially as the increasingly modernized rural economy integrates into the overall development of the urban economy, the cultural economy of the city has shifted in space and gained supplementary support from its rural equivalent. In addition, the traditional cultural economy that depends on manual production has also been rediscovered in the tidal wave of cultural and creative industries, giving it a certain sense of postmodernism. The urban cultural economy, on the other hand, began the reinvention of space amid globalization and the third industrial revolution. It is now moving onto the “land” of the Internet. A national cultural economy is one formed by a sovereign state. The factor of resources often contributes directly to the comparative advantage and spatial structure of the cultural economy of a country. Since the national cultural economy embodies the cultural sovereignty of a state, its spatial structure is bound to be restricted by the cultural system of the country. The openness of its market access mechanism reflects the country’s cultural economic sovereignty. However, as an important channel to increase and accumulate wealth, the cultural economy is of particular significance to the factors contributing to a nation’s wealth, including economic restructuring and modes of economic growth and development. Therefore, it is important that we continue to expand the proportion of our domestic cultural economy in the international market as a way to stay competitive on the racing track. The most important form of competition is through international cultural trade, which is also a manifestation of the cultural economics of space. The meaning of a regional cultural economy is twofold. One is a separate customs territory within the world economy, such as Taiwan and Hong Kong of China, or a regional cultural and economic space formed by neighboring countries and regions that are obviously complementary: Southeast Asia and the North American Free Trade Area (NAFTA), for example; the other is cultural economic space comprised of different regions with distinct economic complementarity within a sovereign state: The Yangtze River Delta and the Pearl River Delta in China are typical examples of regional cultural economy. The mechanism by which a regional cultural economy is built can be rather complex. For example, the regional cultural economy of Taiwan and Hong Kong of China was formed under a system born out of a special history; Southeast Asia and NAFTA are both political and economic communities; the formation of the Yangtze River Delta and the Pearl River Delta is directly related to

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their regional cultures: Wu-Yue culture and Lingnan culture, respectively. A common culture leads to political and economic ties that help forge a common cultural market. The global cultural economy is a concept of the cultural economy of space in a global sense. It involves cultural economic space beyond the state level, manifested in the barrier-free circulation of the cultural economy across the world. A typical example would be transnational cultural economic groups, a special global network of cultural economies. Apart from this, there is, of course, the global cultural economic system in the form of the WTO, composed of separate customs territories within the global economy. Finally, there is the cultural economy of the Internet, which is a new spatial economy characterized by its virtuality. Cultural space and spatial culture are two concepts that are distinct from and related to each other. Cultural space, a term used by UNESCO in advocating the protection of intangible cultural heritage, refers to the forms and patterns of the representative works of oral and intangible cultural heritage. In terms of its nature, cultural space must be a place of independent existence, or, in other words, a physical or geographical space. Spatial culture, on the other hand, describes a culture and its traits formed in a certain physical or geographical space. Local operas in China are a kind of spatial culture; they are different forms of expression that emerge from different places out of the understanding of the relationship between humanity and nature as well as between humanity and society in such places. The urban–rural culture is cultural space and spatial culture all in one. In different spatial cultures, people usually produce different cultural spaces, but they can also produce the same cultural space. When the cultural space thus produced develops into a place of living, it will also evolve into a kind of spatial culture for people. This is why different cultural expressions in cities and villages can be consumed by each other. The cultural economy of space contains the economic value and significance of the production of cultural space because once this kind of cultural space is produced and transformed into people’s lifestyle and spatial culture, the cultural economic value it generates will be extremely large. This is why the oral and intangible heritage of humanity is valuable to us today; otherwise, there would be no need to protect it. The cultural economics of space places more emphasis on the movement of spatial cultural productive forces and the evolution of the relations of spatial cultural production. The study of the cultural economy

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of space should focus on the allocation of resources in both tangible and intangible cultural space—namely, locations and cultural economic space, respectively—and the relationship between them. 4. Compression and expansion: the mechanism of driving forces behind the evolution of the cultural economy of space and time Space expands when compressed, and so does time. People produce time and create space; we establish a spatiotemporal order and, in this process, constantly deflect and compress space and time. The compression of space and time is the result of their expansion; there is no compression without expansion. The change in space and time is actually the change in the relationship between humanity and space–time. When we move from one society to another and build it as we understand and imagine it, “one day can feel like twenty years.” The compression and change of space and time are not a feature unique to postmodern society but a basic relation between humanity and space–time that has existed since the dawn of human society. From the day it was born, human society has been producing time and creating space; our relation to space and time was then established and has since been constantly evolving. Why are there still so many unsolved mysteries pertaining to the Mayan civilization, the ancient Egyptians and the ancient Chinese? This is because the relation between humanity and space–time in that particular space and time is currently unknown to us. We cannot, of course, crack the riddle of yesterday’s civilizations with today’s conception of space and time. One important reason why we can no longer create great cultural products that are truly exceptional today lies in the change in people’s view of space–time. It is impossible to step into the same river again now that space and time have changed. The problem is that people still use the past to measure the present and look at yesterday by today’s standards. The degree to which people have changed their value of space and time has become the measure of the value of cultural products. This is what we call the cultural economics of space and time: the measuring of the cultural economy. The cultural economy of space and time is formed in three ways: natural generation, social generation, and national generation. The natural formation is the initial force driving the generation of a space–time cultural economy and a decisive factor for the development

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of social productive forces and the progress of civilization. The differences in cultural production in various places, as well as its product forms and industrial structures, are a result of time. Some of today’s clusters of cultural industries are essentially the result of historical contingencies. The emergence of many creative industrial parks is related to the creative impulses of human beings. Such an endogenous driving force is, to some extent, biological. Culture is biological by nature, and as a result, the cultural economy is inherently biological, which means it is driven by impulsive demands. The social formation, a secondary force motivating production in the space–time cultural economy, is mainly manifested in the transformation of the production mode and production organization of a society’s cultural economy in the process of social transformation and economic restructuring. When a certain cluster of cultural industries comes into shape and represents a certain trend with clear potential for growth, the common desire for value and wealth will drive the generation of social collective behavior. Hence, the convergence of cultural products and the scaling-up of the cultural economy. The market then guides, encourages and allocates the commercial production of cultural products through price and value, which develop into cultural capital in the strict sense with its space and time. National generation refers to direct and active support from the government through the formulation of development strategies, industrial planning, and industrial policies for the cultural economy and cultural industries. Many industrial bases and parks of the cartoon and animation industry that were born across China between 2006 and 2008 fall into this category. The government is the chief “decision-maker” of formal systems, which are a special form of spatial structure reflecting the cultural rights and will of the state. The differences in space and time contribute to the costs and benefits of producing and exchanging cultural commodities. Temporality and spatiality are important conditions that constitute a transaction because distance incurs costs and time brings out value. In the cultural economy, it is manifested in the difference between the available benefits and the costs of moving tradable cultural commodities, including tariffs on cultural commodities and all relevant trade costs. For example, the cost of international commercial performance is different from that of the film trade. As an intangible cultural economy of space, the copyright economy is arguably the largest in scale with maximum economic benefits. In terms

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of time, however, there can be two types of copyright economies going in completely different directions. Space–time compression leads to space–time exchange and expansion. Time eliminates space, resulting in the compression of space and time, which in turn generates surplus space–time and expands into new space– time. Spatial cultural resources become the object of cultural consumption due to the change in time. The law of the conservation of matter and energy dictates that when one area is compressed, the other expands. As some industries become outdated and others upgrade, capital compresses space and time but expands the field of culture. Cultural and creative industrial parks have not only shaped a new form of the cultural economy but have also grown into a new force of space and time to save industrial civilization from extinction. They recreate time and space from the past, which is dislocated and integrated with the present through space–time expansion. As a result, the cultural economy possesses a particular charm of space and time lacking from other categories of the economy. The evolution of the cultural economy of space—its connotation and representation, core and periphery, and upstream and downstream—is driven by both space and time. The compression and expansion of space and time make up the structure of the movement of the cultural economy. The structural movement of the space–time cultural economy depends on the strength of these two power sources, which cause differences in the internal formation and external characteristics of this structure. Cultural and creative industrial parks freeze time by preserving memories of the city and reproduce space through the transformation of its function, thereby generating more time that constitutes the present moment or contemporary age. Space is limited, while time is infinite. To retain this infinite time, it is, therefore, necessary to recreate space and develop new cultural economies of space and time further down the road. The spatial concentration of the cultural economy relies on a mechanism different from that of the general spatial economy. The latter is determined by the costs of production and transportation from the place of production to the target market, which means location is key. While the cultural economy does emphasize location, its concentration depends more on the uniqueness of cultural products and the spatial distribution of consumers in the cultural market. With its unfavorable climate conditions, Dunhuang in the western province of Gansu shows little geographical advantage. It is, however, one of the places with the highest concentration of cultural and economic elements at any given time.

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As a large city, Shanghai was undoubtedly the cultural and economic center of China in the 1930s and 1940s. Whether in terms of the publishing economy, the film economy, the entertainment economy, or the performance economy, its cultural economy is concentrated to an extent that Nanjing—which is only a short distance away—cannot come close to, let alone Beijing. Looking back at the history of Beijing, but for its political status as the capital of the country, it would have made a meager contribution to culture. In other words, the cultural creation of Beijing is closely related to its position in space and time as a capital city, which is also why the cultural economy of Beijing is distributed as it is. The average businesses of the same kind, if clustered together, can share major infrastructure and therefore dilute costs; the concentration of similarly skilled workers encourages innovation and the spread of skills; it is easy for downstream firms to bargain with upstream suppliers if they act in groups. The advantage of spatial concentration for the cultural economy lies not in its homogeneity but in its diversity and its capability to cater to the various needs of cultural consumption of different groups. One of the biggest differences between the nature of Shanghai and that of Nanjing and Beijing is that it is a city of immigrants. Compared to these two cities, which are inhabited mostly by natives, Shanghai boasts a diverse population of permanent residents, a large mobile population, and an open attitude toward immigrants, which better enable it to generate different demands for cultural consumption. To satisfy such diversified demands, an equally diverse economy of cultural production is needed. A huge mechanism of absorption is thus formed, attracting manufacturers and suppliers from all over the country, and even the world, to Shanghai. Bringing with them different cultural products and cultural consumption services, they have helped shape a mechanism of cultural production and services for various forms of cultural economy. A large market demand leads to strong market absorption, which in turn generates great new spending power. In this process, the concentration of the cultural economy is constantly being compressed and expanded. With such a strong capability to absorb cultural consumption, the market has rapidly expanded the production capacity of the cultural economy and, as a result of its continuous supply of diversified cultural consumer products, has fascinated noncultural economies. This huge cultural market also provides market information and space for interpersonal communication that the transaction space of the real economy cannot, hence the influx of capital from various sectors of the

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real economy. Even the industrial and commercial capital of the town of Heshun in Tengchong, Yunnan Province, was engaged in industrial investment in Shanghai through the sea routes in Myitkyina, the capital of Kachin State in Northern Myanmar. To this day, we can still see in the homes of the people of Heshun pictures of industrial capitalists taken with “dancing girls” back when they were part of the culture scene in Shanghai. Through this, we can catch a glimpse of the concentration of the cultural economy in the city. Any division of the cultural economy is relative. Due to the imbalance of productive forces in general, cultural productive forces will not reach a higher level of development in a uniform and absolutely synchronized manner even in the same country. More often than not, different forms of cultural economy coexist in the same space and time, forming a diverse network where different spaces and times intertwine, the physical and virtual worlds complement each other, and the internal and external space is structured in the same way with multiple components. Different spaces and times intertwine. Why are artists always the first to move into abandoned warehouses, factories, and docks? Open space and low rent are of course appealing factors of production. However, more importantly, in such a space filled with historical information, there are “materials of time” necessary for artistic creation. In the process of communicating with the past, expressions about today are sought and found. Without certain space and time, imagination and association would be impossible. The inspiration for artistic creation can only be born in the interaction of space and time. In creative industrial parks, we are essentially engaged in today’s cultural and economic activities in the past. The dialogue between history and reality sparks ideas for artistic creation and other cultural activities as we catch a glimpse of what life used to be like. They are a type of cultural ecology, an ecosystem of the cultural economy of space and time that is highly concentrated in terms of energy. The concentration of cultural industries maximizes benefits by gathering as much market energy as possible in one place. With the help of the surrounding environment, it builds up its own energy and expands its room for value appreciation. This is why where similar shops flock together, the business does not decline because of vicious competition; instead, we see a continuous boom thanks to the Matthew effect—the cumulative advantage of economic capital. Hollywood and Broadway in the United States are both typical cases. A high degree of industrial concentration does not equal homogeneous development.

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The physical and virtual worlds complement each other. The cultural economy is part of the virtual economy. Its most typical form is the cultural economy of the Internet, which took shape in the modern age. However, when the cultural economy of human society was still in its infancy, the exchange of intangible value through tangible goods, which justified the cultural economy as a type of virtual economy, was already the most important cultural economic behavior. There is a four-character expression in Chinese, “mai du huan zhu,” which translates as keeping the glittering case and returning the pearls to the seller. What is being exchanged here is essentially the cultural and aesthetic value of the jewel case. It is because of the spiritual significance it conveys that the physical object itself can be exchanged, although a large number of cultural relics are auctioned and traded on the premise of its physical existence. With the emergence of copyright trading, the nature of the cultural economy has been defined by law as a virtual economy. The cultural economy in the physical form is primarily the manufacturing of cultural goods: the production of pianos and other musical instruments and the industrial system thus formed, for instance. It is consistent with other forms of the real economy in the way they evolve but serves a different purpose: satisfying the demand for spiritual and cultural products. The internal and external space of the cultural economy is structured in the same way with multiple components. The external space refers to the physical structure of the cultural economy, namely, the proportion of different forms of cultural economy. The internal space of the cultural economy is manifested in its social formation, which is the proportion of different economic components in the same form of cultural economy. One of the revolutionary achievements of cultural industry development and cultural restructuring is the reconstruction of the spatial structure and order of China’s cultural economy. As a result, the cultural economy gains new access to room for development and new economic forms with concentrated energy. The cultural economics of time is a science that studies the law of change of cultural economic value in the course of history. The cultural economics of space, on the other hand, looks at how the material expression of cultural economic value changes in form in the social process of the geographical environment. It manifests itself in both the external and internal space of the cultural economy. The external space refers primarily to external spatial relations with certain physical frames of reference, while the internal space is embodied in the internal composition of different

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forms of cultural economy. For example, the publishing economy and the film economy are two forms of cultural economy that are also highly correlated; the differences lie in their markets and the ways they produce value, not in their external characteristics. The cultural economics of space and time focuses on how the cultural economy works in four dimensions: in different space and time, in the same space and time, in the same time and different space, and in the same space and different time.

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Cultural Industry Development and Historical Geography

In the development of the cultural industry, the issue of historical geography refers to its historical and geographical predicaments caused by the tension between cultural industry development and historical geography. It includes at least three dimensions: the relationship between cultural industry development and history, the relationship between cultural industry development and geography, and the relationship between the cultural industry and historical geography. Broadly speaking, it involves the transformation of the natural and social environment, changes in the sequence of natural and social development, the reconstruction of the discourse of natural and social landscape, the deconstruction of the forces of natural and social resources, and so forth, caused by cultural industry development. 1. Cultural industry: the construction or deconstruction of history? The birth and development of any form of cultural industry is not possible without time. Emerging in certain times and spaces, has changed the internal and external social lifestyle and structure of a specific area, created new ones, and altered the history constructed in time, whether it is the content or form of history. The development of the cultural industry is related to history in at least three aspects: the past history itself, the creation of history, and the attitude toward history. The cultural industry is a product of history in both form and content. As an organic form of life, the cultural industry arises from the history of

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technology, the human spirit, and human expression. From the perspective of technological history, it is a form of productive force that extends to the field of cultural production. The process of forming such cultural productive forces has diversified their forms, thereby liberating the most essential elements in the composition of productive forces. As a product of human spiritual development, the cultural industry in its different forms has clearly recorded not only the spiritual outlook of people under various historical conditions but also the historical height reached by such spiritual development. The most typical case is the printing and publishing industry and its relation to how the capitalist spirit was formed and disseminated in Europe. The emergence of a certain form of cultural industry is a sign of the spiritual development of human beings in a certain historical stage. In this sense, the history of any cultural industry is a history of the human spirit because the birth of any form of cultural industry is accompanied by a major revolution of expression. Essentially a public statement of one’s understanding and opinions about the world, expression is free in nature. However, there is no such thing as true freedom of expression ever since human society entered a stage of class distinctions. On the one hand, to protect the interests of the class it represents, the ruling group of people must dominate and even control public opinion, rendering freedom of expression impossible. On the other hand, a class that governs material production is generally also in control of spiritual production, which is essentially the production of tools and carriers of expression. Unless the system is designed otherwise, the mechanism—or carrier—of freedom of expression will not change provided that the cultural productive forces remain unchanged. As a result, the ruled enjoyed no freedom of expression in the history of spiritual development. Freedom of expression is earned each time we liberate a cultural productive force and create new a carrier for the cultural industry. It is in this sense that Walter Benjamin discovered the value and significance of the cultural industry in realizing artistic democracy.2 When the Internet emerged and evolved into a new form of cultural industry, the history of freedom of expression was rewritten. People’s right to it entered a new era in the same way as when the cultural industry came into being. The history of the cultural industry is a history of human civilization. Without it, human society could not have developed into what it is today. In this

2 Walter Benjamin, The Work of Art in the Age of Mechanical Reproduction.

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sense, the cultural industry is essentially constructive but also deconstructive: it builds a new history of rationality while deconstructing the existing historical rationality. The cultural industry is a vehicle for major events and incidents in the course of history, as well as a driving force and tool for the development of human civilization. Here, the concept of cultural industry is of course viewed as an organic whole. The whole of the cultural industry, however, is in itself a historical concept, which means it takes on a different meaning at each stage of its development. The overall concept of cultural industry in the modern sense of the term is first embodied in the modern printing industry, followed by the modern book industry and the newspaper industry that emerged from it. Although printing was invented in China, it did not spark any revolutionary events in a modern sense in the course of Chinese history. However, it was a different story in Europe. The advent of movable-type printing and the invention of the Heidelberg printing machine quickly led to a revolution in the modern printing industry as well as the birth of the modern book industry and periodical industry. This coincided with the outbreak of the Protestant Reformation, in which the modern publishing industry was used by the bourgeois to push forward this religious movement. With the help of such a tool, they ultimately won the bourgeois revolution in Europe. It was during this process that the system of book and newspaper censorship came into being. The Lumière brothers invented cinema, ushering in the era of modern popular culture that made the democratization of art possible. In addition, the achievements of industrial civilization were directly applied to the recreation of cultural forms, namely, visual culture or the culture of images and videos. Thus, the age of cinema began. The emergence of films, however, does not mean that the film industry has taken shape, just as the birth of newspapers does not signify the formation of the modern newspaper industry. The true mark of a film industry that has taken shape lies in the formation of a film market complete with its competition and conflicts, from which spawn systems for film trade. For example, the film trade war between France and the United States is a landmark event in the history of world cinema. In this case, the conflict in the film market was manifested in not only the competition between different film companies in general but also the discovery of this emerging market by capital, prompted by the uncovering of the film market’s existing and potential scale and the huge profits that lie behind it. It was precisely because of

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this potentially huge wealth effect that an unprecedented new horizon has been opened for capital’s pursuit of profits. To divide up and compete for world markets and prevent the emergence of a monopoly, both governments were embroiled in this film trade war. The so-called quota system was born out of the need to protect the domestic film market and industry, especially capital groups and interest groups at home. It heralded a new era in the history of human civilization: the film industry. Unlike the censorship of books and newspapers by the Catholic Church, which is based mainly on ideological control, the quota system is about the construction of a trading system for cultural commodities; it is a new way to protect the country’s cultural industry and market of cultural products. The former strengthens religious and ideological control, while the latter increases market control through new trading rules. If censorship by the church is strikingly unfair and historically unjust, the quota system is clearly an attempt to establish fair trading rules based on the market. History turned a corner here and ushered in a new period in the development of the cultural industry and thereby human culture: the period of systematic trading. Since the beginning of modern times, global development has been almost dominated by Europe. The course of cultural and social development in modern Europe is reflected in the history of its modern cultural industry. Without such a specific carrier, it could be quite another story for cultural and social development in Europe; the continent may even be stuck in the Middle Ages. The exploitation of world markets by capital, as Marx said, has not only eliminated the limitations on various nations in the world but also given form to a kind of world literature.3 Here, Marx gained profound insight into the power of capital in transforming the world and, more importantly, discovered how the modern history of the world was constructed and how “world literature” played its indispensable role in the evolution of history. The so-called world literature here can be interpreted as a synonym for the cultural industry, which, in its brand-new form, has enabled the global circulation of cultural products, shaping an unprecedented global cultural landscape. This is also clearly shown in the cultural development in modern China. In the early days, films entered the country and experienced a similar course of development as they did in the United States. However,

3 Karl Marx and Friedrich Engels, The Communist Manifesto.

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it was not until an awareness of films was developed and the systems of film censorship and screen quotas were created that the film industry in China began to take control of its own development. Hu Jirong’s study of early films in Shanghai provides us with such a timetable4 : In June 1911 (third year of Qing emperor Xuantong’s reign), the Shanghai Autonomous Bureau introduced the Ordinance on Banning Cinemas and Theaters, including the article “no obscene films are allowed.” After the founding of the Republic of China, Shanghai City Hall— formerly the Shanghai Autonomous Bureau—continued to use the above ordinance, which can be regarded as an early prototype of film censorship in China. However, with little effect on film distribution, the ordinance did not amount to a real regulatory system. In the mid-1920s, the Board of Film Censors, a nongovernmental organization, was established in Jiangsu Province and began to censor films shown in Shanghai. Without support from administrative authorities, however, the actual results produced by the BFC were limited, since it could not enforce any rules on film distribution. Before the government of the Chinese Nationalist Party—also known as the Kuomintang (KMT)—came into power in 1927, film censorship in Shanghai had basically failed to achieve substantial or effective supervision. In 1928, the Shanghai Board of Film and Theater Censors (SBFTC), the city’s first local film censorship authority with coercive administrative power, was formed by the Department of Publicity for the local party branch of Shanghai Special Administrative City (SSAC). The SBFTC published the Rules on Film Censorship that came into effect on February 1, 1929. On September 12, 1929, the SSAC Film Censorship Committee was established (and renamed the Shanghai Film Censorship Committee on July 1 of the following year). Later, on October 4 and November 9, respectively, the Rules of the SSAC Film Censorship Committee and the Rules of the SSAC Film Censorship Committee on Censoring Films were promulgated, stipulating that their work was to inspect Chinese and foreign films imported and filmed in the city and to ban undesirable films.

4 Hu Jirong, “Taking Root and Spreading: A Study of Early Films in Shanghai from 1870 to 1937” (master’s thesis, The Chinese University of Hong Kong, 2007).

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On November 3, 1930, the KMT government formally introduced the Film Censorship Law, putting the power of film censorship in the hands of the central government. On February 25, 1931, on behalf of the central government, the National Film Censorship Committee (NFCC) was organized by the Ministry of the Interior and the Ministry of Education and began implementing a unified national system of film censorship. This marks the first time that the ruling authorities of China have come forward to regulate film distribution and signifies the formation of a preliminary Chinese film system with the coercive power and binding effect of the state. Since the establishment of the NFCC, from 1934 to the outbreak of the War of Resistance against Japanese Aggression in 1937, a total of 1696 films were inspected, of which 1256 were foreign films (accounting for 71.7% of the total); 37 films were banned (2.2% of the total), of which 30 were foreign films (81.1% of the total number of films banned); 182 were edited (10.7% of the total), of which 98 were foreign films (53.8% of the total number of films edited). Such censorship of films by Chinese authorities has deterred foreign producers, prompting American producers to reflect on their content. As argued by the Americanists, the original absurd notions about China and Chinese things reflected in American films began to be partially corrected as a result of the attention given by the Chinese government in the 1930s. By the mid-1930s, the American film industry was also consciously reviewing and reassessing the Chinese themes, settings, and characters it portrayed. This section of history is often overlooked in our studies. Through his research, Hu has not only restored this historical truth behind film censorship but also recovered a crucial and yet nearly forgotten piece of the puzzle of early cultural development in modern China: the initiative taken by the Chinese film industry or the declaration of sovereignty over it. This is film censoring, systematic film trading, and thereby systematic trading in the cultural industry in the Chinese way. In the early days, the majority of films in China were imported, as the Chinese film market was monopolized by Hollywood. The country was not yet capable of cultural exportation. However, this does not mean that its film industry was inactive in this regard. By creating a Chinese system of film censorship to protect the still fledgling national film industry, China has managed to secure a voice in the world market. This system, which was just as effective as the quota system, helped obtain the market space needed for the development of the emerging Chinese films by controlling the market

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share of foreign films, especially Hollywood films, in China, particularly in Shanghai. This is the historical context in which the Chinese film industry emerged. It marks the formation of a modern film censorship system in China and a market access system for its cultural industry. As a manifestation of state sovereignty in culture and systems, it also indicates that the Chinese cultural industry has regained its initiative. Films are a central element of the modern cultural industry. By taking initiative in developing its film industry, China has changed the trajectory of its history and achieved historical progress by ending the monopoly of the domestic market by Western films represented by those produced in Hollywood. Thus, the era of the modern Chinese film industry commenced. Here, with the advent of a modern trading system of cultural products, cultural development in China reached its turning point. The formation of the cultural industry as a whole is a process of historical evolution. To this day, no one can say that it is fully developed; one can only talk about the current state of its development. The evolution of the cultural industry depends on the specific needs at each historical stage and people’s cultural discoveries and cultural needs that emerge in this process. The concept of the cultural industry itself reveals the historical process of its constant growth. This includes its own evolution and how such evolution, as part of the evolution of humanity and society, represents, passes down, and creates history, reflecting the development of history itself in phases. Since the beginning of modern times, the historical trajectory of the spatial movement of China’s cultural industry has basically followed the roadmap of the modern development of cities, the principal space where cultural industries are concentrated. The War of Resistance against Japan altered the route to market for China’s cultural industry, but as soon as the war ended, the original pattern of movement was quickly restored. The systematic migration of cultural industries took place after the founding of the PRC in 1949. The relocation of the Zhonghua Book Company and the Commercial Press to the north, for example, is the most significant event in China’s book publishing industry. The construction of the cultural industry is an ongoing process and therefore must be examined in its historical context. 2. Cultural industry: the consumption or production of history? All the contemporary forms of cultural industry are built around the production and consumption of cultural products, the key element of this

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industry. Without it, there would be no cultural industry to begin with. Since all cultural production is essentially the production of content, it inevitably conveys the attitude of the entities of cultural production in their current capacity toward history: Are they consuming or producing history? When a text becomes a kind of historical existence or an important part of history, any historical attitude toward it will directly affect the rationality and legitimacy of the existence of the historical archetype formed by such a text. This is especially true if this text presents a certain traditional national culture and the spiritual history of its people in a historical sense and acquires value as a cultural resource and spiritual symbol. Any construction or deconstruction of this text will have a direct impact on the property of value of this cultural resource and the subversion or inheritance of the cultural mentality of a nation. Using historical and cultural resources to produce contemporary cultural consumer goods is one of the most important production mechanisms for today’s cultural industry. As a result, adaptation, rewriting, and playful interpretation have become important modes of cultural production. Given the inertia of history, many debates on this issue in the past have been confined to the realm of ideology. However, when The Murder Case Caused by a Steamed Bun, a spoof on the film The Promise directed by Chen Kaige, aroused great anger, we had actually already turned a blind eye to many parodies of our historical memories. What appears to be a spoof on a work or a person, such as the spoof on Yang Zirong— a heroic figure who suppressed bandits in Northeast China and died a martyr in 1947—in the TV series Tracks in the Snow Forest or the parody of the literary classic Journey to the West by A Chinese Odyssey, a 1995 fantasy-comedy film starring Stephen Chow, are actually humorous imitations of the pieces of history that make up our memories of the past. Our understanding of history formed in the course of it and our inner world constructed from such an understanding are deconstructed by these parodies. This kind of spoof deconstructs the history of ourselves and the reason we are what we are, for that which is part of our own history is what affirms the full rationality and legitimacy of our present existence. This is why in Germany, people disapprove of poking fun at Hitler,5 and

5 “Parodies of Hitler Upsets the German people,” Reference News, January 13, 2007.

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no one is allowed to parody Mahatma Gandhi in India.6 History turned upside down should be reversed back to what it truly is. This is an attitude of a completely different nature from that of a spoof on history. The former serves to restore historical justice, while the latter undermines such justice. There is no way for a country or nation to restore historical justice by spoofing history. It is in this sense that the history of cultural industry development deserves our serious attention. Meanwhile, it is precisely because of our misunderstanding of this issue that the development of the cultural industry today has eliminated all legitimacy and rationality of the existence of historical geography through mass production, resulting in conflicts and tensions between cultural industry development and the space–time of historical geography. On the one hand, we spare no expense to erect cultural industrial parks and create a new archaistic landscape in the name of driving cultural industry development through major projects; on the other hand, for the sake of urbanization and cultural industry development, we are willing to destroy historic districts and former residences of celebrities of great cultural value. In this process, history is falsified, and the landscape of historical expression is devoid of its geographical features; as a result, history and geography are reduced to lifeless objects. It was on this relationship between the cultural industry and people’s spiritual creation that the Frankfurt School based its criticism of the “culture industry”—that popular culture is a factory producing standardized goods to pacify the populace—and constructed the critical social theory. From the perspective of the history of human spirit, especially the history of artistic and spiritual creation, a major issue is raised: Is the cultural industry producing or consuming history? If it is consuming history, in what way should that be? Here, the so-called consumption of history is twofold. First, we increase our knowledge by an extract spiritual pleasure from reading, listening to, and viewing historical expressions in written, oral, and visual forms; in this process, we perceive history and improve our way of being. Second, we retailor and recombine any form of history for some utilitarian purposes—political and economic—and create a history different from what is being expressed. Instead of treating history as it is, we consume history for our own purpose while deconstructing and dissolving

6 “Video Spoof on Gandhi Riles India,” Xinhua Daily Telegraph, January 15, 2007.

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the authenticity of history itself. As a result, history is fragmented and runs counter to its fundamental truth. Most of the history we see today is made up of texts, material and immaterial. We will not have access to history without the specific text form, which is the material expression of history. Texts depict a history of culture and literature as well as of spirit and aesthetic phenomena. They are the manifestation of social progress in human civilization. If we cannot recognize the historical rationality of this approach and its irreplaceability in forming the cultural psychology and spiritual process of a nation, what, then, is the historical rationality of adaptation in the sense of deconstruction or subversion today? This raises another question: Is history capable of being deconstructed? If so, what kind of history can be deconstructed? The deconstruction of history is certainly not an end, and there may be an infinite number of ends. A basic purpose is to reconstruct history. However, are we trying to restore it or create a new one? If we are trying to restore history, what kind of history should be restored? Is the history we restore the way it was supposed to be? As an object to be defined, the history that we see, read, and express today is seen and written by every individual. It is but a very small part of the entire history, from which our view of history is formed. To a certain extent, human civilization is indeed developing and evolving in constant self-negation. In the course of its evolution, it is impossible for human civilization to achieve a great creative leap unless it is brave enough to deny itself. Positive negation, therefore, becomes an irreplaceable driving force. The development of the form of human society is without doubt a prime example. However, there is a fundamental historical premise here: Such self-negation should be able to propel history forward. In other words, if we cannot promote the progress of social civilization without negating certain spiritual existence reflected in texts, this spiritual existence becomes an obstacle to historical development, and deconstructing or subverting its rationality and legitimacy becomes an inevitable requirement for historical development. Does the spirit embodied in the “red classics” or “A Dream of Red Mansions ”, for example, constitute a force that hinders social progress? As a specific form of cultural industry, cultural products are always related to history. History is used, represented, recorded, expressed, and created through cultural products. The perspective and sense of history in cultural industry development lies in its consumption of history that serves a purpose. The consumption of history is the eternal theme of

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almost all blockbusters. However, in the process of consuming history, blockbusters are reshaping and even rewriting history, rearranging it according to their own understanding and need to gain historical legitimacy for their actions. On August 1, 2004, The Independent published a feature story in which the director of English Heritage accused Hollywood of falsifying history.7 When history becomes the object of consumption through cultural products, and thereby cultural industries, it matters who should be the one to relate history and how it should be related. Should we restore the truth of history, present our own history, or recreate history? What kind of international image should we let the people see? Who is consuming history? Who is making history? As the “angel of history” flies into the future, are we seeing history as it is or consuming history as we want? In other words, the cultural industry should not be a machine that consumes history or cultural resources but one that creates history and regenerates cultural resources. 3. Cultural industry: the construction of geographical symbols and the migration of cultural habits The cultural industry produces and constructs history in a certain geographical space. Since any form of cultural industry is the result of cultural production practice and the development of social and cultural productive forces in a particular geographical environment, cultural industries are not without their geographical indications in the process of natural evolution. This is especially the case for those relying on or drawing support from geographical and natural conditions and finding cultural expression mainly in landscapes. They have exerted a profound influence on changes in geographical space and features. At the present stage, the general strategic plan for developing cultural industries in China is, in essence, to deconstruct the human ecological environment of the geographical space on which people and society depend and reorganize the geo-ecological chain. The new geographical landscape created through the cultural industry has not only changed the visual symbols in people’s cultural life and the storage of visual space in time but also led to

7 “British Experts Accuse Hollywood of Falsifying History,” Reference News, August 12, 2004.

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the migration of people’s living habits and cultural habits within a certain geographical area. The Great World Amusement Park, a variety of entertainment venue in Shanghai, is the most iconic representation of modern entertainment in China. Similar to other scenic entertainment places such as Disney, the Great World changes people’s behavior and habits within the space upon its completion. On every red-letter day, local residents would visit such a “Great World” and “party” as if to perform a grand ritual. Otherwise, it would seem that life has lost some meaning. Over time, such activity develops into a habit, a collective unconsciousness, which I refer to as a seasonal or periodic habit. Like all other biological creatures, humans have habits. However, as social animals, they form their habits in society. As a result, these habits acquire distinct regional cultural characteristics, which means they are typical of a certain historical period and geographical space. The difference lies only in the choice of a specific date, for example, a particular holiday. Such an activity becomes an important part of people’s social life and a marker of identity. It constitutes a way of living, a confirmation of the rationality of living in a particular space such as Shanghai. Otherwise, you are not Shanghainese. Looking at the development of Shanghai in the twentieth century, there was no better embodiment of the cultural habits of its people than “having fun in the Great World”, a place that records half of Shanghai’s history. This is true for outsiders as well as the natives of Shanghai. For a long time, by whatever means of transportation and for whatever purposes, whether to visit friends and relatives, on business, or for meetings, a trip to Shanghai without visiting the Great World would be considered a trip in vain. It was almost like a pilgrimage, as is the case with Beijing and Tian’anmen Square, although the two differ in the form and discourse of landscape. Judging whether one has ever been to Shanghai by a visit to the Great World is also driven by a social biological habit, the formation of which is based on the value and significance of the Great World as a special geographical landscape. In those bygone days, the place symbolized an experience of modernity, a sign of walking across the pier and seeing the world. For local Shanghainese, it was a confirmation of cultural identity that they were constantly flaunting and that must be repeated to reinforce its “religious sense.” On the face of it, it was merely mass entertainment and temple fair-style festivity, but while creating this never-ending scene of cultural living in old Shanghai, it shaped the unique spatial behavior of Shanghainese in such a time and their biological habits in such a

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geographical environment. In addition, it had been constantly reinventing the lifestyle and attitude to life of the people in Shanghai, which is why the Great World, or “having fun in the Great World,” was used by them as a typical and universal expression. As a geographical symbol of the city, the Great World has not shifted location for a century, but the cultural landscape formed during this period keeps changing. Such changes are a microcosm of the changes in the city itself and its culture and the epitome of the cultural and biological habits of its people. The Great World is an urban landscape and geographical symbol that best represents the cultural entertainment industry since the beginning of modern times. It encapsulates the history of Shanghai’s cultural development, especially its modern entertainment industry, which is iconic in China. Dafen Village in Shenzhen was originally a small and remote village with an area of only 0.4 square kilometers and more than three hundred native villagers. For a long time, its production and social structure were dominated by farming. In 1989, a Hong Kong art dealer brought the business of oil painting processing, collecting, and reselling to the village, transforming it into Dafen Oil Painting Village that features the “threeplus-one” trading mix (processing with supplied materials, assembling with supplied parts, and processing with supplied samples, plus compensation trades). The processing of oil painting products has developed into a cultural industry that reaches deep into the social development of the village and the lives of its residents by lifting them out of poverty and transforming its pattern of economic growth and development. In addition, it has brought tremendous changes to the entire social ecological structure of Dafen Village. Almost overnight, rental housing put an end to the long-standing farming habits and production methods of its people. The newfound wealth has altered the living habits of villagers as rent payments become their main source of income. Enhanced by this new spatial function and way of living, Dafen has not only shifted its course of development but also redefined its functional characteristics and discourse of landscape. Space and time converged and were compressed in the place, rewriting the historical geography of Dafen. In this process, the village and its people experienced cultural industrialization. However, the very cultural industry that brought prosperity to Dafen may also cause its decay, just as the city of Detroit thrived on and was then crippled by the automobile industry, and the coal industry alone contributed to the rise and fall of the city of Fuxin in Liaoning Province. What kind of a scene will we be left with once the market factors supporting the rise of

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Dafen Oil Painting Village cease to exist? What kind of space should the villagers seek to survive and thrive and adapt to their new cultural habits? We dare not imagine. The transformation of regional spatial functions as a result of industrial transfer will have great geographical implications, but the ensuing migration of people’s cultural habits may induce even more severe issues. This is because, in modern China, any historical and geographical problem is likely to affect social development and stability. While vigorously developing the cultural industry and actively building cultural industrial parks, we should ensure the coordinated and sustainable development of the cultural industry and historical geography as well as historical and geographical justice. We should achieve justice not just for the present generation but also for multiple generations to come.8 This is a strategic issue that must be taken seriously in the current and future development of China’s cultural industry. 4. Cultural industry: landscape transformation and reinvention and cultural identity Transforming and reinventing the landscape is one of the most important trends in the recent development of China’s cultural industry. Typical examples include Song Cheng theme park in Hangzhou and Hengdian World Studio in Yiwu of Zhejiang Province. At the present stage, parlaying cultural resources into an advantage for the cultural industry has become one of the basic models and guiding values in China. (The National Film and Television Industry Pilot Zone in Yiwu is a counterexample: It was built due to the lack of resources.) A landscape is a very complex cultural product of thought. In different historical stages and periods of social development, people create various cultural landscapes to convey certain ideals and pursuits and express certain wishes for life, such as to pray for good fortune or to ward off bad luck. Landscapes, therefore, are created out of the need for spiritual appeal and sustenance. Even the simplest and most essential structure of a “house” is built for a sense of belonging through the iconic landscape 8 Deng Zhenglai’s theory of “justice for one generation” and “multigenerational justice” is a further extension of John Rawls’s theory of “intergenerational justice,” and a very important concept for thinking about the development strategy of China’s cultural industry. Source: “Globalization and the ‘Knowledge Transformation’ of China’s Social Sciences,” Wenhui Daily, August 9, 2009.

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of a “home.” Different landscapes convey different psychological meanings and objectify different world views.9 While the visual symbols of landscapes may be fundamentally different, they reflect the same psychological structure and pattern of thought. For example, Mao Zedong and Buddha Shakyamuni are worshiped by people; they differ in terms of their symbolic image, but the psychological and spiritual significance placed on them could be exactly the same. This is why there are “sacred mountains” and “holy water.” In essence, the creation of a landscape is not to build a system of symbols but to shape the psychological structure of people, which is the most basic and core element of cultural identity. Cultural identity is embodied by common cultural symbols in which our spirit and soul can find sustenance. Take Yan Di and Huang Di as examples. Although no one has ever seen these two legendary rulers of remote antiquity, they constitute a fundamental element in our mental structure, as we strongly identify ourselves as their descendants. These two figures were carefully crafted and are still accepted by people as a symbol of the landscape. For this reason, the rituals of visiting the mausoleum of an important person and worshiping our ancestors are adopted by Chinese people across the Taiwan Strait and all over the world. The formation and significance of a past landscape mirror the society inhabited and created by people at that time, along with the cultural traits of that society. It is cultural memories about these traits that make them last. This continuity makes it possible for people who used to live in the space that stores such a spatiotemporal memory of landscape to find their way home. As early as 1870, the landscape was figuratively described as people’s conception of the country in which they live.10 It is in this sense that it becomes a symbol of cultural identity. Disney is considered a paradigm of the American cultural industry. In fact, it is by no means just a tourism and entertainment project that can be replicated or a business model for cultural industry development. It was created from the beginning in pursuit of an American dream and is said to be capable of inventing history and nurturing nostalgia for a certain mysterious past, with the aim of perpetuating the culture of commodity

9 Guy Debord, Commentaires sur la Société du Spectacle, trans. Liang Hong (Nanning: Guangxi Normal University Press, 2007), 4. 10 Alan R. H. Baker, Geography and History, trans. Que Weimin (Beijing: The Commercial Press, 2008), 111.

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fetishism rather than criticizing it (qtd. in Hendricus Sneevliet).11 American values and lifestyles are deeply embedded in all the attractions of Disney, a spatial utopia. Such an American dream includes some of our common childhood aspirations, albeit with different content and in various forms. Today, however, whether in terms of the landscape discourse formed by its image or as a marker of American ideology, Disney has become a symbol of American cultural hegemony. Reengineered in any place outside the United States, it will unquestionably deconstruct the existing landscape discourse of the area and its history and culture. This is because Disney has become a symbol of the American spirit and cultural identity. It not only encapsulates and interprets American history from a psychological perspective but also creates and recreates the psychological history of people with American content. What’s brilliant about the strategy of the American cultural industry is how recognition of the American culture is established and great commercial value is obtained through the construction of Disney’s landscape. A long history of geographical changes has resulted in a special mosaic of social ecological environments and lifestyles. It manifests itself as a landscape when presented intuitively in the visual sense. When reflected in people’s mental and psychological experiences, however, it finds expression in the inner vision of our behavior pattern, laying the fundamental psychological basis for people to develop a sense of cultural identity through landscape identification. This is because such a geographical mosaic is the product of various types of human behavior that have deepened over time.12 As a mode of spatial mass production, the development of the cultural industry deconstructs and constructs the cultural identity embedded in people’s psychological structure rather than the visual cultural landscape in a general sense. This requires us to take a prudent and historical attitude toward the development of cultural industries, the selection of relevant projects, and the construction of cultural industrial parks and other projects that are related to historical geography or the spiritual and psychological structure and cultural identity contained in historical geography. In this sense, any changes made to the

11 David Harvey, Spaces of Hope, trans. Hu Daping (Nanjing: Nanjing University Press, 2006), 161–162. 12 Harvey, Spaces of Hope, 78.

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existing geographical features, and thereby landscape images and landscape systems, of a certain space will shift the historical and geographical significance of architecture in the space and reshape people’s psychological structure, cultural identification, and the mechanism of identification. Every mature nation has its own symbolic landscape. They are part of the national image and of the intersection of thoughts, skills, and emotions that hold a nation together.13 Each region of a country has its own signature landscape images. Therefore, a landscape is not a random pile of building materials but is shaped by thoughts and ideas. The proper understanding of landscape must be based on the historical representation of ideology.14 The purpose of sealing a mountain pass lies not in the mountain itself but the people who live nearby. As a result, when creating a landscape or developing any cultural industry project, especially large-scale amusement facilities and tourist projects, and others characterized by visual symbols, it is necessary to consider the relationship between it and the psychological structure of people residing around the project location. Meanwhile, the design, development, and construction of such a cultural landscape should be based on its consistency with people’s psychological structure. As a historical product generated over a long period of time, psychological structure manifests our cultural identity in the form of residence (buildings). Therefore, cultural landscapes should be designed, developed, and built with the same structure as that of our mentality of cultural identity. Projects that fail to follow this rule will more than often fall through. However, such failure is typical of the development of theme parks in China for the past thirty years and the primary reason for our largely unsuccessful theme park industry.15 When great historic sites are reduced to playgrounds, they lose their core values.16 Thus, the conception of a landscape is not merely a reflection or mitigation of more pressing social, economic, or political issues but often a strong pattern embraced in our knowledge and 13 Baker, Geography and History, 157. 14 Baker, Geography and History, 144. 15 According to a survey by China Culture Daily, 150 billion yuan had been invested

in 2500 theme parks across the country by 2008, of which seventy percent had been losing money and only ten percent had been making a profit. Source: “Theme Parks: An Inviting Cake or Commercial Poison?” China Culture Daily, August 17, 2009. 16 Yu Qiuyu, “Pondering at the Foot of Bagong Mountain,” Jiefang Daily, July 10, 2009.

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by society. From engineering to political economy, discourse and practice of all kinds pervade many images. Artists do not place all discourse and practice in the landscape conception. Instead, they are often activated or introduced through various backgrounds, in which images are displayed, reproduced, and discussed (qtd. in Baker).17 The potential energy of a landscape as a national feature18 has given it an irreplaceable symbolic role. The Yangtze River, the Great Wall, Mount Tai, the Yellow River, and Tian’anmen Square have become cultural icons and national symbols of today’s China. The fundamental reason for this lies in the consistency between such landscapes and the common psychological structure of the Chinese nation, without which the country would not be what it is today. There are two concepts involved here: consumption identity and value identity. Consumption identity has nothing to do with a person’s identity, while value identity conveys the attributes of a person’s identity. A foreigner who likes drinking Longjing tea and watching Shaoxing opera may not identify with Chinese values, even if they have been living in the local cultural environment for a long time and possesses an intimate knowledge of Chinese culture. John Leighton Stuart is a case in point. However, as a consumer, he has consumption preferences, which constitute his consumption identity. Value identity, on the other hand, addresses the question of who I am. It concerns one’s ultimate concern. For example, when one person goes to the church and another goes to a Buddhist temple, they express different identities and values through their relationship with the landscape, although they share something in common: the so-called universal values. This is what Stuart had strived for but failed. Therefore, in the development of China’s cultural industry today, consumption identity and value identity should be organically integrated into the design and construction of cultural landscapes. Guided by our value identity, we should integrate consumption identity into it and thereby establish justice in the cultural industry, namely, justice of the people, the nation, and the country. It is for this reason that the introduction of Disney projects contradicts the national strategic goal of the development of cultural industries, which is to build a common spiritual homeland for the Chinese nation. Similarly, our cultural soft power cannot be strengthened through the introduction of such projects.

17 Baker, Geography and History, 146. 18 Baker, Geography and History, 157.

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Cultural identification through landscape is in violation of justice in the cultural industry. 5. A profound historical and geographical revolution: cultural industry development across regions and sectors Any form of cultural industry is a vehicle for producing, spreading, expressing, and shaping culture. People are not satisfied with the degree of cultural freedom and cultural diversity in general. This is not only because human beings, as social beings, possess the innate desire and ability to shape themselves but also because any form of cultural industry, once created, will be quickly turned into an alien force. The cultural industry is capable of dismantling and deconstructing cultural traditions, which are both progressive and subversive. The latter is an unacceptable challenge to the already dominant ideology. Emerging cultural industries are therefore destined to guide their own development in a direction that favors the ruling ideology through institutional design and arrangement. Thus, they have evolved from a new way of expressing freedom to a form of control over the ideology and spiritual life of the majority by the minority. This control is also double-edged, as it intends to create a new cultural framework that combines multiple purposes of the subject while dismantling and deconstructing the arbitrary overflow of expression with anarchist characteristics. This leads us to the historical and ahistorical movement of the cultural industry. However, it is in this movement that the relationships between people and the cultural industry, between society and the cultural industry, and between the government and the cultural industry are fully presented. The application of scientific and technological achievements in the production, dissemination, and expression of culture has shaped a new cultural form. The emergence of such a new cultural form has transformed the existing cultural ecological environment and structure of society, dismantling and deconstructing the traditional social ecology in a spiritual sense. Therefore, the dominant forces of society should, on the one hand, give full play to the role of new forms of cultural industry in creating social wealth and promoting social progress and, on the other hand, prevent the state, society, and individuals from falling into a disordered spiritual state, which will result in the chaotic structure of social life. Inevitably, they will try to restore social order, including social spiritual order, and manage and control this

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new culture by establishing new systems and norms to ensure the orderly progress of the state and society. Any historical retrogression in this matter is not in their interest. Mergers, acquisitions, and reorganizations across regions, sectors, and industries are some of the most important strategies proposed in recent years for the future development of China’s cultural industry. As a profound geographical readjustment of policies, cross-regional mergers, acquisitions, and reorganizations will quickly lead to a redivision of geographical space in the cultural industry. It will be a profound revolution of historical geography where industrial forces rapidly spread from one geographical space to another and regather momentum, resulting in unprecedented changes in geographical distribution in the cultural industry. Clustered and reorganized on a large scale, the industry is also subject to massive evaporation because this is not just a general reorganization of cultural industry space. Such a reorganization is deeply connected to the original allocation of cultural power and cultural rights and thereby the spatial politics of the cultural industry. In other words, it is the reorganization and reproduction of cultural power and cultural rights in another geographical space. Behind whatever opposition thus aroused, a deep crisis of geographical distribution may be brewing in the cultural industry. In short, the formulation of cultural industry policies leads to the reproduction of not only geographical space for mass production but also geographical relations of production in the industry. The cultural industry is a ubiquitous force in modern society. It plays a major role in shaping historical and geographical heritage, forms of culture, and people’s particular lifestyles, which, once formed, creates a cultural ecological environment that affects the psychological structure of people and their behavioral patterns under the control of such psychology. The production of space and time in the cultural industry, therefore, will cause not only changes in a certain historical and geographical heritage at present but, more importantly, the deconstruction and reconstruction of people’s psychological structure that is built on it. This is how cultural industry development is endowed with the significance of historical geography beyond its own definition. Different choices are made in different geographical spaces, exacerbating the already unbalanced regional development of cultural industries. Tracing back to its origin, its development across regions, sectors, and industries has long been overdue. However, since the long-standing allocation of cultural power and cultural rights based on administrative divisions and levels—which

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involves major interests—has been institutionalized, the proposition of cross-regional, cross-sector, and cross-industry development in fact challenges people’s values and interests and their psychological structure formed on this basis. Institutional inertia is an extremely formidable force. It is not easy to establish a system, but it is even harder to subvert it. As the ongoing cultural restructuring gathers momentum, everyone is striving to be bigger and stronger through mergers, acquisitions, and reorganizations across regions, sectors, and industries, with the ultimate goal of building “the first mega-corporation” in the cultural industry. However, no one wishes to be taken over, since there are vital interests and ideologies at stake. This is an issue formed in the process of administrative allocation of cultural power. For such cross-regional, cross-sector, and cross-industry development to happen, revolution is needed both inside and outside the system. Cultural restructuring, therefore, should address all aspects of China’s cultural industry. Institutional arrangements of the past have denied social capital the right to participate in the cultural industry, resulting in imbalances and inequalities. To restore proper historical and geographical distribution in cultural industry development, it is necessary to establish a new strategic theory and concept of “cultural industry justice.” This justice will then be translated into “historical and geographical justice,” which, in turn, helps bring back cultural industry justice in the country and develop a new strategic perspective on the development of cultural industries.

3 New Urbanization: Reestablishing the Spatial Order of Cultural Industry Development in China Urbanization is the only way to modernize. For China, it is a critical path to overcoming problems facing agriculture, rural areas, and farmers, strong support for coordinated regional development, and an important starting point for expanding domestic demand and promoting industrial upgrading. To a large extent, the solution to many problems in China depends on changing the urban–rural dichotomy. The curtain was officially drawn on social reform in China when Xinhua News Agency released the National New Urbanization Plan (2014–2020) issued by the CPC Central Committee and the State Council on March 16, 2014. A new path of urbanization with Chinese characteristics should be blazed that puts people first, synchronizes the four modernizations (modernization of agriculture, industry, national defense, and science and

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technology), optimizes the distribution of resources, promotes ecological progress, and promotes cultural inheritance. It is of great practical and far-reaching historical significance for building a moderately prosperous society in all respects and accelerating socialist modernization. It will be a critical historic transformation in the development of China’s cultural industry. 1. New urbanization is a new process of cultural spatial development Cultural industry development has become a national development strategy in today’s China. One important historical and realistic reason behind this is the great challenge and opportunity of the transition of human civilization in the context of economic and social transformation and globalization. The aim is to resolve problems in China’s development strategy and modernize its system and capacity for governance. China is undergoing great transformation and development from a traditional agricultural society to modern industrial society. The current primary stage of socialism and the serious imbalance between the east and the west has given the structure of cultural industry developed its own typical characteristics. At present, the basic structure of China’s cultural industry is composed of traditional cultural industries based on agricultural civilization and handmade products, modern cultural industries based on industrial civilization and large-scale machine reproduction, and emerging cultural industries based on digital technology and the Internet. This system is basically consistent with the level of economic and social development in eastern, central, and western China, reflecting the current structure of Chinese society and social productive forces. The relation between humanity and nature lies basically in our relationship with the earth. It is the foundation of all our relations. The cultural industry is the sum of all cultural relations between humanity and nature and between humanity and society. The shift from a peoplenature relation to a people–society relation restricts the capacity for the expanded reproduction of social productive forces and the supply capacity of social capital needed for such expanded reproduction. These two constraints leave the market underdeveloped, demand unsatisfied, and the government burdened with excessive responsibilities. China is an agricultural country with a large rural population. The disposable income of

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farmers, however, has remained low for quite some time, which means that while maintaining a life with just enough food and clothing, they do not have the purchasing power needed to satisfy the basic cultural consumption demand. This underdeveloped rural cultural market has been a serious drawback to the scaling up of China’s cultural market and cultural industry. As a result, their huge potential remains untapped. To unlock this enormous potential, we must first release the huge demand behind it. Unprecedented strategic opportunities have been created for such a release by the momentous process of reform and opening-up over the past three decades. In addition, the newly formulated urbanization strategy has undoubtedly laid an institutional foundation for a sustainable release of potential. The urban–rural dichotomy constitutes China’s basic social structure, manifested in the social lifestyles of the people and, more importantly, in the organization of our social life and social management and governance. To a large extent, the allocation of all national resources, including material and spiritual means of production, is built on this dual structure. However, since the definition of “spiritual means of production” is much more complex than “material means of production,” the elimination of the urban–rural dichotomy has always been a common goal for the government and society. For a long time, the allocation of national resources, spiritual and cultural resources included, has been strictly subject to this dichotomy. Any change in this basic structure will entail a redistribution of national and social resources and thereby a major readjustment of the national and social resource structures and even a profound transformation of the social structure. The urban–rural dichotomy has been so much more than a simple socioeconomic structure; it is a cultural structure at any time, one so fundamental that it determines the social stability of China. City dwellers and country folks; citizens and villagers; urban and rural residents. These have traditionally been keywords of cultural identity in China. However, culturally, especially psychologically, they have never been an either-or choice in the country. Instead, we establish the identity of each other and ourselves through mutual recognition: We are both city dwellers and country folks. Through this, the dual psychological structure and identity of countless Chinese people are formed. For more than a thousand years, it has been the common thought and behavior of the Chinese people, especially the Han, to ask about the place of origin of one’s ancestors rather than one’s place of birth. This is closely related to

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the urban–rural compatibility in the process of social changes. In other words, the countryside has never been the countryside in a pure sense, nor is the city (similar to city-states in Western countries); they are inseparable and interdependent. Most city people have “rural blood” running in their veins. Even today, the sense of nostalgia for one’s hometown in the depths of their cultural psychology guides one back to their ancestral home in the countryside. Hence, the “Spring Festival migration” of hundreds of millions of people who only happens in China in the entire history of human civilization: We go home to celebrate the festival with our families. The countryside is inherently a spiritual home for urbanites with a rural identity. Although people are not used to the backwardness of rural areas, they cannot let go of their identity, which is why new urbanization must be a new cultural process in essence. Perhaps as commonly believed, urbanization is essentially the urbanization of people. What is the urbanization of people then? It is perhaps this very important issue that gives rise to conflicts between new urbanization and the Chinese cultural industry and their transformative development. 2. New urbanization creates new space for the development of China’s cultural industry As the largest social change in China since the beginning of modern times, new urbanization will fundamentally change the traditional binary opposition between urban and rural areas and rebuild the power structure of Chinese society. The historic transformation of the household registration system, in particular, will lay a foundation for social equity and justice in the future. In this sense, urbanization will create not only a new social structure but also a new national structure for China. The reform of the household registration system aligns with the new urbanization plan, resulting in a massive restructuring of the urban population. It marks the dawn of a new era for the structure of social productive forces. Culturally speaking, the arrival of this new era can be seen in the major adjustments of the structure of sociocultural consumption demand and great changes in the structure of cultural productive forces. With modern urbanization and a continuously growing cultural population, the cultural productivity and consumption potentiality of such a population will see an unprecedented growth spurt. Although we cannot predict exactly when it will come, common sense suggests that a

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great increase in the cultural population and the population with a disposable income is generally followed by a substantial rise in the number of people who produce and consume culture. After all, it is a historical reality that cities have a stronger capacity for cultural production and consumption than villages. For a long time in the past, urban and rural areas were two vastly different kinds of space in terms of cultural production and consumption, resulting in serious imbalances and inequalities. Although these historical differences have changed significantly since the beginning of the reform and opening-up, they have not been completely eliminated. In China, a “zhen,” or a town, serves as a transitional zone between cities and villages and is characterized by the features of both. Some consider it part of rural areas, but the permanent residents there hold an urban hukou—one’s registered permanent residence—instead of an agricultural one; a town is equipped with more comprehensive public services, including cultural services, than the countryside and a rich cultural market that is absent from villages. Others think of it as a city, and yet it is a living space with typical rural markets, a so-called “city in the rural imagination.” (This is because in the eyes of rural Chinese, a “cheng,” or a city, is a cultural space with specific meanings. For example, a “xiancheng,” or a county town, is more of a symbol of power, whereas a town does not have that connotation. To some extent, it is more a public space of rural governance based on the trade of agricultural products.) In a Chinese town, even members of the same family can sometimes fall into different categories of household registration, meaning there can be both urban hukous and agricultural hukous within the same household. This structure of household registration typifies the cultural space of a town: it is a combination of the city and the countryside. The only industrial form there has for a long time and to a large extent relied on manual production that is based on agriculture. As new urbanization opens up these traditionally enclosed towns, however, the cherished desire of farmers and villagers for many years and generations to become permanent urban residents is finally coming true. Such a great dream of identity conversion will inevitably lead to even greater dreams being created and pursued. As a large-scale expansion and reconstruction of cultural space, new urbanization creates a new task for China’s cultural industry: to prepare for the coming new era of cultural consumption, which is how people’s desire for conspicuous consumption can be best satisfied. Increasing cultural productivity,

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improving the quality of cultural products, and satisfying people’s diversified demands for spiritual and cultural consumption will bring structural changes in the sense of social productivity and the resulting “cultural dividend” to the development of China’s cultural industry at the present stage. As a social change aimed at meeting a huge, rigid domestic demand, the process of urbanization has already started as China set off the wave of reform and opening-up. The urbanization of towns and villages near large cities in particular has provided not only experience but also lessons for new urbanization. Dafen Village in Shenzhen is a typical example. With the deepening and expansion of urbanization, new urbanization and counterurbanization are likely to happen simultaneously, reflected in the development of cultural industries. On the one hand, traditional rural cultural industries integrate into urban creative industries as folk arts and crafts become part of urban culture. As a result, urban culture obtains a new form of life and thereby sustainable cultural support in developing its cultural and creative industries and transforming the heritage of industrial civilization. On the other hand, the giant leap forward in traditional rural cultural industries directly breaks away from the restrictions on cultural rights in industrial civilization, while the mode of production of new cultural industries using digital technology and the Internet has provided traditional cultural industries with new expressions. The value of modern technologies to the inheritance and development of agricultural civilization is conveyed in the term “folk cultural industries”. Moreover, thanks to capital’s actuarial calculation of cost and profit, the value of a cultural investment in villages and towns has been followed and explored as never before. The industrialization of urban culture has now become a new way of expressing existence and value for many ancient villages and towns. It is in this process that the spatial order of China’s cultural industry development is simultaneously deconstructed and reconstructed. In rebuilding the space of the cultural industry, villages and towns, and thereby traditional folk cultural industries, have gained unprecedented power of discourse and pricing. How does the cultural industry pivot and develop in this irreversible historical course? This is perhaps what new urbanization is inspiring us to think about.

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3. New urbanization has established a new spatial order in China’s cultural industry There are two types of culture. One is fluid, moving with the flow of people and constantly altering its shape. The other is static, which means it is solidified and immobilized in a physical sense. This roughly describes what we call intangible and tangible cultural heritage. They are two types of cultural spatial order, separate and yet integrated, opposite to each other and yet united as one. Cities and towns are static forms of culture. They present the otherwise fluid culture at a fixed location, visualizing its expression in a spatial form; this expression will thereby constitute a landscape, a cultural spatial symbol with unique connotations. It is because of this visualized space that people distinguish themselves from others and observe and recognize the different spatial expressions of cultural flows. These differences convey the complexity of people’s psychological structure and the diversity of culture, civilization, and aesthetics. They verify and illustrate the infinite richness, growth, and sustainability of culture. Diaolou, a multistory tower building integrating defense and residential functions with both Chinese and Western architectural arts, is a solidified expression of Lingnan culture and conveyance of foreign culture by young travelers residing overseas. Thanks to this spatiotemporal exchange and conversion between one’s hometown and alien land, Kaiping Diaolou has become an excellent interpretation of cultural diversity in the East and thereby a cultural site included in UNESCO’s World Heritage List. Moreover, we often use the static space of another country to express our nostalgia for our native culture. This is a very distinct spatiotemporal characteristic of Chinese cities and towns and the reason why Chinatowns can be found in many parts of the world. They are a typical form of cultural and ethnic identity that brings people closer together. The rise and fall of cities and towns, therefore, is not simply the destruction and reconstruction of a physical form of living space but the result of cultural flows and their ups and downs. There is no doubt that new urbanization is once again driving massive cultural flows and structural changes that may well be accompanied by the reform of the household registration system and creates a mighty wave of transformation throughout the country. After new urbanization, people migrate to the city, leaving behind old villages and towns. They stand still, silently watching and savoring the dreams and glory

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they once conveyed, and knowing that they are now only valuable as cultural heritage. In the modern process of new urbanization, they have either been recreated, like Dafen Village in Shenzhen, or withered out, like Wuzhen, an ancient waterside town in Zhejiang Province, now a sheer tourist attraction stripped of vitality and filled with hostels for backpackers. The more vibrant a town or village was in its prime days, the more it is devoured by darkness at present. However, the “pulse” of space with true vitality, because of its soul, beats strongly even in darkness. The so-called hollow villages—villages left behind by rural workers migrating to cities—in China are devoid of a soul, but they are ironically one of the most important products of cultural tourism in Zhejiang Province and part of a new form of cultural industry. New urbanization will, in the flows and stillness of culture, reshape its dynamic and static states, which are then mirrored in the cultural industry. Dafen Village may have created an industry of cultural processing and trade, specifically oil painting processing with supplied samples, but Wuzhen is an ancient town hollowed out and turned into a tourist product for people to consume. For many towns such as Wuzhen, is it life or is it death? In this regard, The Death and Life of Great American Cities by Jane Jacobs provides us with significant insights into the huge impact of new urbanization on the transformation and development of China’s cultural industry. It is perhaps out of the fear of death that Wuzhen has chosen rebirth and the future and become the permanent venue of the World Internet Conference. In doing so, agricultural civilization and information civilization converge here. As we all agree, new urbanization is centered around people. However, what are the elements and fundamentals of people-oriented urbanization? In other words, what are the actionable and measurable indicators and criteria? In different historical processes and spaces, people-centered urbanization takes on different meanings. Obviously, urbanization in a region that is still struggling to feed and clothe its people has standards and indicators completely different from those of a region that is about to be fully modernized. Despite the enormous gap between these two stages of modernization, they share one standard in common: the modernization of the civilization in which the human spirit resides, including the modernization of its systems and capabilities. The full satisfaction of cultural consumption demand based on a highly abundant supply of cultural products should be one important manifestation, which is inevitably accompanied by the fulfillment of cultural expression needs.

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These two aspects constitute tremendous momentum for the development of the cultural industry. As a result, the original balance between the two areas has been broken, and a new competitive imbalance takes over. In the process of new urbanization, as the countryside becomes an object of consumption for urbanites, cities no longer enjoy a one-sided advantage in cultural production and consumption. New urbanization leads to the disappearance of villages, which then becomes a cultural product of scarcity, and the possession and consumption of such products becomes a postmodern expression of counterurbanization. Meanwhile, urban problems exposed in the process of urbanization, especially traffic congestion and air pollution, begin spreading from cities to the countryside. To achieve a new balance in this historical process, the cultural industry must reshape and rebuild itself to meet the strategic needs in both areas brought by new urbanization, establishing a new spatial order along the way. Cities and towns are significant forms of cultural space that not only vary greatly with time but are themselves products of time. Different cultural spaces possess different cultural rights as a result of the historical division of labor. However, once this division of labor becomes an institutionalized form of cultural distribution, the issue of cultural justice, and thereby cultural industry justice, may arise. The unbalanced development of social production is a historical reason for the irrational distribution of cultural power in China. Changing this historical irrationality through institutional allocation is an important effort made by the state in the process of cultural development after the founding of the PRC. What is of fundamental significance for urbanization is the establishment of cultural centers and stations in each county-level administrative center and the building of a cultural center integrating the function of a county hall and that of a cinema. Through the allocation of administrative cultural resources, we have overcome the disproportionate backwardness of cultural facilities in many less developed regions and remote provinces. However, such a rigid allocation of resources over the long term has resulted in the institutionalized hierarchy of people’s basic cultural rights and interests. We cannot adjust the original rationality of resource allocation without a legitimate reason. For years, no such reason has been found. Although great changes have taken place in the allocation of cultural resources during cultural restructuring since the reform and opening-up, a fundamental institutional basis is still missing. In fact, cultural restructuring in rural areas has to some extent failed to effectively

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expand the basic cultural rights and interests of farmers, further enrich and improve rural cultural life, and activate the cultural creativity of traditional rural areas. Today, as urbanization goes hand-in-hand with the reform of the household registration system, a fundamental institutional foundation has been laid for this historical legitimacy. The country will usher in an unprecedented spatial adjustment of the urban and rural population structure, radically transforming the proportion of the cultural population and thereby the structure of cultural rights and power in these areas. Cultural expression, production, consumption, and communication will be revolutionized, presenting a great opportunity and a huge challenge for the transformative development of China’s cultural industry. Therefore, we should seize the historic opportunity of new urbanization to advance the modernization of the system and the capability of cultural industry development. At the same time, we should work to effectively resolve issues concerning agriculture, rural areas, and farmers and to build a new countryside that provides strong support for regional economic development and a strategic fulcrum for expanding domestic cultural demand and upgrading and transforming cultural industries. These efforts are of major strategic value and significance in modernizing China’s system and capacity for cultural governance. Naturally, they have become major issues in cultural industry development as well as important topics of academic research. New urbanization in China today is not only an economic and social process but also a political and cultural process. Changing one’s identity is, without doubt, a political need, which is deeply manifested in our political life, political changes, and the process of rebuilding a political order. A person’s identity is their most important social and cultural symbol. Any change in the identity of any person will inevitably bring about changes in the social manifestation of their original cultural symbols. These changes will take place not only in outward forms but also, more importantly, in the inner identity of that person. One key element that helps distinguish between urban and rural cultural identities is whether this person has a rural or urban mentality. The cultural process of new urbanization is, at its core, a symbolic transformation of one’s mentality, a change in the psychological structure of self-identity. Only through such a symbolic transformation of identity can the process of new urbanization be completed in the modern age. Urbanization is the transition of traditional cities and towns to modern ones and is, therefore, a systematic

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process that is not feasible without cultural transformation. The development of the cultural industry is a social and cultural mechanism that requires both cultural productive forces and cultural consumption power. In China, the countryside, with its bountiful traditional cultural resources, serves as an “ecological wetland” that nurtures creative genes for cultural industries; it possesses a self-repairing quality that makes it irreplaceable to cities. In a way, cities can be rebuilt, but it is difficult to rehabilitate villages once they are gone. How then can people’s need for urbanization and emotional attachment to rural life be satisfied at the same time? We need to answer this question, not just for the sake of new urbanization but for the transformative development of China’s cultural industry.

CHAPTER 5

Building the Cultural Industry Ecosystem

The cultural industry is a social ecosystem with close ties to people and society. As the objectification of people’s essential power, it is also connected to nature. In developing the cultural industry, its ecological quality and level of civilization affect both nature and society. To understand these effects, it is necessary that we delve into the concept of conservation culture and the environmental resources involved in cultural industry development.

1 The Awareness of Conservation in Cultural Industry Development In exploring how to build socialism with Chinese characteristics, the Seventeenth National Congress of the CPC made a scientific decision of fundamental strategic significance in 2007: to promote a conservation culture. With this great strategic goal put forward, socialism with Chinese characteristics entered a new period of scientific development, for which a new standard of value was proposed and established. It is of special strategic importance in guiding the choice of value and fostering the awareness of conservation in developing China’s cultural industry. The cultural industry is a form of cultural resources and cultural productive forces created by human society in the age of industrial civilization and telecommunications. It is an important pattern of cultural

© Social Sciences Academic Press 2022 H. Hu, The Development of the Cultural Industry in China, China Connections, https://doi.org/10.1007/978-981-19-3355-4_5

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ecology generated in the historical evolution of culture that contains profound insights of humanity into the progress of our civilization. It is therefore also a product of the ecological evolution of culture and the most crucial ecological chain in our lives today. The cultural industry has built our way of life and living environment and become part of our ecological behavior. It is precisely because of this that much of our participation in and expression of society and the world today is achieved by means of such carriers as the cultural industry. Therefore, it is significant in terms of not only cultural ecology but also human ecology and social ecology in general. This is why we need to pay close attention to the ecological impact that the cultural industry is bringing to us. There used to be more focus on the industrial chain and value chain of the industry, but less focus on its ecological connection with society and nature and with history and reality. Whether it is the development of natural and cultural landscapes or historical and cultural resources, we were more concerned with the economic benefits of all these developments and to what extent they could contribute to economic growth and rarely regarded the vigorous development of the cultural industry as a new growth point for culture. Such one-sided pursuit of economic value, which leads to historical tensions between the industry and cultural development and between the industry and social development, is beyond doubt a recipe for unsustainability. People have spiritual needs, and there are many ways to satisfy these needs. With the highly developed mass media of today, it is commonplace to obtain spiritual satisfaction through the consumption of visual cultural products. Cultural industry development in a country or nation is dominated by the production of cultural products that help create an inner world from which everyone can draw cultural nourishment and in which they can find their spiritual home and a piece of cultural “soil” suitable for growth. The cultural industry should provide such a source of cultural vitality and “sow seeds” for various cultural groups. It should become a way in which people live and behave and express their inner spirit. There is no way to satisfy people’s growing spiritual and cultural consumption demand without developing the cultural industry. Naturally, emphasizing cultural industry development becomes a necessary cultural policy for the government in ensuring that citizens exercise their cultural rights and interests. There is a responsibility here to ensure the security of citizens’ cultural consumption and the ecological security of humanity, nature, and society, whether it is the production or dissemination of

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cultural goods or the provision of cultural services. Just as departments of material production are required to supply pollution-free and safe food, sectors involved in spiritual production must provide cultural products and create a cultural ecological environment free of “contamination” and hazards. This is also a cultural right of citizens. Cultural industry development, therefore, should be measured by not only economic benefits but also social benefits such as public cultural security and cultural ecological security. In other words, we should strive to promote a conservation culture while developing the cultural industry. Moreover, as the culture industry becomes a tool for preserving cultural heritage in modern China, whether and to what extent this industry can promote cultural inheritance is naturally another ecological indicator for its development. Therefore, we need to innovate the selection of approaches, patterns of development, and our thoughts and methods of management in developing the cultural industry; whether or not a circular cultural economy has been built should be used as a new standard to examine the scientific development of the cultural industry. A circular cultural economy is driven by new cultural productive forces that contribute to the sustainable development of the cultural industry. It is essentially the continuous accumulation and regeneration of cultural resources that serve as an inexhaustible source of power for sustainable development. Only by maximizing the production of such productive forces can the cultural industry effectively overcome resource depletion and environmental pollution brought by industrial civilization. To this end, we need to introduce the new concept of conservation culture into the process of innovating our pattern of development and fostering the awareness of conservation in developing the cultural industry. Guided by the scientific idea of building a conservation culture, strategic adjustments should be made to the structure of cultural industries, the growth pattern of the cultural economy, and the pattern of cultural consumption. The conservation culture is a cultural ethic concerning the basic relations between people and nature, between people and society, and among people. It emphasizes harmonious coexistence, virtuous cycles, overall development, and sustainable prosperity. Having been through the stages of primitive civilization, agricultural civilization, and industrial civilization, it is a brand-new state of civilization that human society strives to pursue. To vigorously develop the cultural industry is not to weaken its capacity and function in generating cultural resources and establishing cultural traditions but to find new ways to achieve this and create a new form

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of civilization under the condition of a market economy. Talent shows, parodies of classics, and the wanton destruction of natural heritage and historical and cultural resources have received all kinds of criticism. This is because, behind the collective unconsciousness of the public, there is a lofty expectation that our cultural industry development will be guided by proper values and that our culture will develop in a sound way in the new historical period. This is a manifestation of consciously and actively pursuing a conservation culture. On the other hand, people argue with admiration over the humanistic care aroused in us by the TV series Brave the Journey to Northeast and the movie Assembly and commend farmers for their cultural creation on barren land during the construction of Hengdian World Studio. The reason is that these cultural products and the resulting cultural care nourish our hearts and souls, and in the process of addressing the problems concerning agriculture, rural areas, and farmers, they have created a brand-new way of life with passion and wisdom. Such are the cultural resources that practitioners of today’s cultural industry have created for our future generations. Compared with those who are trampling China’s tangible and intangible cultural resources and heritage, these pioneers of the modern cultural industry have initiated a positive new cultural atmosphere. Only in a cultural environment created through the sustainable development of the cultural economy is it possible for the cultural industry to develop in a sustainable way. Without the sustainable development of the cultural industry, there is no national cultural soft power in the true sense, let alone a sustainable lifestyle for each of us. Exploitation and development are the two most important patterns of growth for China’s cultural industry in recent years. It is precisely these two growth patterns that help establish the relationship between the cultural industry and the environment and resources. In reality, however, we often see two different forms of exploitation and development: one is destructive exploitation, that is, exploitation at the expense of the environment and resources, especially through the erection of some so-called cultural industrial parks for immediate economic interests at the cost of the long-term cultural interests of future generations; the other is protective development based on a sustainable environment and sustainable resources, satisfying not only the need of the current generation to preserve and develop culture but also the need of cultural ecology for regular growth. There is no doubt that the latter is what we need and what we should leave to our descendants, just like the cultural heritage left to us by our predecessors.

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The cultural industry should be a machine that regenerates cultural resources instead of consuming them since our national culture can be protected and developed only if we continue to regenerate and create cultural resources. This concept of conservation culture should guide the development of China’s cultural industry, for which the old pattern of resource depletion and environmental pollution is no longer viable. Strategically readjusting its development pattern and combining resource regeneration with environmental friendliness is a vital decision that the cultural industry needs to make. Cultural soft power is a major component of the overall strength and international competitive strength of a country and the most important form of power in the cultural strategic competition between countries today. To gain the upper hand in such intense competition, it is necessary to significantly enhance our cultural soft power while building up our economic prowess, scientific and technological strength, and national defense. A country acquires cultural soft power through sustainable cultural development, constant accumulation of cultural wealth, and continuous improvement of the cultural attainment of its people. It is a process in which humanity works toward harmonious relations with nature, society, and history. Any tension or even conflict in these relations is not conducive to it. Only through the friendly coexistence and shared development of people and the environment—natural and social environment included—is it possible to reinforce our national cultural soft power. Therefore, the influence and penetration of a country’s cultural soft power are directly affected by the degree to which its cultural development and cultural ecological environment accommodate each other. This depends on a thriving, sophisticated, and eco-friendly cultural industry, the most important component of national cultural soft power. Without it, we will not be able to see this power embodied in the global market economy. The development of China’s cultural industry should contribute to efforts to enhance this power instead of undermining them. It will be epitomized in the image of Chinese culture displayed by our cultural products, which is also the core element of our cultural soft power. As a result, the cultural industry will shoulder major responsibilities that can be assumed by no other industries. Cultural soft power is not sustainable without the conservation of cultural resources. In the course of cultural development, it is necessary to allow the cultural ecosystem to regularly rest and recuperate.

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Overgrazing leads to the desertification of grasslands. Similarly, overexploitation of cultural resources will turn our cultural environment into a wasteland. Some countries in the developed world proposed developing creative industries as they entered the postindustrial era. The purpose is to sift through the “pool” of cultural ecological “genes” and find new “genes” needed for the survival of culture today, as well as to seek a new path for cultural development and a new model for sustainable social development. In this way, cultural ecology can be saved from the crisis arising from the massive consumption of cultural resources by industrial civilization. The regeneration of cultural resources is essentially a form of a circular economy and sustainable cultural development. The protection of oral and intangible cultural heritage is, in fact, the conservation of the “gene pool” for a diverse cultural ecology and the securing of a cultural ecological foundation for sustainable cultural development. We should guard against an ecological security crisis in which a seeming boom in the cultural industry signals the decline of our culture. A conservation culture is a form of culture based on advanced productive forces that produces a general sense of well-being among people. In addition to ensuring a basic cultural life for the people, it aims to constantly improve their cultural environment and quality of cultural life. The world today has entered an era where countries and regions are engaged in all-out competition for cultural soft power. Obtaining new strategic interests by developing and continuously enhancing cultural soft power has become the most important form of international strategic competition, which is profoundly affecting cultural trends and the restructuring of cultural forces in the world. The cultural industry is a major domain where such competition is most intense and concentrated. To gain a comparative strategic advantage, China must strengthen its cultural industry development with Chinese characteristics guided by the scientific concept of conservation culture. Strategic changes should be made in the way cultural industries develop as well as in the pattern of economic growth. The scientific progress of China’s cultural industry should be pursued with this new value of conservation culture in mind.

2 Resources and Environments for Developing China’s Cultural Industry The largest conflict brought by economic globalization to modern China is the conflict between globalization and localization or nationalization, one of the major conflicts in today’s society. In the context of a market economy and globalization, to examine the regeneration of national

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cultural resources and the development of the cultural industry, attention should be given to the relationship between cultural industry development and our cultural traditions. It reveals the tension between the development of China’s cultural industry and the regeneration of national cultural resources, which might be an early warning of problems to come. In addition to creating economic value, cultural resources can generate cultural value, which is precisely what makes them timeless. For a long time, we have talked more about our attitude toward national cultural resources from the perspective of conservation. This is certainly an important perspective, as it provides a historical dimension that confirms who we are and a basis for cultural identification. There is no way to discuss other issues without this premise. All our ways of living and forms of existence today are, in a sense, a product of the cultivation of our national cultural resources. However, this perspective alone is not enough. On the issue of national cultural resources, we need another historical dimension, which is to examine our cultural activities and cultural behavior from the vantage point of the future. We should ask ourselves the following questions: What has our generation done for the accumulation of national cultural resources and the continuation of our national cultural traditions? What have we created for the development of national culture? In other words, what have we added to the future composition of our nation’s traditional culture? What is our contribution? If we regard national cultural traditions as a towering tree that keeps growing and the cultural resources its growth rings, which one of the rings is created by us? In connection with the current Chinese film industry, especially the blockbusters produced by it, how should we view the relationship between the industrialization of films and the cultivation of national cultural resources? Or, to put it another way, what kind of a new relationship should we establish between them? The greatest difference between cultural resources and other kinds of resources lies in their ability to create not only economic value but also cultural value. It is because of this cultural value that they transcend time and national borders, make possible the cultural differences among peoples and the progress of civilization, and allow today’s people to surpass their predecessors on the basis of inheriting their achievements. Cultural resources are generated through people’s living labor. They indicate the level of development of cultural productive forces and, at a later stage, how human beings understand and create the world in a spiritual

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sense. As a result, these two factors form a mechanism that drives the regeneration of cultural resources. As new demands emerge for the regeneration of cultural resources and cultural development and the traditional mechanism is no longer sufficient to satisfy such demands, new mechanisms and forms are inevitably brought into being. This is how writing language, paper making, the art of printing, and the cultural industry came into being. It is in this way that human society continues to obtain the energy needed for its evolution and keep track of the history we have made by leaving new rings on the “tree of wisdom.” Films are a form of cultural energy and a way to accumulate and regenerate cultural resources created in the age of the industrial revolution and telecommunications. Through the development of cultural productive forces, the progress of human society has provided us with new ways to recreate cultural resources, from writing, paper making, printing, publishing, film making, television production and records to digital films and the IPTV (Internet Protocol Television) technology of today. New mechanisms are thus established for the generation of cultural resources required by the advancement of human society. This has enabled humanity, in the process of accumulating wisdom, to turn our wisdom into the driving force of our own evolution. Therefore, the industrialization of film and television should never be put in opposition to the accumulation and regeneration of cultural resources. It is a pathway to and a driving mechanism of the regeneration of cultural resources in a market economy. However, what we often see today are the indiscriminate destruction of historical and cultural resources for the development of cultural industries, the arbitrary tampering of the attributes of cultural resources in the production of films, and parodies of historical and cultural resources and elements in various blockbusters. However, what do these blockbusters leave us apart from economic value and the so-called visual feasts? Nothing but tension on the relationship between the industrialization of films and cultural resources. In the process of deconstructing the attributes of cultural resources, they subvert all the cultural legitimacy established by the original cultural resources. Cultural resources possess certain attributes that are mutually exclusive. Our national cultural traditions are formed in different historical periods and thereby acquire different attributes as cultural resources. When we talk about Renaissance, Enlightenment, Romanticism, and Critical Realism, what we are trying to express is not only the acknowledgment of

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a specific period in the history of human civilization but also the recognition of the cultural works produced in this period and a cultural resource attribute formed by the common characteristics of these works. In China, the so-called red classics and national classics describe an attribute of cultural resources. Different attributes are composed of different aesthetic elements as well as different elements in general, making them mutually exclusive. This can be likened to biological diversity in nature. An organism may be an indispensable link in the biological chain in one ecological environment but an “enemy” in another, where its invasion will pose a threat to biodiversity in that ecological environment. The same is true of the composition of cultural resource attributes. This is why while human society advocates cultural diversity, it also resists bad cultures that may cause issues of cultural security in one’s own country or nation. As two classics in the history of Chinese and foreign literature, Hamlet and Thunderstorm—a tragic play written by Cao Yu and published in 1934— have created commonwealth for human society through the formation and accumulation of cultural resources in the long course of historical movement, with their connotations and attributes defined historically. They have been integrated into the intrinsic humanistic nature of our culture today. Over time and across countries, people draw strength from the cultural nutrients they provide, making them irreplaceable as an important component of cultural resources. It is this irreplaceable historical rationality and legitimacy that distinguishes them from other literary classics and gives them eternal value. However, The Banquet and Curse of the Golden Flower, films based on Hamlet and Thunderstorm, respectively, are a reaction against history. In the name of visual culture, they produce present-day cultural resources devoid of an aesthetic sense and impose them on the audience while deconstructing the legitimacy and rationality of historical and cultural resources. In doing so, they have subverted the understanding, acceptance, and aesthetic appreciation of the original resources and the historical legitimacy based on them. How many adaptations of these two classics have there been in history that has gone thus far against history and made such a mockery of the aesthetic dignity of the people of their time? We are already aware of the security implications of American blockbusters adapted from the story of Mulan. Why not be equally aware of the potential threats to cultural resources posed by our own adaptations? This is a very dangerous subversion that must be criticized. Here, we have to reiterate the famous remark by Engels that we should not forget Shakespeare for Schiller.

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Cultural resources are open to continuous refinement, with the richness of their attributes still being explored. Cultural traditions and the attributes of cultural resources mirror the historical background of their time and are manifested in the region where they are located and the people who possess them. Different cultural ecological environments will inevitably result in different forms of manifestation. Such differences in attributes and regions are an essential prerequisite for cultural diversity. Resources can be constantly refined, but due to the limitations of tools and means, the essence of many resources cannot be extracted all at once. Such is the case with not only material resources but also cultural resources. Since cultural resources are generated in various historical contexts and environments, we are exploring the richness of their attributes even to this day. This is most obvious in our film and TV production, especially the countless remakes of national classics. Remaking is actually the redevelopment of classic national cultural resources. Put in academic terms, it is the reinterpretation of literary and cultural classics by using the language of images. It is to re-extract the value that is not yet recognized by us from the rich “deposits” of classic cultural resources and activate its modern charm to continue with our cultural innovation. As an important approach to the reproduction, growth, and changes of national culture, reinterpreting cultural classics is a significant mechanism for actively protecting our national cultural resources. We are not against the reinterpretation of classics itself; in fact, we are in favor of the rediscovery of classics by reinterpreting them. However, we should respect rather than parody the excellent cultural heritage of our nation and the world. While admiring national cultural classics, we should also have the courage to surpass them. Cultural resources are generated through people’s living labor. They indicate the level of development of cultural productive forces and, at a later stage, how the human spirit understands and creates the world. As a result, these two factors form a mechanism that drives the regeneration of cultural resources. As new demands emerge for the regeneration of cultural resources and cultural development and the traditional mechanism is no longer sufficient to satisfy such demands, new mechanisms and forms are inevitably brought into being. Human society should not always follow only one pattern of cultural development and resource growth but should constantly pursue harmonious interactions between humanity and nature, between humanity and society, and between humanity and culture to find a way that can best

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meet the needs of resource accumulation. Through the development of cultural productive forces, the progress of human society has provided us with new ways to recreate cultural resources, from writing, paper making, printing, publishing, film making, television production and records to digital films and the IPTV (Internet Protocol Television) technology of today. New mechanisms are thus established for the generation of cultural resources required by the advancement of human society. This has enabled humanity, in the process of accumulating wisdom, to turn our wisdom into the driving force of our own evolution. In this sense, all these cultural industries, such as printing, publishing, film making, and television production, which are regarded as means and tools, have become working machines that regenerate cultural resources. Therefore, whatever forms of cultural industry development should never be put in opposition to the accumulation and regeneration of cultural resources. It is a pathway to and a driving mechanism for the regeneration of cultural resources in a market economy. What should we do for the cultivation and regeneration of national cultural resources? Today, whatever the subjective motives of film industrialization are, its market behavior objectively constitutes an important form of cultural resource regeneration. In other words, any film and TV product is an objective form of cultural resource with certain attributes that are independent of human will. Although these resources themselves may not necessarily form a crucial part of our cultural history, similar to the countless cultural products that were once produced in history but no longer exist today, they have been transformed into cultural elements that contribute to cultural progress. It is precisely such cultural elements that help shape the unique attributes of various cultural resources and distinguish them from other forms and attributes of cultural resources. Therefore, we should reflect upon our responsibilities in the industrialization of film and television today: What should we do to help cultivate and regenerate our national cultural resources? How do we position ourselves in this process? This is not to impose educational, disciplinary, or ideological missions on film making and television production from the outside. The Spring River Flows East, a Chinese film from the 1930s, was later adapted into a television drama; likewise, many novels have been adapted into films and then television series. Aren’t all these works important cultural resources for the industrialization of film and television today? We should by all means promote the industrialization of Chinese films and draw inspiration and nutrients from the riches of historical and cultural

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resources. However, instead of consuming such resources, the cultural industry should be a machine that assists in the regeneration of cultural resources. An overview of Chinese blockbusters since Hero—a martial arts film directed by Zhang Yimou in 2002—reveals a major problem: In utilizing national cultural resources, they do not add anything to such resources except for their excessive consumption of them. Regarding “enhancing culture as part of the soft power of our country,” the Seventeenth National Congress of the CPC set a vital premise, which is to “stimulate the cultural creativity of the whole nation,” with the aim of “better guaranteeing the people’s basic cultural rights and interests, enriching the cultural life in Chinese society, and inspiring the enthusiasm of the people for progress.”1 All these serve the ultimate goal of ensuring the fundamental cultural interests of the people. The “cultural creativity of the whole nation” is the source of vitality for our cultural soft power. This is sovereignty embodied in the spirit of democracy. Here, the Seventeenth National Congress of the CPC presented an important topic: the cultural rights of the people. The cultural rights of the people are an essential strategic basis for building and enhancing the cultural soft power of a nation. As the most fundamental cultural productive force and the most important manifestation of the value of cultural rights, the cultural creativity of people can be released at an unprecedented level only when such a productive force is emancipated to the maximum extent. To this end, we need to introduce the new concept of conservation culture into the innovation of our cultural system and foster an awareness of conservation in cultural construction and development. Only in a favorable cultural ecological environment can people’s cultural creativity be fully stimulated, which in China means freedom of speech, press, and expression within the framework of the Constitution. This is the strategic foundation for the development of national cultural soft power. The choice of lifestyle, including material lifestyle and spiritual lifestyle, is the most basic cultural right of the people. Since they have chosen the self-management mechanism of a country and transferred some of their rights to implement such a mechanism, the right to a series of lifestyle choices, including freedom of 1 Hold High the Great Banner of Socialism with Chinese Characteristics and Strive for New Victories in Building a Moderately Prosperous Society in all Respects, Report to the Seventeenth National Congress of the Communist Party of China by Hu Jintao on October 15, 2007.

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speech, press, and expression within the framework of the Constitution, should be a fundamental and the most important right of the people. All reproduction of life and the cultural creativity of every individual is built upon this. Without constitutional constraints, we cannot fully unleash the cultural creativity of every individual. Anarchist states do not possess cultural soft power, of which there are ready examples, such as Haiti, in today’s world. Therefore, it is necessary that we establish our cultural soft power oriented toward the cultural rights of the people to safeguard the cultural security of our nation. There is no way to strengthen our cultural soft power without fully stimulating the cultural creativity of the whole nation. The cultural soft power of a nation is the natural embodiment of the lifestyle and spiritual home created by all the people, rather than the product of a single national cultural machine. Here, to “better guarantee the people’s basic cultural rights and interests” and to ensure that “people will share the benefits of cultural development” are of special significance. The most fundamental way to unleash the cultural creativity of the whole nation is to create a lively cultural ecological environment full of passion, friendliness, and trust that makes everyone feel comfortable to give full play to the talent, wisdom, and creative impulse of every individual. Without adequate protection of the people’s basic cultural rights and interests, it will be impossible to truly bring out the cultural creativity of the whole nation and create the cultural ecological environment needed to enhance our national cultural soft power. Here, cultural resources and the cultural environment have been highly unified. The development of China’s cultural industry should not revert to the beaten path of resource depletion and environmental pollution, especially in today’s rapid economic globalization. With the mounting tensions between globalization and localization, whether we can adhere to the individualized development of local culture not only concerns the availability of resource support but will also have a direct and profound impact on the driving forces behind globalization. Without local cultural diversity, globalization is likely to decline due to a lack of driving mechanisms and resource support. Therefore, to break away from the same old pattern of resource depletion and environmental pollution, we should look at the development of cultural industries from a scientific point of view. In other words, we must actively recreate cultural resources while promoting the modern development of China’s cultural industry so that the regeneration of such resources can effectively make up for their consumption. In

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this process, we can continue to perfect the accumulation and regeneration mechanism of our national cultural resources. Only then can the development of our cultural industry and the growth of national cultural resources coexist in a way that we expect.

3

The Low-Carbon Development of China’s Cultural Industry

The age of low-carbon development is a time when human society is shifting from industrial civilization to an ecological civilization. In this crucial period, a new international strategy is being tested. The development of China’s cultural industry corresponds to the “testing period of cultural industry development” after the fundamental tasks and objectives of cultural restructuring have been basically completed. Whether all the new systems and mechanisms established in cultural restructuring can be up and running as expected and effectively promote the construction of a new cultural system is of great strategic significance to the overall development of China in the future. This impacts not only the success of cultural restructuring itself but also the realization of all national strategic goals for future development, including strategic issues such as politics, economy, society, and culture. Therefore, it is particularly important to guide the future development of China’s cultural industry with the concept of a low-carbon economy. 1. The aim and strategic choice of cultural industry development should be made clear through a vertical division of labor in cultural industries In 2004, the NBS released a classification system for cultural and related industries, along with the three-layer division of China’s cultural industries: the core, the periphery, and the related. This highly influential system has since become the statistical basis for the gross domestic product (GDP) and added value created by the cultural industry in various regions. However, according to specific plans formulated by all cities and provinces based on the Eleventh Five-Year Plan, the related industries were rarely listed among their priorities of cultural industry development. An analysis of the said plans reveals that their focus fell within the scope of the Plan on Reinvigoration of the Cultural Industry

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issued by the State Council in 2009. In fact, no related industries were included in the outline of cultural industry development plans except the printing and reproduction industry, which may be considered part of the related. As a result, we need to proceed from the actual development of China’s cultural industry and the reality of various regions and establish a hierarchical system of cultural industries based on the development of cultural productive forces that serve as the basis for formulating the Twelfth Five-Year Plan. Cultural industries are hierarchical. Different tiers represent different stages of cultural productivity and levels of civilization. The current structure of China’s cultural industry consists mainly of three levels: traditional cultural industries based on agricultural civilization and manual production, modern cultural industries based on industrial civilization and large-scale mechanical reproduction, and emerging cultural industries based on information civilization, with the Internet and digital technology as their principal mode of production. To provide a basis for the strategic planning of cultural industry development in various regions, we need to analyze the social functions of cultural industries at different levels. Based on the theory of hierarchical cultural industries, a system of division of labor should be proposed for regional cultural industry development. The cultural functions of various industries at different levels are unique and irreplaceable, as they act on different people, satisfy different needs, and realize different values. The development of cultural industries at different levels calls for diverse groups of cultural consumers and applicable policies, including supportive policies and development policies. We should therefore consider and deploy the strategies and policy choices of different cultural industries from the perspective of their specific tier. Laying extra emphasis on new cultural industries, measuring traditional cultural industries with economic indicators and market performance, and implementing differentiated strategies and policies for cultural restructuring and cultural industry development based on this are all factors directly and seriously impacting the development of traditional culture industries in China. The reason why traditional cultural industries are struggling with all their problems lies in our indiscriminate theories and policies on the industry as a whole. Therefore, to choose the right strategy for further deepening cultural restructuring and planning a new round of cultural industry development, we must look at the cultural industry as a hierarchical system. Through this lens, we can adopt different standpoints

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about the industry and thereby choose different strategies and paths for its development. Cultural industries at different levels have different histories. The legal basis for their existence lies not in the cultural industry itself but the cultural consumers cultivated by it. Just as the new cultural generation born in the 1980s and 1990s grew up with online games, many past generations have formed their own aesthetic consumption culture with traditional cultural products. In addition, people in cities and villages basically lead two different lifestyles. The vast cultural consumer market in rural areas, along with the traditional handicraft industry and arts and crafts rooted in agricultural civilization, seems out of touch with modern society, but they are often the source of cultural cognition and cultural identity. Why do old factories and warehouses in large cities, once transformed, suddenly take on a new lease of life? Because there is value in traditional buildings and space. However, the value is perceived differently by different people. That’s what differentiates a real estate developer from an artist. Space generates diversity, and time creates value, which also varies with time. Why then do we place more stress on the present than on the past in selecting and formulating strategies and policies for cultural industry development? There are great regional development disparities across China. Cultural regional imbalances are far more severe than economic imbalances. Conditions vary in different parts of the country, including their regional advantages, market environment and conditions, human resource reserve for the cultural industry, ownership of resources required for the development of different cultural industries, and starting point of cultural industry development. It is therefore nonsensical for all regions to swarm into the cultural industry in the process of economic transformation. As pointed out by a report on China’s news and publishing industry released in 2009, the combined scale of the industry in the autonomous regions of Xinjiang, Xizang, Inner Mongolia, and Ningxia was less than one-quarter of the national average, which is very telling. Conditions can be created in the eastern region should there be a lack of resources. However, is it possible to follow the same route in the western region? Here, we need to uphold the concept of scientific development. In other words, we should utilize whatever is available and select the appropriate cultural industry at the right stage of development. Based on the different levels of cultural industry, a system will be created for the division of labor in China’s cultural industry. Perhaps no other country in the world has

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made as much effort as China to develop its cultural industry or listed cultural industry development as one of the indicators of performance for government officials. Special plans for the development of cultural industries should be advocated and encouraged at all localities, especially at the local and county levels. Cultural industries should be developed at an appropriate level based on local conditions. For a prefecture-level or county-level city, a single program targeting one cultural industry with local characteristics is far better than a grandiose but impractical plan. If you attempt to do everything, you end up doing nothing. The end result of such planning is only cosmetic. Therefore, to optimize the allocation of cultural resources in the spatial structure of cultural industry development, it is necessary that labor be divided under the guidance of policies and based on the specific level of cultural industries. In addition to overcoming the lack of variety, we should also make room for cultural industries at different levels to unleash their imagination. The natural world would be a dull and monotonous place if there were only one flower left. Similarly, one single level of cultural industries thriving alone is not in line with our original intention of developing cultural industries. 2. Cultural industry development should follow a pattern based on resource growth and environmental protection Major disasters caused by environmental disruption are the most pressing existential crisis facing human society. As a result, the world is moving toward a low-carbon economy. A new moral standard will emerge that measures the relationship between humanity and society as our relationship with nature is being rewritten. Low-carbon development will no longer be just an economic and political issue but also a social and cultural one, a new moral standard to measure future levels of social and national civilization. It will therefore become a strategic weapon, the symbol of a greater voice, and an inevitable choice of public policy, ultimately reshaping the world order and balance of power. Generally, the cultural industry falls into the category of a low-carbon economy. However, there are in fact low-carbon and high-carbon cultural industries, whether judged by a series of systematic industrial standards established by the international community or in terms of the overexploitation of natural and cultural resources and the resulting pollution in the past ten years. To

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save energy and reduce emissions, we need to transform the mode of not only economic development but cultural industry development. The strategic rise of the cultural industry in contemporary China was put forward as a way to transform the pattern of economic development. However, the industry itself also shoulders the mission of changing its own growth pattern and development pattern and faces the challenge of low-carbon development. The case of Yunnan deserves people’s attention because the province has established a low-carbon model of cultural industry development by adhering to the principle of resource-economical and environmentally friendly development. As repeatedly stated above, the cultural industry should be a machine that regenerates cultural resources instead of consuming them. After all, the historical and cultural resources of a nation are in short supply, and some are even nonrenewable. The preservation of cultural diversity, similar to that of biodiversity, must ensure the resources and environmental conditions necessary for its “species” to live on. In other words, the cultural industry should, in the course of its development, continue to provide renewable resources for our nation. If you walk on the Ancient Tea Horse Road—a trade route that links Yunnan, Sichuan, and Xizang—and trace the tinkle of bells carried by the horse caravans echoed among the mountains or worship the Snow-capped Yulong Mountain on the “lost horizon,” you can see that in the effective exploitation of cultural resources, Yunnan has managed to keep the possible resource and environmental damage within a safe limit. In developing cultural resources and producing cultural products, any destruction or excessive exploitation is regarded as a cultural crime here. It is because of this commitment that the diversity of national culture has not been eroded by the principles of the market economy, giving the Yunnan case the aesthetic value of political culture. It demonstrates exactly such a road of cultural industry development dominated by the construction of a conservation culture. China is entering an era of a low-carbon economy. For a country that has not yet achieved industrialization, low-carbon development is a far more serious challenge than informatization at this critical moment in history. With its time-honored history, Chinese civilization has always measured its development by ethical and moral standards. In today’s China, low carbon has naturally become one such important standard. It is more than just an economic issue; it is a cultural issue and a matter of scientific development on a moral basis and therefore has a direct

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bearing on developing a conservation culture in the country. In formulating our policies for cultural industry development, one major issue to pay attention to is value orientation. The cultural industry is a social form of human civilization with low carbon as one of its essential characteristics and therefore a vital strategy. It is time for China to take the future into its own hands and promote a conservation culture by establishing a carbon emission standard for energy consumption per ten thousand yuan of GDP growth in cultural industries and vigorously developing lowcarbon cultural industries. The country should continue to accumulate cultural resources while exploiting them and transform the development pattern and growth pattern of the cultural industry in a strategic way while developing the cultural economy, all as an effort to build a low-carbon pattern based on resource growth and environmental protection. This should be an important choice of policy and strategy for the development of China’s cultural industry. 3. A mechanism should be built to compensate for the consumption of cultural resources Resources, be they material or cultural, are scarce at all times. To satisfy consumer demand for resources, we must continue to regenerate them. The evolution of human society with its limited cultural resources is driven by many important factors, one of which is the continuous regeneration of cultural resources. Creative regeneration is the most effective way to ensure the efficient use of cultural resources. Human beings are born with the need to innovate, which can be passed on from generation to generation. Innovation is also the most important mechanism of cultural resource regeneration. Generally, innovation originates from crisis management in response to some kind of resource depletion. When it is impossible to continue to obtain effective resources for the survival and development of people and society without innovation, our survival instinct becomes a primary driving force that activates innovation, since only innovation can reproduce resources that cannot be regenerated through natural forces alone. This is why, at every critical juncture in the development of human society, natural and social scientists were born to benefit all humankind. In this sense, innovation is a result of not only resource allocation and consumption but also our effort to create new cutting-edge products that help reduce resource consumption, seek

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alternative resources, and promote resource regeneration. Unfortunately, research and policies on the development strategy of China’s cultural industry today focus more on increasing financial input and the added value of the industry and less on reducing the consumption of cultural resources, enhancing their regeneration and use efficiency, and innovating ways of using resources. Take the consumption of rural cultural resources by cities as an example. The lack of a resource compensation mechanism needed for the construction of a new rural culture has resulted in unprecedented inequality between urban and rural areas in the consumption of cultural resources. We should encourage industry to nurture agriculture and cities to nurture rural areas. The profit gained and capital accumulated by the cultural industry in developing and utilizing cultural resources, especially excellent traditional resources that are immovable in rural areas, should nurture the construction of new rural culture and traditional culture. Therefore, the Twelfth Five-Year Plan should safeguard the cultural ecosystem essential to the development of China’s cultural industries by establishing a compensation mechanism for cultural resources based on overcoming and eliminating the inequality in the consumption of cultural resources and innovating the use of resources. 4. A policy system should be established for cultural industries that is based primarily on universal benefits and supplemented by targeted support There are two basic policy models that promote cultural industry development in the world: one is the East Asian model represented by Japan, South Korea, and Taiwan China; the other is the competition policies of Western countries with Britain and the United States as typical examples. The East Asian model focuses more on the formulation of industrial policies by the government, while the Western model places more emphasis on providing an institutional environment through competition policies that maintain the order of market competition. When a country’s economy is at an early stage of development, it is easier for the government to guide the market by controlling the direction of future development to avoid losses caused by excessive investment risks to enterprises. In this case, industrial policies have an advantage over competition policies as a prewarning mechanism that safeguards industrial security. In a cultural market that is not yet fully developed, formulating

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government policies to guide investment and foster a market for cultural industries would be a safer choice. After all, the cultural industry is a highrisk industry, especially for an economy the size of China. Before it was fully prepared in many ways, the country joined the WTO, participated in international cultural market competition, and faced the challenge of globalization. One can imagine the crisis that awaits China if it fails to adopt an incremental approach to the development of cultural industries and mitigate step by step the security risks brought by its accession to the WTO. However, at the same time, we must also see that the cultural industry, unlike other industries, is characterized primarily by the production and provision of content. The cultural consumption habits of people are not as controllable and regular as their material consumption habits. As a result, the government is not equipped with any more information than the entities of cultural investment. The formation and development of the cartoon and animation industry, the online gaming industry, and clusters of creative industries, for example, were not included in the initial government plans for the development of the cultural industry. In today’s China, the cultural industry, on the one hand, is still in its early stage of development; on the other hand, it is defined as a national strategic industry. Therefore, the choice and formulation of industrial policies have become an important national strategy. To change the development pattern of China’s cultural industry during the global industrial restructuring in the postcrisis era, the government, in particular, needs to create a favorable policy environment, especially by formulating industry access policies that ensure fair competition. When the cultural industry enters a new and more advanced stage of development as a national strategic industry, priority should be given to policies that emphasize universal benefits rather than targeted support. Meanwhile, it is also necessary to determine the reasonable coverage of targeted industrial policies. The development of China’s cultural industries should break out of the old pattern where they are treated as special cases and handled with special methods by the government and with preferential policies in favor of particular industries. The practice has proven that the cost of sticking to such a pattern is too great. Targeted industrial policies have led to unhealthy competition between enterprises and the government, for instance. China needs to formulate inclusive cultural industry policies and gradually transition from direct and targeted support and preferential policies to policies that are based on universal benefits. The country should proceed from the strategic goal of transforming the pattern of

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economic growth and development and organically combine targeted policies and inclusive policies, ultimately setting up a policy system for cultural industries that is based primarily on universal benefits and supplemented by targeted support. In selecting the development pattern and experience for our cultural industry, we should therefore surpass the successful experience of East Asian economies in implementing policies of industry revitalization and seek to create a Chinese model. Strategic industries are defined more from the perspective of international politics and national security. As one of the strategic industries in China, the cultural industry must be capable of competing in the global market and safeguarding national cultural security. Naturally, formulating new policies that are in line with the goal of building an emerging industry of national strategic importance has become the key to whether we can successfully transform the development pattern of our cultural industry.

CHAPTER 6

Justice in the Cultural Industry

Tensions have arisen between the development of the cultural industry and that of politics, economy, culture, and other aspects of people’s social life. The cultural security of our nation is one such example. This prompts us to think about how we can ensure justice in other fields and aspects as we strive to develop the cultural industry and achieve justice in it.

1

Cultural Industry Development and National Cultural Security

Globalization is trending in today’s world and exerting a profound influence on the historical process of the entire human society while also causing unprecedented problems to the development of the cultural industry. The theory of the clash of civilizations was proposed as the Cold War was drawing to a close. A new form of world hegemony emerged with postmodernism eliminating all centers and authorities. Increasingly permeated by the economy, culture is becoming a major national force in international politics and economy. As a result, globalization is impacting not only the economic policies and business activities of various countries but also their cultural policies, cultural movements, and the development of their cultural industries. It also affects changes in the international cultural order and the restructuring of cultural forces. Thanks to the free

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flow of capital and free exchanges of information brought by globalization, resources are being redistributed globally, driving unprecedented circulation of cultural commodities and cultural collisions. In such a context, culture is no longer shaped and carried forward in a traditionally fixed space; the cultural boundaries of countries and nations are disappearing, leaving cultural sovereignty exposed to severe threats and challenges. Ultimately, globalization boils down to an issue that concerns not only economic strategies but also cultural strategies, particularly strategies for cultural industry development. All countries in the world today are trying to protect their national cultural industries and their interests. Economically and culturally speaking, the process of globalization is essentially led by developed capitalist countries in the West. Dominant Western cultures have been using their capital, technology, and market advantages to infiltrate and control underprivileged cultures and force open their markets. The United States in particular has put forward its so-called national security strategy for the new century, which is to lead the world, along with a series of strategic theories on the “new interventionism” of culture, such as “values based on American values.” In such a context of globalization, countries must try to survive and develop their culture and cultural industries in a way that conforms to their fundamental cultural interests. This has become a prominent issue for primarily Eastern countries and the vast third world countries. As a direct consequence of economic globalization, cultural globalization has become the contemporary version of capital plunder that directly threatens the existence and development of cultural industries in weaker nations. These sovereign states are forced by globalization to face the issue of national cultural security, including the security of the cultural industry. 1 The survival of culture is a prerequisite for the survival of a nation. In addition to all past creations and achievements accumulated by a nation or country, culture carries the genes for its future sustainability, providing value and rationality for its existence and development. Therefore, any threats to or invasions of culture will inevitably plunge the value and significance of the nation or country, along with its legitimacy, into deep crisis. This is why national cultural security matters. The historical profundity of “The Last Lesson,” a short story by French writer Alphonse

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Daudet, lies in how it reveals from an aesthetic point of view what culture and the threat of its deprivation mean to the existence of a nation or country. It evokes in readers an awareness of national cultural security, as well as life experiences associated with the survival of their country or nation. The concept of national cultural security was not previously proposed as an important part of the development of national cultural industries. Not until today, in the face of globalization, especially with the emergence of cultural imperialism that poses a real threat to the development of China’s cultural industry, are we forced to reflect upon our national cultural security. 2 National cultural security is a system of policy processes with rich connotations and broad extensions. There are many policy options and strategic considerations in establishing such a system in its entirety. In the context of globalization, a cardinal rule should be to always choose wisely what to do and what not to do and formulate cultural development strategies that put national interest first. Globalization is a process guided and driven primarily by the U.S.led Western capitalist countries in the developed world. In the name of equal competition, international trade strategies in favor of such countries are implemented, essentially imposing international economic rules and regulations laid down by this group of powers on the global community. After the Second World War, the Western group of countries led by the United States formed international economic organizations and drew up economic rules and regulations to protect their vested interests. Because of their dominant position in postwar international economic activities, these rules and regulations remain a basis for economic exchanges and trade contacts between all countries in the world. While encompassing and reflecting the universal demand of the postwar international community for common progress and economic development, they were all based on the goals and social conditions of Western developed countries. They were formulated according to their common interests and value judgments in the context of the entire Western culture; some were even designed during the Cold War for the needs of that specific period. As a result, these rules and regulations mirror not only the material values and global interests of the Western developed world but also their cultural

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values and fundamental cultural interests in a profound way. For countries that fall economically and culturally behind, enforcing such rules and regulations would indicate the surrender of national sovereignty to some extent. The cultural and economic interests of such countries would certainly take a massive hit, leading to the sacrifice of their national cultural sovereignty and decision-making power. As a developing country, China remains in the primary stage of socialism, with its economy and culture still underdeveloped. In addition, China did not fully integrate itself into the international economy and culture during the Cold War, not to mention participating in the formulation of international and global economic rules and regulations. Over the past twenty years of reform and opening-up, China has narrowed its gap with the rest of the world in terms of economic and cultural development. However, as the socialist market economy is still getting off the ground, there is still a long way to go before it reaches maturity. Many fields of development, especially the cultural economy and cultural industry, are going through a transitional process. To grow faster, we need to obtain the necessary capital and technology from the international market. This is a major constraint on the development of China’s cultural economy and cultural industry. Whether in China’s re-entry into the GATT or the negotiations over its accession to the WTO, the Western interest groups led by the U.S. had been charging China exorbitant prices, asking the country to assume more rights and obligations than a developing country could possibly bear. A sinister motive is to force China to trade its sovereignty for development and sacrifice its fundamental interests in exchange for limited “preferential treatment.” Ultimately, they could threaten to control and destroy the country strategically without ever going to war. Globalization is a double sword, and cultural globalization is an even sharper sword. While it brings you unlimited opportunities, it also sets endless traps. There are such lessons to be learned in many developing countries. Therefore, in terms of certain fundamental strategic issues concerning the development of China’s cultural industry, we should not rush into anything when the conditions are not available or not yet ripe, nor should we loosen the “floodgates” that should be kept in place. We must formulate an independent national strategy for the development of the cultural industry in light of our national conditions and cultural traditions. We should not abandon our national individuality in pursuit of

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globalization or change the cultural and economic systems and management systems that are in line with our national cultural conditions for the sake of joining the WTO. Whether it is the growth of the industry itself or the establishment of its systems, the cultural industry in China is still a nascent field combining culture and economy. Everything is still fragile and immature. In such a new and promising field, we should proceed from the fundamental interests of the nation and the long-term interests of the cultural industry and grow it into an industrial system that carries forward the fine cultural traditions and values of the Chinese nation. If we allow cultural “Titanics” of various forms to land in the cultural market of China for the sake of short-term interests, we will lose not only the box office but also the entire cultural foundation on which China’s cultural industry relies for development, state sovereignty over the cultural industry, and the true protection and ownership of the fundamental cultural interests of the Chinese people. Therefore, we should always choose wisely what to do and what not to do, put national interest first, participate prudently in globalization, and carefully choose the areas in which the cultural industry is involved. National interest is at the core of all national strategies. They combine the various factors created and maintained by a country for the common survival and development of the majority of its population and embody the need and will of a sovereign state to survive and thrive. As the political scientist Hans J. Morgenthau put it in the Dilemma of Politics, the ultimate language of international politics is about national interest as long as the world of politics is made up of states. Based on its thoughts on national interest, China pursued the national strategy that international relations should be handled in accordance with ideology and the social system during the Cold War. Although ideology will continue to make up a considerable fraction of China’s national interests in the future, overemphasizing its importance, or, even worse, seeking sheerly ideological interests, will produce harmful consequences. There have been cautionary tales in this regard in the history of Chinese socialism. Therefore, when the Cold War was over, Deng Xiaoping suggested a new way of thinking. He believed that relations between countries should be considered primarily from the perspective of their own strategic interests, regardless of differences in social system and ideology. In 1991, another new principle was proposed by Jiang Zemin, namely, that state-to-state relations should be guided by national interest rather than ideology. They

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have both elevated the issue of national interest to a strategic level. It was a post-Cold War shift in China’s fundamental way of thinking and policy paradigm on the relationship between national interest and ideology, which is to prioritize the interests of the overwhelming majority of the Chinese people. Of course, downplaying the role of ideology in stateto-state relations does not mean that ideological interests are no longer important. Ideological issues concerning the fundamental interests of the state, including national values such as democracy and human rights, still shape state-to-state relations in today’s China. One advisable approach is to play down the role of ideology on one issue and attach importance to it on another. We should know when to uphold principles and when to make a concession, as well as what to do and what not to do. The criterion for distinction is whether doing so is in accordance with China’s national interests. This approach applies to both politics and the development of national cultural industries. For a period of time, however, there had been tensions between the central and local governments, between different local governments, between ministries and local governments, between various ministries, between the state and communities, and between governments and individuals in dealing with a range of industrial policy issues in China. Examples include the choice and layout of strategies of cultural industry development, the extent of management authority and functional distribution in the cultural market, the diversification of cultural investment entities, and market access. In addition to difficulties created by system changes, one important reason was the absence of a cultural awareness and public opinion that put national interest first. This is why local, small group, and individual interests were pursued at the expense of the fundamental cultural interests of the state. Piracy, trafficking in pornography, and corporate cultural smuggling were rampant. Worse still, many domestic companies tried to undercut each other and force up prices in international cultural trade for the sake of their own temporary interests, allowing outsiders to reap the profits. Eventually, they were used and controlled by foreign interest groups and cultural forces, especially those in the West, resulting in a major loss of national cultural interests. It is this passivity that seriously threatens the development of China’s cultural industry and, in some cases, its survival, causing serious cultural security issues.

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When we talk about national interest and national cultural interest, we should take into account not only international relations and international cultural relations but also domestic politics and domestic culture. The belief of citizens in the national interest is an essential condition for the national political and cultural system to survive and develop. It also completes our understanding of the security of national culture and national cultural industries. To participate in economic globalization, therefore, is not to fully liberalize the economy or industrial development regardless of national interests, which should always take precedence over any other interest in a market economy. There is no multinational corporation in the world that seeks to maximize profits at the cost of the fundamental interests of its host country. This is driven by a sense of cultural identity. As explicitly declared by the American financier George Soros, globalization is essentially global capitalization. The United States, for example, is a country that speaks most frequently about national interest on the global stage. To safeguard its own national interests, it might even forcibly expand its western border, be it political, economic, military, or cultural, to any part of the world. Foreign policy can never be effective without cultural considerations. This is a general principle followed by the United States and a cultural strategy adopted to push cultural globalization. To protect its national interests, especially cultural interests, China should draw inspiration from such a strategy to establish its own one. Only in this way can the country ensure the security of its cultural industry. 3 The overall cultural strength of a nation is increasingly a key parameter and force in the balance of interests between countries, as culture itself has become an important component of national interest. The development, control, monopoly, and utilization of culture, entire cultural industries, and cultural markets, as well as cultural penetration and reverse penetration and cultural invasion and counterinvasion, have become part of what countries vie for against the background of globalization. To ensure national cultural security, China has to learn how to effectively safeguard its cultural traditions, develop cultural industries, and protect its culture from erosion and colonization. At the same time, it should continue to expand foreign cultural trade to obtain the capital, technologies, and

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market share it needs from the international market. In my opinion, setting up an active early-warning system for national cultural security and implementing appropriate access to the cultural market and cultural industry should be another important strategy for China to pursue on this issue. Economic dominance leads to cultural dominance and thereby cultural hegemonism and power politics. This is one of the characteristics of globalization. When such a dominant force moves with the global flow of capital and technology into the major economic fields of a sovereign state, it gives rise to cultural power. Driven by a desire for cultural monopoly, this force will then infiltrate into the cultural market of the country in various economic and cultural forms and potentially interfere in its internal affairs. Once such a force meets hegemonism and power politics, it will be quickly materialized into an end instead of a means. In the 1990s, the U.S. government used the issue of intellectual property repeatedly to pressure the Chinese government with trade retaliation. It was an attempt to politicize intellectual property and use it as an excuse to force American cultural commodities and industries into China’s cultural market and to suppress its fledgling cultural industry. Meanwhile, unlike politics and economy, culture is capable of transforming people’s mental outlook and shaping their inner world. When the values and ethical ideals conveyed by an economic force are deeply manifested in its cultural economy and products, such cultural economy and products will become a symbol of its cultural power and a strategic weapon used to export cultural perceptions, values, and moral principles. In doing so, this force will control the economy of a disadvantaged sovereign state and occupy its cultural and mental world. This is exactly what the United States is trying to achieve with the help of globalization and its well-developed cultural industry and media industry. In other words, cultural globalization is dominated by American values. Globalization and cultural globalization pose a real threat to the cultural sovereignty of a nation by affecting its cultural industry and the inner world of its people, thereby having a profound impact on its cultural security. As a result, many countries and groups of countries in the world, even developed countries in the West, have turned to cultural protectionism and established preventive mechanisms to protect their own national cultural interests. In France, for example, television and radio programs are required to use the French language at least forty percent of

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the time, and of all films screened in the 4,500 theatres nationwide, Hollywood films are allowed to make up no more than a quarter. The purpose is to protect the French cultural industry by restricting and even resisting the sales and dissemination of American cultural and entertainment products in the country. In 1999, following the expulsion of the country music television—an American country music video channel—from Canada in 1995, the Foreign Publishers Advertising Services Act, also known as Bill C-55, was introduced in the country to help protect Canada’s periodical industry. Bill C-55 effectively prohibits foreign publishers from selling advertising in foreign journals published in Canada; otherwise, they would face heavy fines. The country succeeded in eliminating American periodicals and magazines by cutting off its financial resources in Canada, thereby keeping the domestic cultural industry safe. As seen from the above, France, Canada, and the European Union (EU) as a whole recognize that culture is a vital issue concerning our identity, values, and differences and have developed a policy system to safeguard their own cultural industries. Can China, a country whose culture differs greatly from that of the Western mainstream, remain culturally defenceless? However, the problem is, driven by an eagerness to overcome poverty economically and culturally, to achieve modernization and to participate in globalization, we hastened to reverse the unhealthy cultural ecology resulting from the ideology of the Cold War, seeing the success of the West as the only frame of reference. We let our cultural defenses down and awareness of national culture and the national cultural industry fade away as we failed to remain vigilant about cultural risks. A direct consequence is the current crisis in the development of China’s cultural industry. To be more specific, the structural effect of cultural neocolonialism on the upstream industry has placed the nationalization of the cultural industry under serious threat. In 1983, Deng Xiaoping proposed a countermeasure against the possible harm of this cultural threat: “Marxism must be used to identify, analyse, and criticize the ideological content and manifestation of things in the realm of culture.” He warned that “the future of the Party and the country is at stake” and that “if we fail to pay prompt attention and take measures to curb it, and instead let it run wild” and “the consequences could be dire.” Later, Deng Xiaoping proposed that we should prevent leftist tendencies and guard against rightist ones. In addition to advocating the construction of socialism with Chinese characteristics, he essentially raised the issue of national cultural security in the fields of

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ideology and culture and suggested setting up a system to identify and warn against such an issue. His excellent strategic thinking and valuable insights, however, were not given due attention, let alone utilized correctly. The outbreak of the 1997 financial crisis in Southeast Asia has taught people a profound lesson that the lack of a sound security mechanism and an early-warning system is a recipe for crisis. This applies to cultural security as well as economic security. In the face of the challenge of cultural globalization dominated by Western powers with distinct features of neocolonialism and the cultural costs we have paid and are still paying, China needs to establish a sound and active early-warning system for national cultural security in developing cultural industries. Otherwise, the tragedy that happened to some developing countries whose national cultural industry was overwhelmed by globalization—essentially the suppression of American cultural products—will likely repeat itself in China. “The film industry in the Chinese mainland is now facing a ‘lifeor-death’ situation. I don’t know if there will be any films of our own ten or twenty years from now,” Chen Kaige said with some despair at a film conference in Chengdu. At that time, an average of ten American films were being imported into the mainland each year, which accounted for sixty percent of the mainland film market. “We have no counterweight, not even a fence to keep them off,” said Chen. One cannot help but think of Microsoft’s evil scheme to suppress China’s information industry by making its people addicted to piracy and then to hold them liable for copyright infringement and the severe survival crisis faced by the audio-visual products industry of the country due to repeated piracy. Chen’s words were surprising but by no means alarmist. He pointed out the severity of the cultural security issue faced by the country and the eagerness of its cultural entrepreneurs to build such a “fence” to block intruders. To establish an early-warning system that ensures national cultural security, we must conduct an extensive investigation and analysis of the basic conditions of China’s cultural industry before drawing a security line for its development in the context of globalization. We should analyse the flow of cultural commodities in the international market and possible threats to China’s cultural industry and market as such commodities enter the country through various channels. What calls for special attention are adverse trends that may lead to disastrous consequences. Timely and accurate forewarning responses can thus be made, and the applicable

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national mechanism can be initiated. Using legal, administrative, market, economic, and other means of cultural security management, we will be able to identify cultural factors and forces that may jeopardize China’s national cultural security and cultural industry development. Those that are in the national interest or contribute to the development of our cultural industry shall be recognized and supported, whereas those that do not conform to or even seriously infringe upon or go against China’s national cultural interests and greatly endanger the national cultural industry shall be resolutely rejected, struck down, and destroyed. In doing so, the level of threat to the survival and development of Chinese culture and cultural industries will be kept below the security line. The success of Microsoft’s copyright scheme is a lesson China learned the hard way. It is worth pondering why the smuggling of audio-visual products in China was rampant despite continuous crackdowns by the Chinese government. It requires us to proceed from our national strategy for cultural development, build a management system and early-warning center, and organize specialized agencies and personnel to thoroughly and meticulously observe, analyse, and research aspects that might imperil cultural security. The outbreak of any form of cultural security crisis follows a process from brewing to developing and then to expanding. By monitoring this process, targets and entry points can be identified for day-to-day regulation of the cultural sector. We should therefore create a scientific monitoring model, a sophisticated early-warning system, and an extensive emergency plan to integrate national cultural security, an important part of national security, into the legal system. In this way, a complete and efficient system for maintaining national cultural security, a sound system for managing the import of cultural commodities, and a mechanism for overseeing the development of cultural industries and operation of cultural markets will be established; a technical system of risk assessment and management for investments in the cultural industry, as well as systems and standards for monitoring the cultural ecology, will be developed. The ultimate goal is to reduce potential harms to Chinese culture and cultural industries caused by globalization to a tolerable limit and ensure a favorable environment for the national cultural industry. China should pay enough attention to the fact that globalization is a threat to governments with inadequate capacity or a lack of regulatory and early warning mechanisms. Once cultural security is compromised in such a large developing country, its sovereignty undermined and industries affected, a simple readjustment of cultural policies will not suffice.

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Therefore, the Chinese government must always take the initiative to ensure national cultural security by setting up an early-warning system and developing its cultural industries. Globalization is another extensive international redivision of labor. As a result of it and its manifestation in the cultural field, cultural globalization is a profound redistribution of global cultural resources and reorganization of the global cultural market and cultural industry. It will revolutionize both global culture and the global cultural industry. The status of a country in the future global cultural market and international cultural trade, as well as how much initiative it has in maintaining its cultural security, is largely determined by its understanding of and participation in cultural globalization. Transnational cultural financial capital and the global flow of commodities go beyond national borders and, in a way, weaken the cultural sovereignty of a country. Being a part of that process does mean some surrender of national cultural power, sovereignty, and interests. A country must strategically evaluate and determine the extent to which it should allow globalization and market economy to be achieved at home before opening-up its cultural market and giving away part of its power and rights. In today’s world, it is impossible for any country to fully develop without participating in international economic and cultural activities and the process of globalization. There is, after all, no true economic and cultural strength or cultural security for a country in isolation. China, in particular, still falls relatively behind in terms of economy and culture. It has yet to leverage international capital, technology, and markets to strengthen itself and learn from the world’s most advanced civilizations to facilitate its own development. Given its bitter historical lessons, it is obviously not a proper cultural attitude or strategic choice to stay out of globalization. To build an early-warning system for national cultural security is not to engage in cultural exclusivism. Instead, we should proceed from the fundamental cultural interests of the country, choose wisely what should and should not be done, and implement appropriate access to the cultural market and industry in accordance with the needs of cultural industry development. On the premise that the government keeps a firm grip on the cultural sovereignty of the state, we can selectively, systematically, actively, and appropriately introduce international cultural and financial capital and cultural commodities to develop and restructure China’s cultural industry and meet the growing demand of the people for cultural consumption. We should establish a sound legal system for culture and,

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by following the principles of the GATT and the WTO about the liberalization of cultural investment, loosen control over the right to operate in cultural industries and markets to a proper extent as required by the development of the cultural industry. All kinds of international cultural financial capital and multinational cultural groups will be allowed to engage in the lawful operation of cultural industries within the territory of China and within the scope prescribed by the Chinese Constitution and laws. This approach brings in not only sophisticated management techniques from overseas but also a competitive system that helps promote cultural restructuring in the country and accelerate the modernization of its cultural industry. In this process, a win–win mechanism should be established by relaxing restrictions on areas that are ready for openness and giving away some of our cultural rights on an equal footing with confidence and an open mind. In addition, space and time are equally important factors when implementing the principle of appropriate access. It has to be a stepby-step process where we develop one area at a time as it reaches maturity instead of adopting a one-size-fits-all approach. Much more research is needed before we determine the specific operational mechanism, procedure, and standard of such a major strategy and policy. However, as an organic whole, appropriate access is a necessity if we want to determine what to do and what not to do. It is indispensable to create an active system that safeguards national cultural security and to formulate strategies for cultural industry development. 4 With the general upsurge of demand to safeguard national interests, the sentiment of nationalism can be easily aroused in sovereign states by the threat of globalization. This is especially true when developed countries in the West and their multinational corporations, or international organizations dominated by them, intervene in and infiltrate into the culture of sovereign states as an alien supranational power. They inhibit the development of cultural industries, control cultural decision-making power, and limit the cultural sovereignty of a country, leaving it powerless to regulate the domestic cultural market and exercise its cultural sovereignty. In this case, nationalism, as an ideology highly effective in mobilizing people, can indeed act as a cultural and political force that

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affects the choice of strategy for national cultural development and policy preferences in maintaining national cultural security. However, nationalism is a double-edged sword. Under certain conditions, it is truly an important policy to safeguard national cultural security and a major force that resists the invasion of foreign cultures. However, narrow-minded nationalism can lead a country to disaster. As economic globalization has affected the whole world, it is impossible for any country to practice narrow nationalism and develop its own culture behind closed doors. This is because modern means of communication made possible by high technology are able to spread any culture in the world to the most remote corners, exerting a profound influence on the reproduction of ancient and traditional cultures. More importantly, the galloping progress of information superhighways and network technology is fundamentally changing the composition of the productive forces of human society and the means to create wealth. As Alvin Toffler, author of The Third Wave, once put it, “[t]he whole world belongs to the one who masters information and controls the network.” His prediction is now coming true in the form of an international power shift. The ability to possess information is becoming an increasingly important measure of modern social development. Whether at a spiritual or industrial level, culture will always epitomize the ability of a country or nation to acquire, respond to, and control information, as well as the depth and breadth achieved. It is very difficult to truly maintain national cultural security if we cannot advance culture and its industrialization at the same pace as the development of modern high technologies. In military strategies, the best way to protect oneself is to destroy the enemy. Similarly, to fundamentally maintain national cultural security in the context of cultural globalization without causing harm to contemporary Chinese culture, it is necessary to strategically adjust our cultural industry policies. Domestically speaking, in addition to appropriate access to the cultural industry and market, we should try to facilitate the privatization of cultural industries. In the international cultural market, we should take the initiative to conduct international cultural trade and take an active part in market competition. Under the guidance of positive nationalism, we will incorporate the maintenance of national cultural security into a broad, dynamic, and competitive system of cultural industries, which means we will defend national cultural security while making positive headway in culture. The cultural industry is a form of culture reflecting the progress of modern civilization. It is not only a materialized, scaled, marketized,

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and modernized means of production, circulation, and consumption for all original spiritual products of a country but also an important source of material wealth in modern society and a pillar industry in the modern national economy. For example, in the United States, the copyright industry built around the cultural industry was worth 238.6 billion U.S. dollars in 1993 alone, accounting for 3.7 percent of its GDP. In Germany, the turnover of Bertelsmann—a media, services, and education company—in 1997–1998 reached 25.7 billion Deutsche marks, of which sales in book publishing and clubs totaled 7.3 billion Deutsche marks. Meanwhile, in Britain, art was an industry worth 17 billion U.S. dollars, on par with the auto industry and accounting for twenty-seven percent of revenues from tourism. Compared with these developed countries, however, China’s cultural industry remained weak and underdeveloped. In 1996, for example, the added value of the culture and art industry was 21.18 billion yuan, accounting for only 1.04 percent of the total added value of the tertiary industry and an even smaller percentage in GDP. China is a large country with rich cultural resources accumulated over five thousand years ago, giving it unique advantages in developing cultural industries. However, for a long time in the past, we failed to see them as valuable social and economic resources. We have managed only to develop and utilize them in social undertakings for the purpose of protecting and inheriting excellent cultural and artistic heritage. As a result, the scale of China’s cultural industry remains small in proportion to its abundant cultural resources. This has led to the full-scale invasion of many aspects of its culture, including values and philosophies, academic discourse, and cultural industries, by the cultural imperialism and hegemony of Western powers led by the United States. Such industrial colonization constitutes a real issue of national cultural security, reminding us that lagging behind leaves one vulnerable to attacks. In the context of globalization, this is true not only in the political, economic, military, and scientific senses but also in the cultural sense, especially in the cultural industry, which epitomizes the combination of the modern economy and science and technology. The development of cultural industries is a direct reflection of the modernization of cultural creation and communication in a country. Without a system of cultural industries that accommodates strong economic growth and political stability, there is no way for culture to provide intellectual support for the economy and politics. To protect the

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cultural industry from constant attacks, it is necessary to strategically readjust national industrial policies and formulate national strategies for the cultural industry. In the establishment of a new system for creating wealth by integrating economy and culture, China should build a network of cultural industries strong enough to keep out invasive Western cultures and their commodities, thereby safeguarding national cultural security. This requires a major update to our policy thinking and philosophy. Culture should no longer be viewed as merely a front for class struggle in the ideological sphere. (This kind of idea is still a serious obstacle to the development of China’s cultural industry.) Instead, we should enrich a fresh understanding of culture as an important symbol of the overall strength of a country and the strategic adjustment of cultural industry policies as a major step toward the formation of such a symbol. In doing so, culture will become not only a new economic growth point for China in the new century but also a new force that helps maintain national security. The cultural industry is an industrial system characterized by the production, exchange, and consumption of spiritual products. It is a massive system covering arts and culture, journalism and publishing, radio and television, film, audio-visual products, entertainment, copyright, and performance. To implement national strategies for the cultural industry and maintain national cultural security within such a huge and complex system, we cannot rely solely on the state. This is particularly true, as China faces immense market pressure upon joining the WTO and the ensuing profound impact on the national cultural industry. Worse still, the government alone cannot address the insufficiency of capital, technology, manpower, and management that has long plagued China’s cultural industry. To maintain long-term cultural security and stability in the course of modernization and create a favorable environment, we have to draw support from the private sector to formulate and implement strategies for privatizing the cultural industry. The responsibilities and services that have long been assumed only by the state can now be transferred to the private sector. By harnessing the power of the people and perfecting the policy system of the cultural industry that focuses on diversifying investment entities, as well as restructuring cultural investment, nongovernmental forces that help defend national cultural security can be formed. A key issue here is to allow legal entities outside the cultural system, including consortiums, enterprise groups, and foundations, to operate

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key cultural industries, including newspapers, book publishing, and television, in the domestic cultural market. Although private access has been achieved to varying degrees in a large range of industries, such as culture and entertainment, art dealing, book and newspaper retailing, audio-visual products, and performance, there is still room for further opening-up in the core areas. It is also in these areas that the country faces the greatest challenges and pressure, as seen from the move of some multinational cultural groups to set up offices and investment companies in Beijing. From Warner Bros. to Sony Corporations, from Bertelsmann or Rupert Murdoch’s News Corp, none of these companies has come here solely for cultural exchange. The huge Chinese market, with its endless charm and infinite business opportunities, is the last virgin land in the world of which everyone wants a slice. The privatization of the cultural industry does not mean that the whole industry will be privately owned, but rather the investment in its key areas will come from diverse channels, including the society and the public. A system of national cultural security will be built with the help of public cultural forces. In this process, of course, the state must always retain control over culture. Privatization does not replace national cultural monopoly, nor does it place the pursuit of sheer commercial interests above social and cultural benefits. In China, state-owned cultural enterprises will still play a dominant role in the entire cultural industry and in safeguarding national cultural security. What role privately run cultural industries should play in promoting the development of culture and art is a common issue facing cultural industries around the world. The policies set forth at the Fifteenth National Congress of the CPC concerning the position and role of the nonpublic sectors in the present economic system at the primary stage of socialism should be an important guide and theoretical basis for us to understand and implement the privatization of the cultural industry. 5 The cultural security of a country is not only closely related to its cultural industrialization but also has an inevitable connection with the international trade of its cultural commodities. When a country’s cultural industry fails to provide abundant cultural goods and services to meet the cultural consumption demand of its own people and such needs must be met, the import and export trade of its cultural commodities will be

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in deficit. The larger the deficit, the greater the pressure on its domestic cultural industry, and the less secure its national culture will be. Such a trade deficit causes a huge loss of foreign exchange and limits the development of the cultural industry. In addition, it leads to a large number of foreign cultural commodities crowding out the domestic cultural market, which seriously impacts the cultural traditions, values, aesthetic tastes, and beliefs of the country and aggravates its cultural ecological environment. This is a far more severe existential threat to culture than the loss of foreign exchange. International trade in cultural commodities exerts a cultural influence not found in that of general commodities, which can be fatal for any country. As a result, U.S. trade representatives have remained tough in trade negotiations, especially in regard to intellectual property rights related to the import and export of cultural products, demanding a high price and barely budging. One major purpose is to infiltrate and occupy other cultures with American culture and values under the guise of trade liberalization and to ultimately win without a fight. Among all the factors that constitute the cultural security of a country, the international trade in cultural commodities has its own particularities. It is precisely because of this that neither Canada nor EU member states such as France advocated its inclusion in the framework for trade liberalization of the United States, whether in the negotiations between the U.S. and Canada on the North American Free Trade Agreement or in the Uruguay round of trade talks between the EU and the U.S. on intellectual property rights. At the same time, however, these countries were constantly broadening the international cultural market and spreading their culture and values while engaging in a trade war with the U.S. In addition to obtaining substantial foreign exchange earnings, they have managed to expand the space for themselves to survive and thrive in the international arena, thereby maintaining national cultural security amid fierce competition. However, confined by ideology for a long time, China had failed to see the positive role of international trade in cultural commodities in maintaining national cultural security and the huge business opportunities it may bring. In 1998, book sales in the country exceeded thirty billion yuan, of which the export value was only twenty million yuan, accounting for a mere 0.2 percent of the world’s total, while exports of the U.S., France, Germany, and other countries were several times or even tens of thousands of times more. Since 1992, China has been the world’s largest buyer of Russian copyrights while exporting almost nothing to Russia.

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How can we ensure the cultural security of our country with such a huge cultural trade deficit? As the Chinese saying goes, there are other hills where the stones are good for working jade. In other words, China should take an active part in international market competition, not only to bring in the achievements of others but also to vigorously export commodities, especially cultural commodities. We should reform the existing system for managing cultural trade with foreign countries, relax applicable policies, and push the strategy of developing international cultural trade. Meanwhile, the country should choose wisely what to do and what not to do. In terms of importing, we must keep ideology in check; in exporting, we should downplay ideology and highlight culture, focusing on disseminating the splendid achievements of the Chinese civilization and propagating our ideology by letting cultural output take its own course. While accelerating the reform of the system of foreign cultural trade, China will establish and develop its own large cultural groups and multinational corporations. The cultural competence and security of a country ultimately depend on the international competitive strength of its cultural industry, and its system of cultural security must be supported by its strong cultural power. In the era of globalization, only by taking a more positive attitude toward the world and making full use of the benefits of the international cultural market can China as a developing country give full play to its rich cultural resources. Only in this way can the country be internationally competitive and culturally secure at the same time. 6 Globalization has led to continuously intensifying economic and cultural competition worldwide. As a result, innovation awareness and capability are increasingly a crucial factor for seizing the initiative in global competition and enhancing the overall national prowess and international competitive strength of a country. Our ability to innovate is therefore key to maintaining national cultural security, especially when the practice of cultural hegemony by the United States is accompanied by intellectual hegemony. Through its monopoly on knowledge, and in particular its advantage in Internet technology, it has promoted its innovative web standards as a global standard. Through the Internet, it dumps its value standards, ideology, and social culture in all directions to the world at all

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times, forcing the relatively backwards developing countries to rely on it for innovation. In doing so, it further weakens and eliminates the ability of a country or nation to innovate. To counter such effects, a country has no choice but to enhance its national capability to innovate culturally, facilitate the overall development of its national system of cultural innovation, and perfect its intellectual property protection regime. It is an obvious choice for China in formulating strategies for cultural development and safeguarding national cultural security in the twenty-first century. Culture is the foundation of a nation, the embodiment of its wisdom and civilization, and a spiritual tie that holds its people together. The rise and fall of a country follow the ups and downs of its culture, the key to which is innovation. Innovation sustains the progress of a nation. A nation deprived of the ability to innovate is bound to be ignorant and fall behind, and it is impossible for such a nation to stand tall among the nations of the world. Therefore, former Chinese President Jiang Zemin made it clear that the capability to innovate concerns the rise and fall of the Chinese nation. It is a key indicator and the kernel of national cultural security. The development of a cultural security system relies fundamentally on a comprehensive national system of cultural innovation. Deficiencies in theoretical study and a lack of cultural innovation are major internal factors restricting the development of Chinese culture and contributing to China’s national cultural security issues. In the context of globalization, such deficiencies and weaknesses serve as a breach through which cultural imperialism invades and colonizes China. There have been few theoretical achievements and artistic works deserving the name of innovation and attracting global attention over the years. This is an important reason for the huge trade deficit in China’s foreign cultural trade, particularly its international copyright trade, as mentioned above. Facing changes in the global landscape after the Cold War, one of the most striking contrasts is between Huntington proposing the theory of the “clash of civilizations” and the lack of perspective in Chinese theoretical circles. For years, Western cultural products, including theories, thoughts, and blockbusters, have been flooding into China, stifling its cultural originality. The so-called Chinese innovations among new literary and art trends since the 1980s were almost all based on the various forms and techniques of Western modernism and postmodernism, including streams of consciousness, misty poetry, pansexualism, and the intervention of narrative subjects. All trending topics of literary and artistic

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criticism at that time, from existentialism, receptive aesthetics, poststructuralism, feminism, and postcolonialism to globalization mentioned here, were put in the context of Western culture. Even our best critics were only parroting views from the West. As a result, what should have been budding cultural creation has turned into voluntary replication and dissemination of Western cultural languages and values. Chinese cultural circles seemed unable to talk about anything without mentioning modernism or postmodernism, which was a new kind of ideological and cultural ossification. Our cultural originality was deeply weakened, and cultural modernization deprived of its impetus, leading to cultural colonialism in the country. Such a reality presented a cultural threat that pervaded all aspects of culture, from ideas to industries. How, then, was it possible for cultural products, be they spiritual or material, generated in such a cultural environment to gain a competitive edge and market shares in the international cultural market? How was it possible for these products to satisfy the growing cultural consumption demand of the Chinese people so that they would consciously resist the temptation of Western blockbusters? And how could they bring people together in the depths of their spiritual life and erect the “Great Wall” of national cultural security? Failure to do so could cause a cultural crisis severe enough to bring down a country or nation. It is easier to breakdown a fortress from within. Likewise, national cultural security is easily breached and destroyed from the depths of people’s minds and souls. To build a comprehensive system that safeguards national cultural security and promotes cultural innovation, we must first focus on the transformation and renewal of ideas and theoretical creations and overcome our dependence on modern Western culture. Based on rich intellectual and cultural resources handed down over thousands of years, we should integrate the achievements made by Chinese scholars in the past hundred years with all the great fruits of civilization in the world. With independence and free thinking, we will create new concepts, new theories, and new arts that are truly part of contemporary Chinese culture, establish a new way to study classical Chinese culture, and regain confidence in our national capability for cultural innovation. Only by fully acquiring the ability to innovate in terms of thoughts, ideas, theories, and systems of artistic creation in the metatheoretical sense can we provide support from every aspect, including ways of thinking, conceptual systems and theories, for the development and innovation of Chinese culture in the twenty-first century. In doing so, we inject passion

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and inspiration into the development of Chinese culture and cultural industries and assist in purifying culture, assimilating other cultures, and resisting cultural aggression. Ultimately, we will build a spiritual home for the progress and continuity of the Chinese nation and participate in cultural globalization with excellent and irreplaceable cultural and artistic products. Language is a physical form of thought. A nation that fails to create its own independent system of cultural concepts and artistic senses and instead relies on the language system of others to think will never be able to creatively surpass other cultures. Therefore, we should not slacken our efforts of cultural innovation, especially in the context of globalization, as we face the pervasive influence and challenge from Western cultural hegemony. Only by building innovative capacity right from the start can we offer plentiful resources for the development of China’s cultural industry and provide security in its true sense for Chinese culture to recreate the glory of the Axial Age—beginning approximately 530 BCE and spanning the Spring and Autumn Period and the Warring States Period—and bring back the prosperity of the Han and Tang dynasties. As a fundamental strategic choice in establishing national cultural security, building a national system of cultural innovation is a cultural project involving the whole nation. It focuses on the cultural innovation ability of every individual and aims to strengthen our collective capacity for cultural innovation, ultimately building and perfecting a national system of cultural innovation. To fundamentally and comprehensively improve the national capability of cultural innovation and overcome our dependence on Western culture, the following measures must be taken. First, we must advocate an ideal state of cultural innovation characterized by the spirit of independence and free thinking in China’s ideological and cultural circles and encourage people to make bold scientific explorations in the cultural sector within the scope of freedom of speech granted by the Constitution and laws. Second, we should show respect for all serious original works and safeguard the legitimate rights and interests of citizens in the field of spiritual and cultural creation by improving the system for protecting intellectual property rights and laying down strict punitive measures against infringements of freedom of speech and intellectual property rights. Third, all cultural policies and cultural laws and regulations that violate cultural democracy and cultural equality and perpetuate superpreferential treatment should be abolished; national policy input should be increased in the construction of a national system of cultural

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innovation; and necessary cultural and industrial policies oriented toward global cultural competition should be formulated. Finally, partnerships should be sought between governments at all levels, and more importantly, between departments of ideological management and those of culture and academia, and between public sectors and intellectuals and individual scholars, thereby fostering the exploration and innovation of ideas, concepts, and theories indispensable for building a national system of cultural innovation. In this process, the government serves as both a maker of national cultural policies and development strategies and an organizer and cooperator in the national cultural innovation system. Of course, the construction of such a system emphasizes not only the originality of cultural achievements but also their dissemination and industrialization. It is the only way to ensure that Chinese culture develops in a new and independent way, supported by national cultural security against the background of globalization.

2 The Power and Rights of the Cultural Industry As a force that helps reestablish order in China, the cultural industry is deeply affecting the modernization of politics, economy, society, and culture, shaping a form of power different from the traditional one in today’s China. The power of the cultural industry is associated with its rights, which leads to the following questions: How does the cultural industry possess power? Where does this power come from? Who gave it so much power? Where are the boundaries of cultural industry power? How can the rights of the cultural industry be defined, and are these rights inviolable? Do the objects of the cultural industry also have their own right to exist and develop? What is the fair and just distribution of power and rights of the cultural industry between the people, society, and the state? Whatever kind of justice is involved, these questions are in fact about the legitimate distribution of power and rights of the cultural industry and the fair representation of its rights. This relates directly to justice in the cultural industry, the driving force behind the movement of the industry itself.

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1. How the power and rights of the cultural industry came into being: Self-generation, conferring, and the objectification of people’s essential power The power of the cultural industry refers to its system of capabilities and power in which the industry influences and shapes the behavior of people, society, and the state. Power is a form of dominant force characterized by the ability to dictate to the object what they can or cannot do or compel them to do or not to do something. Rights, on the other hand, are an inherent form of force; they are legitimate, inviolable, and rightfully enjoyed by the subject. Cultural industry power is produced through two channels: selfgeneration and conferring. The former is a natural historical process, while the latter is a social historical process. Cultural industries are a system of spiritual activities that produce and provide cultural products and services to meet people’s demand for spiritual consumption. An important and initial motivation for human society to create such a system outside the systems of physical activities is to understand nature and the relationship between humanity and nature. People want to express and record this understanding through some tool and symbol for everyone to know and use it to establish an information system of humanity and nature, handle the relationship between the two, and properly define the new relationship between them. This is how culture comes into being. It is the so-called artistic and spiritual “appropriation” of the world explored by Marx. The birth of culture follows the beginning of people’s conscious production of symbolic cultural products, whether this symbol is carved, written, or made up of human body languages (music and dance, for instance). The advent of symbolic cultural products indicates that human society has entered the period of cultural identification. Such identification is marked by the emergence of a common system of cultural symbols, that is, by our shared perception of the world. It is this system that shapes people’s common way of life. Here, it represents the initial value, or intrinsic value,1 of human society. The birth of culture, therefore, plays a regulatory role, meaning it restricts the physical and spiritual behavior of

1 Tom Regan, The Case for Animal Rights, trans. Li Xi (Beijing: Peking University Press, 2010).

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people. Only with consistent behavior can people manage the relationship between humanity and nature, and only by doing so can each individual survive. The norms established through accepting and following such a system of symbols become a conscious choice for each individual. In this process, everyone gives up certain individual rights, leading to the formation of cultural power. Such are the two sources of cultural power: one is extended from natural power as the relationship between humanity and nature takes shape; the other is a process of social and historical generation after people recognize the legitimacy of this natural extension and give up some of their individual power, also known as the extension of social material power. In an organic way, cultural power integrates these two aspects. In this sense, it is the product of initial distributive justice and falls into the category of state power. Everyone is equal before cultural power. The cultural industry is an extension of this power. Hence, theoretically speaking, everyone is equal before cultural industry power. This is also the inherent value of the principle of distributive justice in the cultural industry. In the natural generation of cultural industry power, its influence is formed through the production, consumption, and circulation of products, while social generation refers to the power of policies, or a political force, created after its history is recognized. The fact that not everyone is qualified to be engaged in the cultural industry is an exemplification of such power. However, these two kinds of power are an extension and expansion of human capacity and thereby the living embodiment of human power and rights. They represent our will to power. The former is an extension of mankind’s artistic “appropriation” of the world, while the latter is an extension of our ability to control, shape, and manage the world. As far as its intrinsic value is concerned, the cultural industry is the product of the development of social productive forces. However, since each new cultural industrial revolution comes with a call for justice in the distribution of rights, every such revolution, or the birth of any new form of cultural industry, is accompanied by a profound movement for justice in the redistribution of power and the restructuring of rights and interests. The emergence of online gaming products and their industries satisfies people’s desire to grasp the past and future in a way that transcends time and space. They have turned what used to be symbolic formation by means of association and imagination into participatory formation and reshaped the world of objects during this process. In addition, in this way, one objectifies and projects their own essential power into the world,

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specifically the virtual world, and ultimately takes control of this essential power. The power of the cultural industry originates from the influence of cultural products on people, society, and the country, which is formed through the deconstruction and construction of people’s inner world. The choice and formation of all forms of thinking, feeling, and living are governed by the structure of one’s inner world and that of driving forces behind it. Any change in these two structures will lead to greater changes in the relationship between people and society and between people and the state. Early in the Spring and Autumn period, Confucius discovered the power of cultural products over the relationship between people, society, and the state and proposed a famous theory about the social functions of literary works. He argued that they can be used to stimulate (the mind), to observe (social politics and morality), to unite (people), and to criticize (the reality). In addition, the truth you learn from them can help you honor your parents and even serve the leader of your country. Therefore, when a system, namely, the cultural industry, is created out of the production and supply of cultural products, a form of power will follow that affects people, society, and the state in a systematic way. In addition, that power is the power of the cultural industry. It is a constructive power that influences and controls the development of people, society, and the state. Whoever owns this power owns the future. As Mao Zedong once said, public opinion must be created before a regime can be overthrown. The cultural industry is such a tool to create and control public opinion; whoever owns it controls the power of public opinion. Here, the power of the cultural industry and that of public opinion share the same structure. The cultural industry is highly capable of interfering in people’s social lives and will develop into a form of power once it is manipulated in an organized way and affects the social behavior and value judgment of people. Politically, this form of power can guide public opinion, create political pressure, and become a tool to subvert state power. Culturally, it guides our values and aesthetics, creates a certain sociocultural environment, and aids in the subversion of the social value system, thereby changing the sociocultural perspective and turning it into a means of initiating a revolution. Based on the overall needs of social development and the all-around development of people, it is necessary to exert institutional restrictions on the cultural industry to ensure the healthy development of a society. Naturally, the real purpose of the pursuit of cultural rights is to compete for and control cultural industry power. The demand for

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cultural rights is essentially a call for the redistribution of such power. By fighting for the just cause of cultural equity, one is actually seeking the equity and justice of power distribution in the cultural industry. Here, the rights of the cultural industry are based on a set of values different from that of cultural industry power. The former is therefore against the latter in nature. In terms of its natural generation, the power of the cultural industry falls into the category of state power. Since the cultural industry is essentially a way for people to understand the world and express how they perceive it and a form of cultural and spiritual existence for a person, its rights should be enjoyed by every individual. In other words, cultural industry rights are natural and historical rights. People, however, do not understand and express the world around through the material expression of the cultural industry but through its content, namely, cultural products, be they spiritual or material. These products are then consumed by people and affect the way they think and behave, meaning they are able to influence and even dominate people. In this process, those with a greater production capacity of cultural products possess more power of control over the spirit and culture of others. As the core of cultural industry power, cultural products dictate the spiritual and cultural behavior of people. It is therefore one of the most important manifestations of social power for human society and state power for modern states to control the production of cultural products. Such elements as the market access and policies of the cultural industry and cultural censorship have thus become a form of control over the production of cultural products and thereby the cultural industry. It’s one force exerting control over another. With the emergence of this form of control, cultural industry power turns from a natural power to a social and historical one that is significant in modern states. As a result, the cultural industry splits from a unitary form of power into state power and private power. State power is controlled by the state, while private power is shared by society. If you control production, you control expression, and if you control expression, you control the way in which people grasp the world and the possibility of doing so. Such grasping is the most important form of power that helps people understand and change the world. To control such grasping, therefore, is to control the ability of people to understand and change the world. The necessary mechanisms for the progress of human society must be brought under control, as progress is impossible if society is left unchecked in its jungle state.

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Therefore, the question is not whether to control or not but how, to what extent, and what kind of control is necessary for the progress of human society. To control one’s social power is to deprive one of some of their power. The deprivation of a certain part of human rights is essential if it contributes to the overall progress of human society. If, instead, it is not conducive or even goes against the overall progress and development of human society, then such deprivation constitutes a violation of human rights. The difference is whether it maximizes the activation of individual creativity, that is, whether the innate creativity of each person has been given full play or maximum expression. The ability and degree of expression, as well as the depth and breadth of the space for expression, epitomize one’s spiritual and artistic grasp of the world, namely, the ability to understand and change the world. Freedom of expression is therefore the most basic and inalienable right and power of human beings at any time. For the sake of collective justice, individuals may yield some of their rights and power to form state power. However, this does not mean that they should be deprived of the most basic natural rights as holders of social rights. Here, natural justice is inextricably interwoven with social justice. One’s rights go hand in hand with one’s responsibilities; the right to freedom of expression and responsibility for one’s speech are no exception. Any subject of rights, while enjoying sufficient freedom of expression, must bear the corresponding responsibility for their speech, including the moral and legal responsibilities stipulated by the Constitution and applicable laws. There should be mutual respect between different orders. The order of human relations observed by a society, for example, is the bottom line of that society that deserves the most respect. Naturally, freedom of expression should never cross that line. One has to take on as many responsibilities as one enjoys rights. Hence, freedom of expression and responsibility for one’s speech should be highly unified. No subject of rights should have immunity. This, of course, is an essential part of cultural industry justice. 2. Power and Rights: Imbalance and counterpower The form and size of cultural industry power vary with the form of cultural industries themselves. Such power is not evenly distributed, meaning that different cultural industries produce different influences

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on people, society, and the state as a whole and intervene to varying extents. This leads to discrepancies in cultural industry power and thereby various life cycles of such power. Generally, the size of this power is positively correlated with the effect of the cultural industry on the spirit and ideology of people, society, and the state. As a result, there is a negative correlation between the power of the cultural industry and the social realization of cultural industry rights: Cultural industries with greater power have less access to the market, and those with less power enjoy greater access to the market. Based on this general relationship, the degree to which justice is achieved in the cultural industry hinges on how this pair of contradictory factors are converted to one another. Our determination of the size of cultural industry power is largely subjective, as it is closely related to society’s overall perception of this power in a certain historical period. To end the unfair distribution of power in the cultural industry, we must first reestablish how we measure the size of such power in our perception and awareness and increase the extent to which such power can be converted to cultural rights and vice versa. Take works of art and the art industry as an example. As a material expression of the cultural industry, artworks are valuable in that they are able to generate wealth and power. When turned into a symbol of wealth, they can be exchanged for power. The monetary value of art equals the size of its power. The wealth associated with art can be turned directly into power so that wealth itself becomes a form of power, hence the power of art. This is why art can be used as a bribe. This is rarely the case in other cultural industries. (Here I classify cultural relics as works of art.) Art collection prevails in times of peace and prosperity. On the one hand, the demand for cultural consumption increases because people live and work in peace and contentment. On the other hand, the need arises for art as a tool of power exchange. Therefore, the life cycle of power in the art industry often follows the cycle of prosperity and chaos. Unlike other cultural industries, the art industry rarely fluctuates with the rise and fall of other cultural industries, although art is sometimes not without its ideological problems. For example, erotic paintings in ancient China were often banned for vulgarity and lack of taste, and art from the Renaissance and the French Revolution was often used as a rallying cry for revolution. However, compared with cultural products such as books, news, and publications, the ideological issues of artworks are often overshadowed on the whole by its artistic quality and value added, giving it another kind of cultural industry power. As a result, the art industry,

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in a sense, has no market access restrictions. In other words, those who want and require access to this industry will be granted the right to practice and manage. People enjoy maximum cultural industry rights in the art industry. What prevents individuals and organizations from entering the industry are often nonideological constraints. This is a characteristic not found in other cultural industries and precisely the reason for the enduring vitality of the art industry as an ancient cultural industry. For the performance industry, another ancient cultural industry, it is quite a different story. The power of a cultural industry depends entirely on the social utility of its products. In this regard, art is fundamentally different from television. The social utility of art is reflected more in its investment value. The investment value of a work of art is determined by its artistic value, irreproducibility, and scarcity, but people tend to forget this. The social utility of the television industry, on the other hand, is manifested more prominently in its value in shaping social spiritual order, in addition to its investment value. In terms of the total number of consumers, the art industry can be regarded as a niche industry, while the television industry belongs to the mass market. The extent of their social influence is a decisive factor for the distribution of power and rights in the cultural industry. Generally, the more value a cultural industry has in shaping social spiritual order, the greater its power will be. Value itself, however, can be both positive and negative. When the negative value generated by a certain type of cultural product exceeds the level acceptable to a society in building itself and rebuilding its order, the state may have no choice but to limit the cultural industry power created by such products and even ultimately deprive it of its power. This is what we call the cultural policy of restricting power by means of power. Typical cases can be found in the way administrative authorities of China’s National Radio and Television Administration (NRTA) have been handling talent shows such as Super Girls and dating shows such as You Are the One since the beginning of the twenty-first century. It shows how the power and rights of the cultural industry run counter to each other, underneath which lies a profound conflict between the justice of the market economy and that of the cultural industry. In competing with their predecessors over the production and distribution of television content, the new generation is essentially seeking the right to fully express its own personality by obtaining a new kind of power. However, when this right is presented live on TV, it is actually about the satisfaction of the desire for power. However, as a matter of fact,

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this power and right is not enjoyed by individuals. Television producers and presenters are merely employees of such power and such a right; the real owner of and entity that exercises this power and right is the television network itself, which I refer to as the public entity or public right holder. However, is the network content with the rights and power it now possesses? The answer is no. There is no end to the pursuit of power for any organization or person. Behind any competition in the cultural industry is a contest for power and rights. The purpose of subverting traditional beliefs is to establish a new belief and to cultivate and organize their own “followers” in this way. With the help of these followers, they will then create space for new cultural industry rights and establish the authority of new cultural industries. This is the significance behind the competition for power in the cultural industry surrounding dating shows in China in 2010. To some extent, such competition is somewhat “violent” in nature. From Super Girls to You Are the One, we can clearly see that such competition for power will continue in the future until cultural industry power is redistributed in a socially progressive manner. Therefore, ensuring justice in the distribution of cultural industry power is an issue that must be addressed. Every kind of right and power has its opposite side: essentially power and counterpower. With their rights denied to a certain extent, individuals and organizations fighting for such rights become a counterpower. In designing and formulating policies to achieve distributive justice, therefore, the central decision-making system of the government will have to control the movement for rights and against power within an acceptable and flexible range. The development of the cultural industry is a profound reflection of the health of the social environment in which it exists. Since a social environment is composed of politics, economy, society, culture, and ecology, we can also gain insights into how healthy these five elements are. Alternatively, in other words, the freedom of cultural industry development varies proportionately with health. Political health determines access to markets in the cultural industry; economic health determines the market allocation of resources; the health of society determines the value orientation of the cultural industry; the health of culture determines the sustainability of this industry; ecological health determines to what extent the cultural industry can coexist with the environment in harmony. A serious imbalance in the distribution of power and rights in a society is bound to throw the structure of social classes, namely, the structure of social power allocation, out of balance. One of the direct results

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of this imbalance is the emergence of counterpower forces, which are generated in the name of safeguarding one’s rights. This counterpower phenomenon often takes two forms: one directly challenges the current system formed by the existing way and principle of power allocation, while the other directly resorts to the construction of a new form of power; by deconstructing the traditional allocation of power resources in an unconventional way, it aims to rebuild the power space. One example of the latter is the online publishing industry epitomized by online games, a new form of cultural industry power that has been rising rapidly in recent years. The largest imbalance and greatest conundrum in the development of China’s cultural industry is the unbalanced distribution of power and rights. A basic strategic need for us, therefore, is to build a basically equitable structure of power and rights in the cultural industry to balance the two. Weak domestic and overseas market demand is a major predicament restricting cultural industry development. However, we tend to pay more attention to domestic demand driven by the consumption of cultural products and by major investment projects. The former places great hopes on the cultural consumption demand of people, while the latter focuses on government investment. Although all of this has its own justification, boosting demand should not be just about stimulating the consumption of cultural products. What we rarely think of is the degree to which society satisfies the demand for power and rights in the cultural industry and the demand for justice in the distribution of the two. Without sufficient satisfaction of the above demands, it is difficult for cultural consumption to prop up domestic demand in a substantial sense. Think about it. If there were no investments from the central and local governments in tackling the financial crisis, would there be a so-called upturn of the cultural industry? In a flawed social system, the interests of society as a whole are inevitably out of balance. When the advantaged encroach on the legitimate interests of the disadvantaged, they often advance their own interests at the expense of the interests of the latter. The unbalanced allocation of power is bound to result in the inequality of the right to develop. It is not possible to obtain a fair result when all competitors are racing from different starting points. Such a predetermined unfair result will fuel dissatisfaction with the design of the system despite seeming acceptance of it.

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3. The competition between public and private power and the justice of cultural industry distribution Culture is significant as a form of power and is therefore regarded as an important part of national soft power. As a manifestation of such power, the cultural industry is able to shift and even reshape patterns of human, social, and national forces. Therefore, all institutional arrangements concerning the cultural industry, whether it is the censorship system or the market access system, are changes or maintenance of the existing cultural system and pattern of cultural forces and indicate attitudes toward the distributive justice of the existing cultural power and rights. The competition between public and private power is and will continue to be one of the most important issues affecting the development of China’s cultural industry. It is also the most dynamic embodiment of justice in the distribution of cultural industry power and rights. When power seeks rent, one’s right is dissolved in the trade of power. State power pursues political achievements, while private power desires wealth. As state power and private power effectively exchange value through rentseeking, political achievements and wealth are exchanged with each other and turned into wealth and power. Agreements of strategic cooperation between government departments and banks have indeed addressed the issue of financing by granting some cultural enterprises, especially private ones, access to funds. However, as a result, many small and medium-sized cultural enterprises find it even more difficult to obtain financing. All bank lending goes through competent departments for cultural administration, ostensibly to ensure the security of financing and the economic and social benefits of financing. However, in reality, it has led to a loss of equity in the investment and financing for cultural industry development. Since most small and medium-sized private cultural enterprises will never make the list in the database of national cultural administrative departments, it is almost impossible for these companies to obtain project investment loans or financing from banks under China’s current management system for investment and financing. Worse yet, the investment and financing policies formulated in the agreements between government departments and banks are noninclusive policies, giving rise to another unfair institutional framework that further aggravates the difficulties in investment and financing. In fact, for cultural enterprises that have already obtained

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financing, after the initial accumulation of capital, financing for corporate development is no longer a challenge for them, nor is bank lending, except when purchasing investment products. This can be seen from analyses of the investment scale and capital structure of these companies over the years. Such cultural enterprises have achieved economies of scale and are therefore not in need of special support. What truly need to be supported are small and medium-sized cultural enterprises that have good initial market prospects for cultural products but are unable to obtain the capital turnover needed for development. Unlike them, cultural enterprises that have obtained financing do not lack financing channels and capabilities. As a result, it is almost impossible for most small and medium-sized cultural enterprises to obtain bank financing outside such a system. Under this institutional arrangement, banks transfer the possible lending risks of the cultural industry to the Ministry of Culture and thereby gain financial security. The Ministry of Culture, while further expanding its cultural administrative power, has been burdened with security risks that were not originally borne by it. As China’s former Minister of Culture Cai Wu said on CCTV’s Dialogue, a talk show that centers around economic issues, on September 4, 2010, the Ministry of Culture vouched for the agreement on its own credibility. In other words, the agreement signed between the Ministry and the banks had the government as a guarantor. However, how do we ensure the justice of state power for all if there is a loan repayment risk on the part of private cultural enterprises? Such a guarantee of credit carries great risks and may therefore lead to a twofold crisis of cultural security. In deepening cultural restructuring today, to innovate our cultural systems and mechanisms, we should seek to establish public institutions that evaluate the prospect and risks of such public–private cooperation and ensure the justice of power distribution in the cultural industry. An important prerequisite for cultural restructuring and institutional innovation is that the government cannot take the place of the market in drawing conclusions. In fact, investment and financing are entirely the business of the bank, and the credit standing of cultural enterprises applying for loans should also be evaluated by the bank. The primary responsibility of the Ministry of Culture as a competent department of cultural administration is to exercise national cultural power and formulate cultural policies covering the cultural industry, while banks should make financial policies according to applicable national policies. The boundaries of power between the two should be clear. Moreover, most

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banks, especially joint-stock banks, are commercial institutions that are profit oriented in a market economy. By blurring the line between cultural administrations and commercial institutions, a procedural back door will be left open for possible rent-seeking. This is something to watch out for. Therefore, it is necessary to build a scientific and controllable platform of public service based on the market, independent of the cultural administrative power of the government, and subject to the Constitution and laws of the state. The competent departments of cultural administration should be the makers of investment and financing policies for the cultural industry, rather than the judge who decides which company gets the financing. The qualification assessment of cultural investment projects and cultural enterprises that apply for financing shall be carried out independently by banks or by a third party entrusted by banks. This is to ensure publicness and fairness for all market entities with investment and financing needs, namely, equal rights in the cultural industry. When the unfair distribution of power leads to a society’s demand for the maximization of cultural rights, this demand will be transformed into a form of power and a resource available for exchange to seek further maximization of rights. This constitutes a circular economy between power and rights. Here, equal rights are of particular importance. Each such reshuffle of power is a redistribution of public resources. With the rise of national cartoon and animation bases and national demonstration bases, China’s cultural industry has entered a new stage of development. The relationship between government departments and investment entities in the cultural industry is no longer just a relationship between the government and market entities but an exchange of wealth and political achievements in the process of taking advantage of the system. In the development of the cartoon and animation industry, a large seller’s market has been formed where companies with their own brand and originality are in short supply. They can choose among local governments with a great demand for cartoons and animation, focusing on preferential policies related to this industry and the profits and benefits available to them. The race to introduce preferential policies for the development of the cartoon and animation industry in various regions has somehow led to a bidding war between local governments, as well as exchanges of policies and wealth between local governments and cartoon and animation enterprises. This is an atypical cultural market, which I refer to simply as a “policy exchange market,” formed by the different mechanisms of

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competition for power between the government and cartoon and animation companies. It has no trading rules or trading space, let alone proper market management. Only preferential policies and funds are provided by the government. Companies with professional strength select their location based on the preferential policies provided by the local government, as this is where the largest profit margins may be generated. They are unconcerned about whether there is a cultural environment conducive to their creation and production. (Of course, not all companies are like this.) They consider a set of elements involved in the distribution of power and rights, including the preferential price of land, the number and amount of support funds, the preferential tax period and proportion, and the threshold for industrial access. Behind all this, the interaction between local governments’ demand for political achievements and the demand of cartoon and animation enterprises for wealth has become a major driving force for the development of this market. This is how such a market becomes a seller’s market and why cartoon and animation bases have blossomed across the country in recent years. Obviously, such companies can only grow rapidly in regions where there is a great demand for them and can only generate “efficiency of demand” where favorable terms are constantly offered. Once this demand efficiency drops, these companies will migrate to another region where they are in demand and continue to create demand efficiency. Such “migratory companies” are unique to the cartoon and animation industry in China. The special business cycle of industrial parks built by such companies is affected by the migration cycle of these companies, which is determined by the decay period of relevant industrial policies. A typical example is the National Development Base and Business Incubator for the Cartoon and Animation Industry in Shijiazhuang, the provincial capital of Hebei, which was featured in many reports. To some extent, it shows that the development cycle of China’s cartoon and animation industry is not determined by its cycle of innovation but by the cycle of investment. This is one important reason why this industry and the entire cultural industry in China are investment-driven rather than innovation-driven. Incomplete production factors, especially an underdeveloped capital market, are generally considered to be one of the most important factors restricting the development of China’s cultural industry. This underdeveloped capital market is due to a problem not with the market but with the system. On the one hand, the barriers to market access in the cultural industry make it impossible for social capital to enter the market.

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On the other hand, there have been attempts at addressing investment and financing difficulties through institutional design. This is a paradox. Without systematic solutions to the issue of market access, that is, without a redistribution of power resources in the cultural industry, social capital will not be able to enter the production factor market in an orderly fashion within the legal framework and participate in the competition of the capital market. As a result, the difficulties in investment and financing will remain an institutional obstacle to the development of China’s cultural industry. The reason for such difficulties, therefore, lies not in the market itself but in the distribution of power resources in the cultural industry. To fundamentally overcome this obstacle, one strategic choice is to further restructure the power distribution within the legal framework, return the right to allocate factors to the market, and urge the government to exercise effective legal supervision over this right. It is obviously necessary for the government to effectively supervise and control the use of cultural financial capital. However, this does not mean that the capital market will not be deregulated or that the market access of the cultural industry will be strictly regulated. Effective supervision and control of cultural financial capital should be achieved by law rather than by centralization. The state, as well as local and regional governments, possesses the power to shape the system of cultural industries. However, there are inherent demands among them for power to resist the act of shaping. Moreover, under the influence of market anarchism, cultural enterprises as market entities require the power to shape themselves according to their own interests. This results in the structural movement of power and counterpower in the development of the cultural industry. For example, attracting businesses and investment is an important economic policy made and implemented in the context of the unfair distribution of economic power and a shortage economy that requires financial support. It has played an active and important role in effectively alleviating the financial difficulties faced by China at the beginning of its reform and opening-up. At the same time, however, this policy has led to a pathdependent mindset that runs counter to development: You cannot attract investment unless you bring in businesses, and without investment, there can be no development. This is true not only of economic development but also of cultural development. Investment attraction is an important part of the development plan and strategy of cultural industries throughout the country and the only measure of whether a region is capable of developing the cultural industry and its level of development.

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The problem is not the policy itself but using it as the sole indicator for the development of a region. In this process, the local initiative and creativity have been negated and suppressed, reducing a policy with positive strategic significance to an obstacle to the active mobilization of various resources. The reason lies in the fact that it is a vanity project that reflects the value of power and an assessable index that demonstrates the power resources of the cultural industry in the region. Therefore, we should adjust the strategic demand for cultural industry development by optimizing the structure of power and rights needed for such development; we should liberalize cultural productive forces and meet cultural consumption demand to the fullest through maximum satisfaction of the demand for power and rights in the cultural industry. In doing so, we can strive to overcome the fundamental obstacles to the development of China’s cultural industry. 4. Balance and reproduction of power: National cultural security and the gaining of it Fang Xingdong, co-founder and chairman of ChinaLabs, an Internet think tank, warned while talking about the achievements China’s Internet has made over the past fifteen years: “We must be soberly aware that in addition to putting scale first, there is a lack of innovative vitality, which is the soul of China’s Internet development.” From Web 1.0 to Web 2.0 and to the real-time Web, new technologies, products, and applications were still largely American in origin. For China, a country that was rapidly growing and seeking industrial upgrading, building our own version of Google, Twitter, Facebook, and Myspace had become a new Internet strategy. Looking back on the history of the Internet, almost all major innovations have come not from big corporations but from small companies and individuals. From the Worldwide Web, browsers, and search engines to BBS, blogs, and portals, major innovations in Internet technologies and models have all been created by small start-ups and individuals at the beginning of their entrepreneurship. For example, Yahoo, eBay, Facebook, Google, and other Internet giants all started from their own personal websites and hobbies and evolved into mainstream applications that have gained massive popularity around the world. In China, the success of both Shanda Group and Alibaba followed this path. In view of some deep-seated problems in the development of our Internet,

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Fang noted that before we become “a go-to destination for innovative and entrepreneurial talents from around the world,” we could be making the mistake of “undermining the environment for Internet innovation, its dynamism, and its ability to innovate. The losses will be far-reaching.”2 The original intention of strategic cooperation between government departments and banks, I believe, is to overcome the financing difficulties faced by cultural enterprises, especially small and medium-sized cultural enterprises. However, such a system design ends up denying small and medium-sized companies access to capital. As a result of this financial bottleneck, it is impossible not only for these companies to achieve innovation in cultural products but also for China to unleash the creativity of the whole nation in a wider and deeper range. There is no doubt that such consequences are not intended by the designers of our system and strategy. However, the objective result is that in the name of safeguarding national financial security, a large proportion of small and medium-sized cultural enterprises in urgent need of financing are likely to be excluded from the national network of cultural security. In this sense, therefore, Fang’s words could serve as an early warning of security issues to come in the current system design and strategic arrangement of China’s cultural industry. Here, the establishment of a mechanism of mutual trust based on individual creativity and national cultural security is of great national strategic significance for the development of our cultural industry and the entire Internet industry. The right to freedom of expression is an important cultural right. The degree to which it is exercised is a key measure of the cultural innovation of a country or nation. Without exercising this right to the fullest, there can be no creative development for culture and the cultural industry within the framework of the Constitution. Without its creative development, the cultural industry will not have a profound impact on people, society, and the country. Hence, there is no cultural soft power and cultural industry power to speak of, let alone national cultural security. To some extent, national cultural security is built on the full exertion of citizens’ right to freedom of expression. When the right to freedom of expression is not fully exercised or put on the agenda due to system design, the public will collectively choose to obtain such a right by making full use of the nature and mechanism of expression, thereby establishing a 2 Fang, Xingdong, “How will China’s Internet enhance its innovative capacity,” People’s Daily, March 23, 2010.

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voice. Internet public opinion is one typical case. The effective balance of power through decentralization is a crucial guarantee for the fulfillment of rights. One cannot exercise one’s rights without such a mechanism, since absolute power leads to absolute corruption. The cultural industry is one important mechanism for achieving a proper balance of cultural power through which each party in the cultural sector obtains freedom. The balance of power in the cultural industry, therefore, should be regarded as a key approach to exercising basic cultural rights and interests for citizens. We should establish a new geographical distribution of cultural forces through it and understand the development of cultural industries by returning to the basic perspective of geographical knowledge, as today’s geographical pattern clearly indicates the current power structure in the cultural industry and its advantageous locations. Security issues should not be taken as an excuse to deprive others of their legitimate rights and interests, let alone as a tool and pretext for monopolizing interests. As Mao Zedong said in his speeches, victory is built on the army and the people. The number of strategic transnational cultural groups owned by a country is without doubt an important indicator of its cultural soft power but not the only one. Whether and to what extent it can mobilize a wide range of social forces and public opinion is a more important component of such power. In a way, it is of decisive significance. When analysing the different strategies adopted by the two superpowers during the Cold War and the results achieved, Wang Jisi specifically pointed out that the United States won the Cold War against the Soviet Union by relying on its internal strength, namely, the consistency of its domestic ideology, rather than its international status and diplomatic strategy. By “domestic ideology,” he meant public opinion in the country, which is not based on the political leanings of a few elite groups but the national political consensus.3 The experience of the United States and the lessons of the Soviet Union are of irreplaceable strategic value to today’s China in implementing a scientific approach to development and in selecting and formulating strategies as required in the current international strategic contest for soft power. Since the strength of a country lies in its people, we have to reconstruct our view of national cultural soft power, build and enhance such power on the basis of extensive public opinion, and develop strategies for safeguarding national 3 Wang Jisi, “Behind America’s overstating of China’s power,” Dongfang Daily, March 24, 2010, A19.

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cultural security through the protection of cultural rights. Only in this way can we foster a conscious awareness of national cultural security in all the people and encourage them to take actions to maintain it, rather than leaving this matter to a few people or groups of people. To achieve this strategic goal, it is necessary to restructure power and rights in the cultural industry and create a system of national treatment and cultural rights essential to enhancing national cultural soft power. Huntington famously said that the main difference between states is not in the form of power but in its capacity. At the core of that capacity is the ability to mobilize at the grassroots level, which lies not in a regime’s control of the state machinery but in the number of legitimate rights enjoyed by its people. “There was a lot of discussion about the decline and fall of the Ming and Qing Dynasties, but in modern times, only the Chinese Communists could see that the roots of Chinese feudalism lay in the domination of local tyrants, evil gentry, and gangsters, causing the state to completely lose its credibility and capacity,” observed Han Yuhai, Professor of the Department of Chinese Language and Literature, Peking University.4 In terms of people’s freedom of expression, the development of China’s cultural industry today can confer rights that economic development in general cannot. As we entered the Internet era, such rights have become a necessary confirmation of our identity as a member of society. When one’s identity as a social member cannot be confirmed without such rights, striving for them becomes an inevitable choice, which is the root cause and social mechanism of the so-called counterpower. Therefore, to establish a mechanism of cultural industry development that serves the interests of the country and the public and upholds the equity and justice that are essential to such development, it is necessary to strike a balance of power and rights in the cultural industry so that such power and rights are reasonably distributed between the state and society and that a necessary and reasonable tension is formed between them. Only in this way can a country mobilize at the grassroots level to the maximum extent while developing and enhancing national cultural soft power. On March 23, 2010, Google was fined by a Brazilian court for not blocking web pages containing indecent jokes on Orkut, one of its social networking sites. The court imposed a fine of 2,700 U.S. dollars on Google each day, it retained the pages and ordered it to stop publishing similar content. 4 Han Yuhai, “Sovereign currencies and modern States,” Wenhui Daily, March 22, 2010.

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According to the judge, the lawsuit against Google was filed by two teenagers who claimed that they were offended by the content on Orkut. In dismissing Google’s argument, the judge said that similar regulations have been imposed on Google’s web pages in China.5 Here, the power of a state is used to safeguard its cultural sovereignty and the legitimate rights of its citizens. This is national cultural security in its finest form. Equity and justice shine brighter than the sun. As Former Chinese Premier Wen Jiabao said, an unjust society is bound to be unstable and disharmonious.6 The establishment of a just society depends on its citizens having fundamental power and rights. As one of the most important and fundamental cultural rights of Chinese citizens at present, cultural industry rights constitute the most basic cultural component of a just society. This is because the cultural industry, by its very nature, is not a collection of industries in the general policy and statistical sense but an essential means and social mechanism for citizens to exercise their freedom of expression. Whether such freedom of speech can be owned and exercised by citizens is largely determined by their possession of a vehicle for expression. The cultural industry is one such vehicle at this stage. The fairness, stability, and harmony of a society can be seen in the degree to which citizens are allowed to exercise freedom of expression. A society whose citizens have to live without the most basic means of free expression cannot be considered a just society. In that sense, the exertion of cultural industry rights by citizens reflects the current level of justice in our society, as well as the balance of power and fulfilment of civil rights.

3

The Public Responsibilities of the Cultural Industry

The cultural industry is profoundly affecting our lives, altering the social and cultural ecological environment on which we depend for survival and development. As a new way to create and increase wealth, it is being fully recognized by people. As an extension of the public sector, however, the public responsibilities of the cultural industry seem to have been neglected

5 “Brazilian court orders Google to stop Posting ‘dirty jokes’”, Dongfang Daily, March 25, 2010. 6 “Premier Wen spent the May Fourth Youth Day with students from Peking University”, Xinhua Daily Telegraph, May 5, 2010.

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in our GDP. A campaign called “Purify the Internet and Protect our Children” designed to safeguard cybersecurity for children was launched by the Guangdong Women’s Federation in March 2009, collecting signatures online from more than 110,000 women. In the first half of 2009, the Chinese government carried out a series of special operations to clean up and rectify the cultural market.7 Such actions reflect the common demand of citizens and the state for justice on the same issue, namely, public responsibilities of the cultural industry. 1. The public responsibilities of the cultural industry are defined by the attribute of culture as a public domain and the functional attributes of cultural products manufactured and delivered by the cultural industry. As an important form of expression and material manifestation of human spiritual and cultural creation, the cultural industry, particularly those at its core,8 is manifested in cultural products. Without cultural products, there will be no cultural industry. The cultural industry and its products are the only necessities for survival in addition to food among the articles produced by people. It is an artistic and spiritual way for humanity to not only understand the world but also explain, express, and liberate themselves. It is a means of human existence. It is with this approach—as opposed to science and technology—that human society has been able to evolve, constantly overcoming and transcending itself. Without the creative production of cultural products, there would be no artistic and spiritual way for humanity to understand the world, nor would there be any room for spiritual comfort in the face of an economic crisis. Without the mass production of such original products, the human race would not be able to form a spiritual community. It is in this sense that cultural products have become common and indispensable mental nourishment for human society, produced and delivered by the machine 7 From April 12 to mid-May 2009, the office of the National Work Group for Combating Pornography and Illegal Publications launched a special campaign to clean up vulgar audio-visual products. Sixteen companies, including Guizhou Publishing House of Audio-Visual Teaching Materials, have been named and punished for publishing and reproducing such products, and some of them have had their publishing licences revoked. 8 Based on the classification system of cultural and related industries released by the NBS.

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that is the cultural industry. Material products and spiritual products are the two most basic items of consumption. In our modern social life, cultural products are indispensable to people, similar to food, air, and water. Cultural products bring people spiritual comfort and satisfaction that cannot be offered by any actual food, especially for people in crisis who crave spiritual healing. In addition, this is precisely why we think highly of cultural industry development today. As we all know, once a certain object becomes a necessity in people’s daily lives, whatever kind of object that is, it is endowed with a responsibility, a responsibility for the existence and development of all people and society composed of such people. This is what we call public responsibility. All goods produced for and by people have their public responsibilities. As long as it is provided for people to consume, whether in a material or spiritual way, such goods must be conducive to a healthy lifestyle and the sound development of people. Therefore, anything harmful to the overall consumption demand of human society, whether material or spiritual, will be prohibited. In this sense, health quarantine and culture quarantine are essentially the same. Whether as a citizen or as a social organization, we must consciously assume this responsibility. Since this responsibility is not directed against any one individual but against the public as a whole, we call it “public responsibility.” Ensuring the performance of such a responsibility through systematic design and compulsive administrative means is therefore regarded as a “public product” provided by the government. This is why we must control the production and sale of not only material products but also spiritual products that endanger human health and the survival and development of human society. In addition, it is one important reason why the manufacturers and suppliers of private and public products are required to ensure product safety, be they material—Sanlu tainted milk powder and other food safety incidents have left painful lessons—or spiritual products. Public cultural goods fall into the category of public cultural products, which are provided mainly by the government as part of nonprofit cultural undertakings. Accordingly, profit-making cultural industries offer mostly private cultural goods, which are nonpublic cultural products supplied by cultural enterprises through the market. Since public and private cultural goods, while satisfying people’s demand for material and spiritual consumption, must be made safe for consumption, these two kinds of goods share a common public responsibility. This is determined by the public nature of culture. There is public and nonpublic cultural production, but both should be the

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natural embodiment of the publicness of culture. Therefore, the public responsibility of the cultural industry is not some form of external power or ideology imposed on it but a result of the fact that culture exists within the cultural industry itself and that cultural products are essential for human survival. 2. The publicness of culture: An important source of public responsibilities for the cultural industry As a necessity for the survival of human society, cultural products form a system of spiritual nourishment that directly affects how consumers develop their self-awareness as members of society and whether they identify with their culture. This leads inevitably to the natural generation of their second attribute: security, specifically cultural security. This is again determined by the publicness of cultural products. Based on our current understanding, the cultural industry is generally defined by its profit-making nature, which means it is market-oriented. In other words, the cultural industry is part of the private sector rather than the public sector. Its publicness lies not in the general sense of industrial economics but in the nature of the cultural consumer goods it provides to society as a whole and the public value of such goods demanded by consumers. As with food consumption, safety is the most important need in addition to basic survival needs, as safety issues will directly affect whether our survival needs are satisfied and the extent of such satisfaction. Since the safety of cultural products hinges on the system that produces them, providing and maintaining public cultural security is naturally another important public responsibility of the cultural industry. The mental health of minors should be of the highest priority in safeguarding the cultural security of people. It is the most common need in terms of cultural security and one with the greatest universal value. The growth of minors has a direct bearing on the strategic lifeline for the future development of a country and nation. This is why all the institutional arrangements concerning film ratings and Internet ratings in the world today, as well as the crackdown on and control of pornographic websites, focus on the physical and mental health and security of minors. The concept of public cultural security and its measuring standards developed in modern society are absent from the vast rural areas of

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China. Despite this, there is a local criterion used for judging whether something endangers the mental health and security of the younger generation, that is, whether it sets a good or bad example for the children. This is a basic bottom line of public cultural security established by Chinese farmers born in agricultural civilization. It is a value judgment that is directly related to the future of a child, a family, and even a whole clan. The need to protect our children from mental harm and contamination will trigger instinctive resistance to cultural products once they trample on this bottom line. This is the fundamental reason why websites, audio-visual products, and “performing arts” that are pornographic in nature and in serious violation of the rights and interests of minors are constantly resisted in rural areas. In the U.S., thirty-six film studios, including Columbia Pictures, received an administrative penalty for the illegal screening of films banned by the Federal Communications Commission (FCC) in 2007. One important reason is that these companies violated federal laws regarding the mental health and security of minors. In this sense, public cultural security is the most important public product that all countries and nations, regardless of their ideology, must first provide to ensure maximum protection of the mental health and security of minors. Such a fundamental need for security is an intrinsic source of the public responsibilities and social obligations of all the manufacturers and suppliers of cultural products. By regulating the production, provision, and consumption of cultural content through institutional design and arrangements, the state has prescribed public responsibilities that must be assumed by various cultural industries. This is because the cultural industry is essentially a medium for cultural content. As one of the fastest growing cultural industries in China in the late 1900s and early 2000s, online gaming was sadly causing the most severe problems of public cultural security at that time. A survey showed that more than ninety percent of teenagers with Internet addiction disorder frequented Internet cafés, a major form of market operation in online gaming, and that they were the primary consumers of such premises. “China is a country with the worst Internet addiction among teenagers, which is disrupting social harmony,” said a report containing the survey.9 As was already revealed by research, there was a growing trend of juvenile cybercrime in China. In 1999, more than 400 cases of cybercrime 9 “Help Free Our Children from Internet Addiction”, Xinhua Daily Telegraph, June 1, 2009.

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were registered and investigated in the country, which surged to over 2,700 cases in 2000, more than 4,500 cases in 2001, and over 6,600 cases in 2002. Cybercrimes committed by teenagers had already become a serious social problem10 and the most typical example of “countercyclical growth” in the statistics about the cultural industry “bucking the trend” in the financial crisis. Worse still, “some legitimate publishing houses have been complicit in the production of pornographic content,”11 ignoring the security risks they posed to the country, the nation, society, and families. We cannot sacrifice an entire generation for GDP growth in the cultural industry. “Can somebody help me?” cried a child on Baidu Tieba, a keyword-based online community.12 There is no greater public responsibility in today’s China than to safeguard the fundamental interests of our citizens like this child and the entire nation. Public cultural security inevitably gives rise to national cultural security. When citizens cede some of their power to the community and form a state, the level of public cultural security will depend on whether national cultural security is successfully maintained. There is no public cultural security for a country whose national cultural security is in crisis. In this regard, “The Last Lesson” by French novelist Alphonse Daudet provides a classic historical text: A small French town was stripped of its right to teach French in its elementary school by Prussian occupation forces as a result of France’s defeat in the Franco-Prussian War; not only did France lose its national cultural sovereignty, but all French citizens, including the inhabitants of this town, were also deprived of their cultural rights. A day without food can cause social panic in a country. Likewise, a day without food for the mind can lead to a complete breakdown of state and social order. Therefore, the cultural industry plays an important role in safeguarding national cultural security. By inference, every manufacturer and supplier of cultural products in fact assumes the same role through the market economy. In a way, the cultural security of a nation depends

10 “Online Games Do the Most Harm to Teenagers”, Guangming Daily, May 19, 2009. 11 Jiangxi Culture Audio and Video Publishing House, Shantou Ocean Audio–Video Publishing House, Guizhou Publishing House of Audio-Visual Teaching Materials, and Shaanxi Culture Audio and Video Publishing House were on the list, according to a report by Xinhua Daily Telegraph on May 26, 2009. 12 “Help Free Our Children from Internet Addiction,” Xinhua Daily Telegraph, June 1, 2009.

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on how well they play that role. Unfortunately, this is overlooked by most designers and executors of strategies for cultural industry development. GDP has become almost the only indicator in measuring the social contribution of cultural industries, whose cultural attributes are lost in economic principles. Reports about the upturn of the cultural industry during the financial crisis today are all based on specific GDP figures. Rigid economic indicators have overtaken our pursuit of national cultural soft power. Behind this cognitive bias, there is a potentially huge crisis of spiritual food security. Ultimately, such a blind pursuit of economic benefits may come at the expense of national cultural security. We must therefore recognize the strategic role played by the cultural industry as a system that produces and distributes cultural products as well as the attributes of culture possessed by it. This is how the cultural industry helps build national cultural soft power. Treating it merely as an industry in the economic domain would entail undue emphasis on its industrial functions, which will stand in the way of its cultural functions. Spiritual power is the ultimate power that sustains mankind in overcoming all difficulties and the only self-confirmation of the human race. As human society moved forward, we built nations and states. One thing that can shift the balance of power between countries now, in addition to material power and, by extension, military defense, is culture. In other words, a country needs not only sufficient material power, namely, military might, to safeguard its territory but also enough spiritual power, namely, cultural strength, to defend the sanctity of its cultural and spiritual territory. Today, as the epitome of a country’s cultural strength, the cultural industry, along with its products, has taken on strategic value and significance. Culture, especially culture imported through cultural products, has an innate ability to affect people’s inner world and cultural behavior, thereby altering all existing cultural relations and order. This is how culture acquires the attributes of a strategy, which is a system of power that changes or maintains the status quo. This power is then presented in the form of cultural industries, turning them into an important strategic product. As a result, the cultural industry has remained a key strategic tool in the cultural contests between nations, whether during the Cold War, in international strategic competition, or in seeking to overcome the economic crisis. It is an important strategic means to enhance national cultural power. While striving to develop cultural industries and taking their culture into the global arena, major powers in the twenty-first

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century should also control the import of cultural products in a way that does not weaken their cultural strength. The cultural industry is a process and system of production and circulation of cultural products and the most important manifestation of culture. Thanks to such a manifestation, culture continues to exist and flourish in the modern world. Since the modern cultural industry presents itself in the more vivid form of cultural products, its value ultimately hinges on the value of cultural products. Providing a system of value and content is at the core of the cultural industry, despite the great monetary value created by it as a key area of economic development and competition. Countries with the world’s largest cultural industry have been promoting and exporting their value systems while accumulating vast wealth through global expansion. Restrictions on market access of the cultural industry and challenges to the market access system are not only economic behavior but, more importantly, cultural and political behavior. They are essentially cultural diplomacy and cultural expansion in the name of the market economy. One of the most important factors for a country to have a say and influence in international affairs, apart from political and economic influence, is the size of its cultural trade surplus. To put it simply, a country with a larger cultural trade surplus will have a greater say in international affairs, as well as a stronger cultural competitive edge and influence. This cultural power is measured not by domestic consumption but by international consumption; not mass consumption in the general sense, but elite consumption—together they comprise the strategic elements of national cultural power—of ideas, theories, concepts, and all interpretations of problems and phenomena relating to humanity and the world. Willingly or unwillingly, manufacturers and suppliers of cultural products in fact serve the function of safeguarding the cultural security, cultural product safety, and cultural sovereignty of their country. The construction and development of culture happens through the cultural industry. Without such a concrete form, we will not see the innovation and inheritance of human culture today. We made the decision to develop the cultural industry, as it is an indispensable productive force driving cultural and ideological progress in human society. As a result, facilitating such progress has become a major task undertaken by the cultural industry, which defines its public responsibility from the moment it was born. Out of printing came the book publishing industry, which made it possible for the cultural and ideological achievements of human society to spread across time and space and ushered in the era of shared

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cultural development. Modern science and technology have brought us the film industry, which creates and preserves images recording the progress of human civilization. Not only does it enable later human societies to understand the way of life of their predecessors through moving pictures, it also provides spiritual pleasure and comfort to people in distress, which is even more important today. The invention of sound recording and the modern record industry that was born out of it helped perfect the system of the human voice and push us beyond the limits of our own civilization. At the same time, censorship of books and newspapers, film rating, and other cultural administrative systems came into being to make sure that all these are in line with the progress of human civilization. Despite the flaws and occasional disastrous consequences of such systems, the mission and responsibility of the cultural industry remain unchanged. Otherwise, there is no need for human society to constantly explore new cultural productive forces and new cultural formats. Such is the historical process in which human civilization evolves. 3. The cultural industry takes on its public responsibilities as a result of the empowerment of national sovereignty, which then gives rise to its market access system The public responsibility of the cultural industry is not a fixed abstract concept but a living system that increases in value as human society advances. With cultural products as its primary form, the cultural industry focuses on the innovation, inheritance, and expression of culture. This cultural function, once manifested in the cultural identity of a country or nation, will develop into a form of power and rights, an important symbol of modern state sovereignty. Hence, the cultural industry and the products produced and delivered by it function as a shield that defends cultural sovereignty, epitomized by the market access system in the modern international cultural system. As indicated by the doctrine of popular sovereignty, or the sovereignty of the people, the loss of the sovereignty of a country will result in the loss of the rights of its people. To safeguard cultural sovereignty is to safeguard the greatest interests of a country’s citizens, which are a confirmation of one’s fundamental cultural identity. There is, of course, a need for constant cultural and intercivilization exchanges, which is where the vitality of human society comes from. As widely recognized in the international community, the

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diversity of civilizations and cultures deserves respect. To abide by this principle is a common code of conduct stipulated in the Charter of the United Nations. All of this is based on the affirmation of national cultural sovereignty, a universal public responsibility of the cultural industry. We innovate, carry forward, and express our culture through the cultural industry, which also encourages a sense of cultural identity. For this reason, it has become an important strategic move made by some major cultural powers to influence and deconstruct the system and principles of cultural industry development of another country and thereby subvert the established order. This further deepens the public responsibility of the cultural industry in its modern sense. In this context, the film rating system is, in effect, a design and institutional arrangement that carries the weight of cultural sovereignty and embodies this public responsibility of the cultural industry. Everyone in the cultural industry should consciously assume such a public responsibility, whether as a content provider or a service provider. This should also be incorporated into the industry code of conduct. Never should this responsibility be abdicated or cultural sovereignty given up for a temporary boom in the cultural industry, especially in times of difficulty. The public responsibilities of the cultural industry can be classified into two basic categories: universal and nonuniversal. Universal public responsibilities refer to those applicable to different cultural backgrounds and ideologies. Maintaining the mental health of minors is one such example, which is best epitomized by the film rating system implemented in most countries. There are various reasons for the establishment of such a system, the primary one being, without doubt, to safeguard the mental health and security of minors, who stand for the future of a country and nation and its hope for progress. Nonuniversal public responsibilities, or differentiated ones, vary according to the cultural tradition and ideology of a sovereign state. To be more specific, the social system and ideology chosen by a country or nation concern its core interests and should therefore be upheld through the cultural industry, which serves as a tool for voicing one’s cultural opinions and a means to achieve value. Although the interests and ideologies of different countries and groups of countries will diverge, sharply even, safeguarding core national interests is an undeniable public responsibility for the cultural industry. For example, Taiwan and Xizang are both inalienable parts of China; this is a fact that concerns the issue of national sovereignty and is therefore unchallengeable. Defending the integrity of our territorial sovereignty is an innate

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public responsibility of the cultural industry, just as the cultural industry in the United States must never challenge American sovereignty over Alaska. This results in conflicts between the universal and nonuniversal public responsibilities of the cultural industry, as well as the different ways of performing them. The experience of the United States in dealing with such conflicts deserves our attention. For instance, regarding the handling and control of pornographic materials, the typical approach in the United States is that the community will first identify which materials are obscene and release the list of pornographic materials endangering public interests and the organizations that market them so that the court could then prohibit the marketing of such materials. If the marketing continues, the sellers concerned will be subject immediately to summary judgment. In such legal proceedings, the community often prevails, and defendants rarely enjoy legal protection, as long as the community can verify the existence of pornographic materials with sufficient evidence. Courts have agreed to such controls on the grounds that the interests of every American state outweigh the supposed rights of individuals in maintaining stability, order, and the reputation of the community.13 Public interests are of particular importance here; they give rise to the public responsibilities of the cultural industry. Although the public interests in question refer only to the interests of American states and may not even be entirely consistent with the First Amendment, courts can still agree to this control scheme based on them. This is one example of differentiated public responsibilities of the cultural industry. The differences in the public responsibilities of the cultural industry should not be ignored or rejected for the sake of their universality, and vice versa. Instead, we should constantly refine and integrate the principle of universality into differentiated public responsibilities of the cultural industry and keep in mind such differences when acting in the spirit of universality. 4. The content and subjects of public responsibilities in the cultural industry The cultural industry functions as a catalyst that constructs and deconstructs society. The use of printing in Europe was a direct cause of the

13 Leonard D. DuBoff, Art Law in a Nutshell (Beijing: China Social Sciences Press, 1995), 180.

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spread of the capitalist spirit and the Protestant ethic, which eventually led to the rise of the bourgeoisie on the continent. Printing and the revolution in book publishing in Europe caused by its widespread use have deconstructed not only the medieval social and cultural order based on theocracy but also a new capitalist social order dominated by the bourgeoisie. Without them, there would have been no religious revolution in Europe or bourgeois revolution in modern Europe, let alone the cultural and social order of today. However, the deconstruction and construction of society by the cultural industry is, above all, the deconstruction of a previous order of cultural rights and the establishment of a new order of cultural equity and justice. Mass appeal often characterizes every modern cultural industry at the beginning of its birth. They reflect the popular rejection of the elite cultural ruling order and its social and cultural power structure and a legitimate demand for fair cultural rights enjoyed by the public. This is true of the publishing industry, the film industry, and even today’s Internet-based online gaming industry. The development of the cultural industry, in this sense, is a process in which the public strives constantly for equity and justice and to build a public social order that continues to safeguard their legitimate cultural rights and interests. When the cultural order built on such rights and interests no longer meets the ever-growing spiritual and cultural demands of the people, we will try to create a new order by developing new cultural industries. This is the historical driving force behind the development of the cultural industry. It is therefore another important public responsibility of the cultural industry to help citizens exercise their cultural rights and interests and build a fair and harmonious social and public order based on such rights and interests that facilitates social progress. Cultural rights and power are obtained through the cultural industry, whose public responsibilities contain three dimensions: citizens, society, and the state. Hence, an important public responsibility of the cultural industry is to embody the justice and equity of cultural rights and power in this “three-dimensional” world. This leads us to a major issue about the cultural industry itself: equity and justice in the cultural industry. Relationships of power and rights are key to achieving equity and justice and establishing a new order. All people are by nature cultural beings, not only because people themselves are the product of culture but also because culture is brought to life by people. Therefore, culture, like air and water, is a right that everyone should enjoy freely. The absence of cultural rights is a recipe for cultural inequity and injustice. Cultural

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inequity means that some people are deprived of their cultural rights. Today, the cultural industry has become an important space for the existence of cultural beings. To effectively facilitate the evolution of people as cultural beings, we have to develop the cultural industry. This is how people achieve comprehensive development and thereby how the public cultural order is built and social equity and justice are achieved. Citizens are entitled not only to the public cultural products provided by the government and basic cultural consumption but also to participation in cultural production and distribution. In modern society, citizens, to some extent, are the subject of all cultural production and creation. Therefore, how equitable and just a society is culturally consists of whether and to what extent its citizens possess such a right to cultural production and expression. As a tool for people to express and disseminate their own system of opinions, the cultural industry is public in nature. The degree to which people are free to use this tool is directly related to their freedom of expression. With spiritual production as its focus, the cultural industry serves as a major channel through which people’s diversified demands for spiritual and cultural consumption are satisfied. The extent to which such a demand is satisfied depends on one key indicator: highly creative spiritual production, which is then determined by the degree to which people can enjoy freedom of expression and communication in the spirit of the Constitution. All cultural industries function as tools and carriers of freedom of expression. There is a positive correlation between the development of cultural industries and how much freedom of expression is granted to the people. The two share one core in common: the cultural rights of citizens. Freedom of expression is a right of citizens, and the cultural industry is their tool and means to exercise this right. Therefore, any restrictions and regulations on access to the cultural industry are an extension of the power to restrict freedom of expression. How much control over freedom of expression is legitimate? This is an important component of freedom of expression itself involving basic principles of law governing such freedom. You cannot expect the modern cultural industry to mature and flourish without granting people freedom of expression and communication. However, there is no such thing as unregulated freedom of expression; only freedom of expression subject to varying degrees of regulation. The unprincipled demand for deregulation of market access and freedom of expression in the cultural industry is not only unprecedented in the world but also irresponsible. In this sense, the access and

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censorship systems of the cultural industry, as well as its deregulation, should reflect social equity and justice in the cultural industry and thereby be closely related to cultural equity and justice in the industry itself. Put in the context of the cultural sovereignty of a country, the value standard and system design surrounding the market access and control of the cultural industry will naturally have a bearing on the public responsibilities of the cultural industry to maintain international equity and justice and establish an international cultural order. This is the major reason why market access of the cultural industry has become an important part of international geopolitical competition. Therefore, the question is not whether regulation of the cultural sector is necessary but what kind of regulation is scientific and essential for the development of the cultural industry. Despite the vast differences in the understanding of regulation of the cultural sector and standards established by that understanding in various countries and among different groups of people, most countries have designed their system based on a common principle, which is to maintain public cultural order. Whether it is news censorship, the film rating system, or the online game rating system announced in China in 2010, the most basic and important purposes are to safeguard the mental health and security of minors and defend the fundamental values and ways of life of the country, thereby maintaining social stability based on certain values. Here, there are two basic dimensions, minors and the lifestyles and values of a country and nation, which concern the future of the country and nation and its cultural identity, respectively. They serve as a fundamental basis for maintaining public cultural order and a common principle for the cultural censorship and cultural industry regulation of the vast majority of countries in the world. The development of human society also follows such common criteria. Freedom of expression and market access to the cultural industry shall enjoy extensive space and institutional support provided that they do not violate the law or these two fundamental principles. The basic cultural order of a society is thus built where citizens, society, and the state each assume their respective public cultural responsibilities while enjoying various cultural rights in the institutional arrangement of the cultural industry. Every citizen has a responsibility to defend the cultural security of a country, but it is beyond doubt that the primary responsibility lies with the government. Despite coexisting in a system that strives for fairness, citizens, society, and the state should enjoy different rights and undertake different responsibilities. Such differences contribute to the

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division of labor between these three, which embodies the cultural order of a country and nation and equity and justice in the cultural industry. It is not yet possible for citizens and nongovernmental economic organizations to fully assume the responsibility of safeguarding national cultural security and public cultural order since total decontrol of the market is out of question. This is when the government should take full responsibility. Similarly, when there are repeated demands from citizens and social organizations for deregulation of the cultural industry, the state can reasonably hold all citizens and social organizations accountable for the cultural development of citizens, society, and the state. This is their public responsibility. Cultural industry development used to be the province of the government in contemporary China. With the government as the sole investment entity, the country struggled to develop its cultural industry. As a result, the legitimate cultural rights of citizens were not being exercised as they should be, nor was freedom of expression given the space and institutional support it deserved. Failure to achieve cultural equity and justice led to tensions between citizens, society, and the state, as well as in the cultural order, for a period of time. A fully state-owned cultural industry would result in a rigid cultural order, costing the exertion of civil cultural rights its due flexibility. Such a distorted system and order of the cultural industry is neither in the national cultural interest of China nor in the constitutional spirit of equity and justice. In response, the Central Committee of the CPC decided to allow nonpublic capital into the cultural industry in 2005, and in 2009, the National Press and Publication Administration recognized the legality of private publishing studios. These are not just general reforms of the system for accessing cultural industries; what they embody is equity and justice in the cultural realm. The cultural order of a society and a country is built on citizens exercising their basic cultural rights and interests. As the principal pathway to the exertion of such rights and interests, it is incumbent on the cultural industry to help effectively build a social and national cultural order. This is what we refer to as equity and justice in the cultural industry.

CHAPTER 7

The Government, the Cultural Market, and Cultural Industry Planning

The relationship between the government and the market, or more specifically, the cultural market, is one of the basic contradictory relations in the economic development of a country. Properly understanding and handling this relationship has long been the most important issue affecting cultural policy decisions in China. Our contemporary cultural policies, especially their changes since reform and opening-up, can be seen as a process of dealing with this contradictory relationship. It is also one of the focuses of cultural industry development in China. As a special form of cultural policy, cultural industry planning embodies the position and attitude of China in managing the relationship between the government and the market in the cultural sector.

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The Government and the Cultural Market

The relation between the government and the cultural market, namely, the relation between the government and the market in the realm of culture, consists of the same general connections between the two as found in other markets and special connections unique to the cultural market. Understanding and handling these connections in a scientific way is of great significance not only to the cultural market but also to other markets. In other words, the way we manage the relationship between

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the government and the cultural market will offer a general reference to other markets. 1. The cultural market is essentially part of the public realm Markets are born out of the economic activities and behavior of people and society. There would be no market without people’s economic activities and demand for economic exchange and communication. In other words, markets are built by people. We choose our preferred ways of economic exchange and communication, which then solidify into a series of conventions that form part of our collective unconscious in the long course of evolution. These conventions have now become common market principles. As far as their origin is concerned, all market principles are the result of public, human, and social choices and therefore reflect the social relations among people. Markets and market economies are essentially a reflection of the interrelation of the various factors within its generative mechanism. Therefore, the market is not some transcendental force but a product of the economic behavior and activities chosen by people. The essence of the market lies in the people who participate in it. It is the objectification of people’s essential power. This is true in all markets, including the cultural market. The fundamental difference between the cultural market and other markets lies in the fact that what people exchange through buying and selling in the cultural market are thoughts, ideas, feelings, beliefs, aesthetics, values, and other spiritual matters in a nonphysical form. In this way, people enhance mutual understanding, communicate cultural information, and debate over ideas. In many cases, it is also a kind of spiritual and cultural competition. In other words, the cultural market is essentially an arena of ideas, emotions, beliefs, and other meanings. Emotions and feelings are private. However, once they are manifested in a system of symbols and meanings and become the object of public spiritual consumption and discussion through the market in the form of art, literature, philosophy, and social sciences, all private topics will become part of the public realm. Here, the market acts merely as a medium through which people communicate and exchange spiritual and cultural products, namely, their thoughts, and through that communication and exchange debate and criticize such thoughts, constantly facilitating various ideological, cultural, and artistic creations. The market space expands as such

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ideological, cultural, and artistic creations are increasingly criticized and debated. When a certain form of ideology, culture, and art no longer suffices as a tool in debate and criticism, a new form comes into being, followed by the birth of a new form and space of cultural market and new competition around this emerging market. It is in this process that the cycle of the generation and development of cultural markets continues. The cultural market plays a fundamental, or decisive, role in the allocation of cultural resources, which is in fact determined by its nature as part of the social public realm. The modernization of the cultural market depends directly on the modernization of the public realm. Markets in general reflect the general economic relations among people, while the cultural market reflects their cultural economic relations and other relations derived from them, including social and political relations. Generally, the cultural market refers to a place where cultural goods and services are exchanged. In other words, it comes in the form of space. The size of this space is not invariable but grows with the expansion of the sociocultural division of labor and the exchange of commodities. As a spatial form of culture, this place (the cultural market) mirrors different social production relations whose changes are revealed by the change of place. From the different levels of places such as golf courses and chess and poker rooms, for example, we can see the hierarchy of sociocultural relations among people, specifically the so-called high-end cultural market made up of elite cultural consumption and the low-end cultural market of mass cultural consumption. Behind the cultural consumption capacity of different consumer groups lie the cultural production relations of society, as well as the relations of cultural power and rights determined by them. Therefore, cultural market competition is fundamentally the competition for cultural rights and power. When a market is won and monopolized, its economic power will turn into political power, the direct result of which is the institutional design of the cultural market, eventually restructuring the allocation of cultural resources while rewriting market rules. Such is the essence of the cultural market as part of the public realm. In The Communist Manifesto, Marx and Engels made a profound and vivid description of the historical role of capitalism: “The bourgeoisie has, through its exploitation of the world market, given a cosmopolitan character to production and consumption in every country… In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal interdependence of nations. In

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addition, as in material, so also in intellectual production. The intellectual creations of individual nations become common property. National one-sidedness and narrow-mindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature.”1 What people exchange in the market are not only commodities but also the values embodied in the principles of commodity exchange. Commodity exchange is about bargaining and doing as the locals do. It is a process in which various cultural perceptions, lifestyles, and ways of being collide with and accommodate each other and thereby find common ground. Such a universal code of conduct enables human beings to understand and integrate with each other while allowing different cultural values and demands of diverse cultural mechanisms to be conveyed. In the spirit of seeking common ground on major issues while leaving aside minor differences, we have created a global market and reserved local markets of all kinds. They are able to coexist despite following different sets of principles. The development of the cultural market is a direct reflection of the production, exchange, and circulation of spiritual products in human society over a period of time. In this sense, its maturity and sophistication indicate how liberated and open a society and its people are. In other words, it is the manifestation of all cultural relations between people and society. Politics dictates the structure of the cultural market in the public realm and its relationship with the private cultural realm, as well as the changes of this structural relation. For example, the bourgeois revolution and movement, as a sociocultural manifestation of the revolution of new productive forces, has played a decisive role in the emergence of the modern cultural market as part of the public realm. In addition, such an emergence was accompanied by the advent of modern publications, namely, books and newspapers. A literary movement is often the prelude to a social revolution or transformation. However, literature enters the public realm only when it participates in the exchange of ideas and thoughts, that is, the cultural market. Only then can issues discussed in the literature make their way into public discourse and public opinion, affecting the public realm of politics and ultimately triggering social transformation and reform.

1 Karl Marx and Friedrich Engels, The Communist Manifesto.

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The cultural market reflects the cultural and economic relations among people under certain social conditions and the ensuing social and political relations. It is because of this that a series of system designs and legal provisions on the market access of cultural commodities, the licensing and review of the production and service of cultural commodities, and other matters are created and formulated by different people, affecting the changes and choices of the cultural market. In this sense, behind the market allocation of resources is the allocation of economic and cultural relations among people. All socioeconomic activities under modern conditions are the result of people’s choices in a certain social process under certain conditions of social productive forces. This collective choice is closely related to and even shares the same structure as that of people’s choice of the national system. In addition to engaging in varied socioeconomic activities, different groups of people also settle on their respective national systems. The latter segregates the economic activities and behavior of people in different systems. Furthermore, the market and the cultural market are artificially separated due to differences in ideology and the value system, resulting in the division of the cultural sector into the cultural market and the “cultural government,” which are essentially owned and controlled by the government. Both are products of human action, reflecting human will and nature. Different governments practice different values to reflect the public will of the ruling party and social subject, which is manifested not only in the political system design concerning the choice of social and economic system but also in the choice of economic activities. The market economy and the planned economy are both the result of this choice. The market is born out of the selfishness of people, while our publicness creates the government, hence the contradictory relation between the two. Together, they contribute to the development of human society, the evolution of civilization, and the ups and downs of the cultural market. 2. The government and the market form a dichotomy in human society Government forces and market forces, as well as the different systems formed by them, exert a profound influence on the market and play a decisive role in the allocation of cultural resources. To some extent, the mechanism of government as a state machine evolves from a demand

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for rules, a large part of which is generated by exchange, that is, the behavior of people in the market. The market is characterized by anarchism, which may be used to monopolize and deprive others of their right to legal transactions, directly infringing on the legitimate rights and interests of individuals. As a result, the government, a force that overcomes the market and restrains market anarchism, comes into being as a product of market development. It then evolves into a force of alienation in the market, affecting and intervening in market behavior. A dichotomy is thus formed between the government and the market, propelling human society forward. To a considerable extent, nongovernmental organizations (NGOs), such as guilds, chambers of commerce, and societies, which are established to protect their own interests and intervene in the market, share one characteristic of a “subnation,” that is, mandatory punishment. The larger the geographical span of such NGOs, the stronger their subnational characteristics. International NGOs such as the WTO, in particular, are an important force that influences market movements and market behavior. Therefore, denying state intervention in the market or advocating for deregulation of it makes no sense in general. The government and the market form a social ecosystem created out of people’s economic activities and serve to regulate such activities and the economic relations among people. The two work compatibly together as an organic whole rather than in opposition to each other. Each depends on the other for survival, as the absence of either side will render the economic activities of people flawed and infeasible. Built by people in the service of their development, the government and the market function, respectively, as “the visible hand” and “the invisible hand.” They are like one’s right and left hands, coordinating with each other in everything one does with them. The relationship between the government and the market in the cultural sector is an extension of their relationship in the economic field and an important component of the general relationship between the two. It is a far more complicated relationship due to the great complexity of the spiritual activities of people. As one of the relations between people and society, however, it is still characterized by a dichotomy. Freedom is essential to the spiritual production of people, but it should by no means come at the expense of the freedom of others and the community. Who, then, will safeguard such freedom? The answer lies in the government, or state power. This is how the relationship between the government and the cultural market comes into being, followed by a series of contradictory

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movements between the two: from regulation to deregulation and back to regulation again. The cycle continues until the end of human society. For a country whose government and market forces are underdeveloped, it is undoubtedly the primary responsibility of the government to effectively establish a stable mechanism of market protection to maximize social stability and economic development. It is impossible for the market to play its decisive part in resource allocation if we fail to maintain market order. Through its active intervention, the government plays a vital and even decisive role in restoring market functions and perfecting the market mechanism. The Marshall Plan, for example, was critical to the restoration of the postwar economic order in Europe after the Second World War and nearly devastated its entire economic system. Europe alone would not have been able to bring the continent’s production back on track within a short time. Under these circumstances, aggressive government intervention, principally the massive U.S. aid program for Europe, known as the Marshall Plan, became an irreplaceable force for markets. To a large extent, the revival of the European cultural market after World War II was also driven by governments, especially the American government. Both Who Paid the Piper? The CIA and the Cultural Cold War 2 and Postwar: A History of Europe Since 1945 3 has given a clear account of this part of history. Any market is built on institutions and exists within institutional frameworks. These institutions entail a set of regulations and rules, whether in a planned economy or a market economy, whether the dominant approach is structuralism or neoliberalism. Any such regulations and rules are always formulated on the principle of maximizing self-interest rather than the interests of others. In this sense, all markets are conservative, not open, hence the need to open up markets. However, it is difficult for one market to demand that another open up. Since the market is a product of institutions and institutional problems require institutional solutions, a series of agreements between governments on matters such as economic exchanges, economic cooperation, and economic development have emerged, as well as institutional constraints set by these agreements. Problems in the market sometimes defy solutions without government 2 Frances Stonor Saunders, Who Paid the Piper? The CIA and the Cultural Cold War, trans. Cao Dapeng (Beijing: International Cultural Publishing Company, 2002). 3 Tony Judt, Postwar: A History of Europe Since 1945, trans. Lin Xianghua et al. (Beijing: New Star Press, 2010).

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intervention, and war is one such mechanism of government intervention. The bourgeoisie, for example, has forced open the world market with guns and cannons. Capital alone would not have achieved global expansion without the bourgeois government acting as an ultimate decisive force, of which the Opium War in the modern Chinese market is a typical case. The establishment of the global market system depends on the effective cooperation between countries and governments, even under the conditions of globalization. In the 1980s, alone, many countries opened their markets to the outside world not as a result of natural selection but because of interference from Western developed countries led by the United States. Sanctions are often used by them as an important means to interfere in the decision-making of other countries and governments. Similarly, governments often play a major role in opening-up international markets for their domestic companies. After all, no country will voluntarily open its market to another without government intervention. By seeking and introducing markets for its domestic products, the government intervenes in the market as an important force driving its development. This is true not only in the general sense of the market but also in the cultural market. A typical case would be the U.S. government, which habitually uses relevant provisions of the WTO to force other countries to open their markets to American cultural products; otherwise, they would be subject to economic sanctions and even political interference. 3. The purpose of the government should be to create and maintain an environment that ensures the security of the cultural market Regulation of the cultural sector is the most important manifestation of the relationship between the government and the market. It is not a question of whether the government should intervene in and regulate the cultural market but how. There is no cultural market without the intervention and regulation of cultural behavior. As long as there are domestic bullying and monopolization and foreign invasions in the cultural market, the government has an inescapable responsibility to protect and maintain the sacrosanct cultural rights of individuals and the country. Therefore, the sole purpose of the government in using state machinery to intervene in the market is to create and maintain an environment that ensures the security of the market economy by punishing and preventing actions

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that disrupt market functioning and protect individual property from encroachment. This is the most fundamental relationship between the government and the cultural market. As a result, the establishment of a cultural market access system has become an essential building block of modern states. Terms such as government-owned, public-owned, and state-owned describe the nature of ownership of economic organizations, as opposed to private ownership and joint public–private ownership. This is only a division or distinction of the nature of market entities. This does not mean that government-owned, public-owned, and state-owned enterprises can intervene in the market on behalf of the government or in the name of the government, nor does it indicate the relationship between the government and the market. Despite being different in terms of their nature of ownership, these cultural enterprises participate in fair market competition with other cultural enterprises on an equal footing, without any special pricing power in the cultural market. They should, through their own behavior in the market, correctly reflect the fairness and impartiality of the government in allocating cultural resources rather than distort the intention of government intervention. In the case of such a distortion in the cultural market—a monopoly on the price of certain cultural goods, for example—state-owned or public-owned cultural enterprises can take positive action through the market economy to help restore market order, thereby maintaining the sound development of the cultural market. It is almost an iron law that strategic resources involving national security have been monopolized and regulated by the government, given its decisive role in the allocation of resources since ancient times. Examples include the monopoly and regulation of salt and iron since the Han Dynasty and the state monopoly of cultural resources concerning national cultural security, such as radio and television broadcasting. Similar cultural policies have been adopted in many countries around the world under the rule of law, although some still have private broadcasters. However, at the present stage, China implements a state monopoly on radio and television in general. Nongovernmental organizations and cultural workers are allowed to engage in the production of radio and television programs, but they do not have the broadcasting authority. When a certain intellectual product becomes a strategic resource for a country within a particular historical era, the market for such a product will be regulated in a way that ensures national security. For example, the principle of cultural exception—to treat culture differently from other commercial

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products—introduced by France and adopted by the European Union and the monopoly of the Internet root servers in the United States are typical manifestations of the relationship between the government and the market of strategic cultural resources in the age of globalization. Therefore, when we talk about the relationship between the government and the cultural market in the allocation of cultural resources, we are referring to the international market as well as the domestic market. In that sense, the opening of any kind of cultural market is relative, while its protection is absolute. The difference is only one of degree. Generally, market entities in a strong position in the allocation of cultural resources will always demand that the disadvantaged open up their cultural market unconditionally, while they themselves constantly practice the policy of trade protectionism in their own cultural market. Such is the double standard of the relationship between governments and markets in the cultural sector. 4. The cultural market, in turn, influences government actions The market is not indifferent or inert to government intervention. In many cases, government intervention in the market is actually a result of market behavior, or more specifically, negative market behavior. In other words, it is market behavior that triggers government intervention. One of the most common theories in almost all studies on the legitimacy of government intervention mechanisms is market failure. Market failure is a product of the internal law of market movement, the external manifestation of the market self-regulation mechanism, and a result of the adjustment and improvement of the self-circulatory system of the market. Government intervention serves only to ameliorate market failures. The market and the government as an organic whole are the objectification of the essential power of people. All market failures and government interventions, therefore, should be regarded as functional self-improvement reflecting the law of market movement. One should never overreact to either of them. Following this logic, what enables the market to play a decisive role in resource allocation is not some special law but rather the government itself. As far as the state is concerned, government intervention is merely an economic policy aimed at further liberating social productive forces and returning to other market entities the control of economic activities that were previously overregulated.

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In doing so, it helps to improve the relationship between the government and other economic and market entities in all economic activities, thereby maximizing the benefit of social resource allocation. Therefore, special attention should be given to the tremendous effect of the market on government actions. (1) The influence of the international cultural market on the domestic cultural market In addition to cultural and political relations between countries, the international cultural market also involves their economic and trade ties. Cross-cultural exchange outside the normal range, as well as the interference of cultural interest groups and international cultural capital markets, exerts a great influence on the cultural market of a country. In some extreme cases, the cultural policies and systems of a country are shaped by such an influence. Capital, by nature, is meant to be expanded. Its expansion is based on the principle of profit maximization. Consequently, capital and huge cultural interest groups composed of such capital, given the possibility of maximizing capital value in a certain cultural market, will be tempted to force open this cultural market through all legal and illegal means, including international rules and regulations. The structure of capital and interests in the international cultural market will thus be altered. One of the principal ways in which the international cultural market influences the domestic cultural market of a country is by forcibly changing the design of its system. The ultimate opening of this market happens through interference in government actions. In negotiating its accession to the WTO, the United States had made repeated trials of strength with many countries and regions on the issue of cultural market access. The reason is clear: This issue concerns not only the relationship between one cultural market and another but also the relationship between one government and another and between the international cultural market and the domestic cultural market of a country. Underneath this competition over cultural markets lies a trial of strength between two different cultural market systems. (2) Strong cultural markets and weak cultural markets The strong and the weak are at opposite ends of a spectrum. These two forces exist as long as there is competition. This, of course, applies to the cultural market. According to the theory of the modern world system

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founded by the late Immanuel Maurice Wallerstein, one of the most influential sociologists of recent decades, the modern system of states is divided into the core, the semi-periphery, and the periphery. A core state is usually one that is politically, economically, and culturally powerful, with a say and decision-making power in world affairs, an influence over other countries, and the right to make international rules. Other countries and groups of countries, especially those on the periphery, are generally dominated by the core states and have little say in international affairs. In the least developed countries, where even the proper functioning of the government depends on assistance from the international community, there is a general lack of competitive strength and influence in markets, including the cultural market. If left unprotected, the cultural markets of the peripheral states, which are weak compared with those of the core states, will not be able to survive on their own, let alone create a market that will play a decisive role in the allocation of cultural resources. For them, the issue of national cultural security is unavoidable. It is based on this consideration that cultural exceptions have been provided specifically for weaker cultural markets by the GATT, replaced now by the WTO, in an effort to preserve cultural diversity. (3) Sovereign cultural markets and nonsovereign cultural markets A sovereign cultural market, as the term suggests, refers to the cultural market of a sovereign state. One of its prominent features is that cultural goods and services can be traded freely within the market, but all transactions must comply with the laws and decrees concerning the cultural market of the host country. Nonsovereign cultural markets are essentially different customs territories. Hong Kong, Macao, Taiwan, and the Chinese mainland, for example, are four nonsovereign cultural markets with their own market systems. They are not sovereign states but different customs territories within China. A common system has been formed among them with special trade arrangements that only apply to these four regions. Between these cultural markets, there are both competitive market relations and noncompetitive market relations, that is, reciprocal relations between different cultural market systems within one country. The central government shall not interfere with the internal affairs related to the construction and development of the cultural markets of Hong

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Kong and Macao. This can be regarded as a case of the influence of cultural markets on the way the government governs culture. 5. Means of government intervention in the cultural market The means and mechanisms of government intervention in the cultural market vary according to country and region, as well as cultural tradition, political belief, and ideology. As far as ethnicity is concerned, there are cultural markets with one ethnic group and those with diverse ethnicities. In terms of the continent on which the cultural market is located, there are Asian, European, African, North American, South American, and other cultural markets. Generally, however, government intervention in the cultural market can be classified in the following ways: active intervention and passive intervention; direct intervention and indirect intervention; institutional intervention and noninstitutional intervention. (1) Active intervention and passive intervention Active intervention, also known as positive intervention, is the way in which the government takes initiative to set standards and build an early-warning system for activities and behavior in the cultural market. It aims to provide a safety net for the cultural market by making sure that individuals are free to engage in spiritual production without interfering with the cultural freedom of others and the community. This kind of intervention is based more on the need for macro cultural governance through the formulation of a series of cultural laws. For the sake of procedural justice, a national cultural law must be discussed, deliberated over, and voted on by the national legislature. Therefore, once passed, such a cultural law will be binding on the cultural activities and behavior of any cultural market entity, enabling the government to actively intervene in the market. Passive intervention refers to the remedial measures taken by the government after the occurrence of cultural events due to the lack of a prior system design and a prewarning mechanism for possible events. It is often found in emerging cultural markets where people tend to underestimate the complexity of a cultural event and the huge impact it may have on the spiritual order of a society.

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(2) Direct intervention and indirect intervention Direct intervention refers to government intervention in cultural market behavior through compulsory administrative means. In China, for example, differential pricing for movie tickets has been enforced between urban and rural areas. Based on the difference in per capita disposable income, the ticket price for the same movie varies from region to region, especially between urban and rural areas, to ensure that rural residents enjoy the same cultural consumption rights as their urban counterparts. Similarly, unified pricing of textbooks for primary and secondary schools is implemented to safeguard the right to compulsory education of children from old revolutionary base areas, minority-inhabited areas, frontier areas, and poverty-stricken areas, as well as low-income families. This is an intervention mechanism commonly practiced in many welfare states. Indirect intervention means that the government does not directly intervene in pricing but uses tax, credit, and other policy tools to influence the behavior of market operators to regulate the development of the cultural market. For example, the state stipulates that the export of cultural products and the wholesale and retail sale of books shall be exempted from value-added tax. The purpose of this policy is to boost the cultural market by benefiting the people, reducing the tax burden on cultural enterprises, and improving the market circulation of cultural products. In addition, the Chinese government also indirectly guides service in the cultural market by curbing extravagance and luxury in administrative organizations. In August 2013, the Notice on Putting a Stop to Extravagant Spending and Encouraging Frugality in Gala Hosting, along with “Eight Provisions” on correcting unhealthy practices, was jointly issued by the Publicity Department of the CPC Central Committee, the Ministry of Finance, the Ministry of Culture, the National Audit Office, and the former State Administration of Press, Publication, Radio, Film, and Television. Following the requirements of the central government, major TV stations and social organizations suspended or canceled such galas and festival performances, which directly resulted in a decline in revenues in the domestic performing arts market. The total revenues of state-owned performing arts companies, for example, fell by two-thirds in 2013 compared with 2012. According to the Statistical Analysis of the Performance Market of Beijing in 2013 released by Beijing Trade Association for Performances, there

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were 23,155 commercial performances held in the city’s 123 commercial performance venues that year, with a total audience of 10.14 million, down 7.8% from the previous year, and gross ticket sales of 1.442 billion yuan, falling by 5% compared with that of 2012.4 (3) Institutional intervention and noninstitutional intervention Institutional intervention is to intervene in the cultural market through the creation of national cultural systems, such as book and newspaper censorship and film rating. This form of intervention is long-lasting and irresistible and will not change unless the system is amended. Noninstitutional intervention, on the other hand, is mostly manifested in provisional arrangements in coping with state emergencies. For instance, press censorship is often carried out during wartime, and in response to public health emergencies, the cultural markets of some areas or even across the country are usually closed. A typical example is the control of cultural markets in most parts of China during the outbreak of SARS, a public health crisis. Noninstitutional intervention is also a common practice in the international community. Striking a balance between freedom of speech and regulation of the cultural sector is, to some extent, the key to properly handling the relationship between the government and the cultural market. It is, however, a tricky task not only for China but also for the whole world. American economist Ronald H. Coase presented an essay titled “The Market for Goods and the Market for Ideas” to an annual meeting of the American Economic Association on “The Economics of the First Amendment” in December 1973. In the essay, Coase analysed the government’s differential regulation of these two markets and revealed the fallacious arguments behind it. From the perspective of law and economics, he suggested that the contradictory views about the performance of government in these two markets—that is, government regulation is desirable in the market for goods, while the market for ideas prioritizes freedom of speech—should be abandoned. It seemed to Coase that there is no fundamental difference between the market for goods and the market for ideas and that “in deciding on public policy with regard to them, we need to take into

4 “Common practice of frugality has wiped out two-thirds of the revenues of stateowned performing arts companies,” China Business News, January 15, 2014.

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account the same considerations.” In other words, instead of applying conflicting approaches to different markets, the same approach should be used for all markets when deciding on public policy. Coase has essentially proposed not only the rationalization of the market mechanism of freedom of thought but also the legitimacy of ideas as goods subject to market competition and transactions. These two issues are reflected in the conflict between the First Amendment of the United States and its market laws, as well as in the paradox between the government regulation of the BBC and market freedom in the United Kingdom.5 The relationship between the government and the cultural market has thus become a universal conundrum.

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Cultural Industry Planning

It has been an important lesson learned by China since reform and opening-up to formulate plans that guide the development of its cultural industry. Such development plans, a distinct policy and strategic characteristic of the cultural industry of the country, are also a means for the government to manage and regulate the cultural market and its relationship with the government. We should learn from past experience and make better plans for the future development of the cultural industry. This is an issue that needs to be taken seriously. 1. The essence of cultural industry planning The Tenth Five-Year Plan mapped out by the Ministry of Culture was China’s first development plan for the cultural industry. Strictly speaking, it was only a policy plan. For the development of the cultural industry in China, however, it was a significant milestone. It was out of this plan that the Eleventh and Twelfth Five-Year Plans came into being. In addition to development plans formulated by the Ministry of Culture, national and regional plans have arisen, as well as the Plan on Reinvigoration of the Cultural Industry, a special plan approved by the State Council. Cultural industry planning is an emerging and highly comprehensive category of planning covering urban and rural areas and encompassing 5 Ronald H. Coase, “The Market for Goods and the Market for Ideas,” in Essays on Economics and Economists, trans. Ru Yucong and Luo Junli (Shanghai: Shanghai People’s Publishing House, 2010), 78–90.

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politics, society, culture, and economy. It integrates development plans for cultural industries, including industrial parks, across China and those for cultural tourism combining the cultural industry and the tourism industry. As a result, its content ranges widely over the relationship between people, society, and nature. Before the Tenth Five-Year Plan, there was no cultural industry planning in China and therefore no relevant theories. Planning at the national level remained policy-oriented. Essentially a redistribution of resources, the process of planning reestablishes the relationship between people and objects, be they social, natural, economic, cultural, or political objects. It is a system of interrelations between people, society, and nature, for which reason it is necessary that we properly handle the relation between the various parts of the system, the relation between the new system and the original system, the rationality and legitimacy of these relations, and so on. What sets development planning of the cultural industry apart from that of other industries is its spirituality, namely, that the former, in essence, seeks to rebuild the spiritual relationship between people, society, and nature and the spiritual order among them. The cultural industry is a system of spiritual production and cultural expression for people, a place where humanity finds spiritual sustenance. System integrity is its essential characteristic. Taking architecture as an example, the Hui-style traditional dwellings in Hongcun and Xidi, two traditional villages located in Yi County, Huangshan City of Southern Anhui Province, built during the Ming and Qing Dynasties, were inscribed as World Cultural Heritage sites by UNESCO. Although it was not designed with the cultural industry in mind, this architectural complex embodies the rational relationship between people and nature and the social relations based on it, giving us much enlightenment. This is a relationship that is conceptual and spiritual. It is architectural planning without a definite plan, integrating a residential concept reflected in what is built and why and a systematic idea of the relationship between people and nature. The practice of feng shui, or geomantic omen, in China is in fact a form of physical and spiritual expression based on a deep understanding of the relationship between people and nature and between people and society, as well as people’s knowledge, understanding, and hope of life. The house inhabited by a family is symbolic of their physical and inner world. It represents a way of living based on which people form their perception and judgment of the dwellers. Such is the structural and systematic integrity of architectural planning, where the spiritual order is

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constructed through the expression of the inner world of individuals. Our planning for the cultural industry should also follow this approach. What is cultural industry planning? It is to establish a reasonable spiritual order that includes all cultural relations between people and society and between people and nature. The advent of creative industrial parks is a case in point. In Western developed countries, the most common approach to transforming industrial ruins is through functional renovation. A new relationship is thus built marked by the inheritance and innovation of industrial civilization by people. The innovative transformation of the Ruhr, Germany’s former largest industrial region, is a typical example. It conveys people’s understanding of and respect for history, as well as their criticism of and reflection upon past practices. Thus, while building a new relationship between humanity and our historical civilization, we should seek to discover new methods and driving forces to advance the progress of civilization and promote and create new forms of civilization while reflecting on our historical civilization, all in an effort to rebuild a healthy interrelation between humanity and civilization. This should be an essential approach to developing cultural and creative industrial parks, rather than simply enclosing a plot of land and putting up a sign, which runs counter to the healthy interrelation between humanity and civilization. In many cases, the development of cultural industries is not planned but a spontaneous choice brought about by the evolution of humanity’s relationship with society and nature. The emergence of cultural industrial parks in China has that characteristic. Tianzifang, a labyrinth of traditional alleyways filled with trinket shops, bars, restaurants, and art galleries in Shanghai, and the 798 Art Zone in Beijing, for example, were not part of the original development plans for the two cities but were later incorporated into cultural industry planning. In this sense, the development of cultural industries has its own laws. The formulation of cultural industry development plans, therefore, should follow and reflect such laws. From the perspective of the government, cultural industry planning is one of the most important public cultural policies, with the strongest and most lasting external binding force, and should be executed with the firmest determination. In cultural industry planning, a wholesome cultural ecological environment should be seen as a red line. Planning for the whole industry and specific cultural and creative industrial parks should never be an afterthought but an aforehand and concrete step toward

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realizing the overall plan. To build a wholesome cultural ecological environment is to create an environment that is conducive to the rational spiritual relation between people and society and between people and society and to the reengineering of cultural resources. In other words, ecological planning should take precedence over construction planning for cultural development. It is the only way to ensure that the functional orientation of each project is consistent with the overall planning objectives and to fundamentally overcome the problems prevailing in China’s cultural industry planning, namely, the excessively high proportion of facilities construction, including that of cultural industrial parks, high project density, lack of planning in terms of the cultural ecological environment, and a low threshold for content innovation. Cultural industry planning should always focus on enhancing the capacity for creative cultural production and boosting the cultural creativity of every individual. Achieving such a goal, namely, creating a healthy ecological environment, should be a basic requirement in cultural industry planning. 2. Ecological thinking in cultural industry planning Contrary to GDP-oriented thinking, ecological thinking in cultural industry planning gives priority to the integrity of the spiritual order and interrelation of people, society and nature, the sustainable development of the three, the overall security of cultural ecology, and the coordination between the security of our homeland, the mental health of people and lasting public cultural interests. It does not see cultural industry planning merely as a road map or timetable for personal political achievements or make plans based on immediate results. Instead, the emphasis is placed on the spatial planning of the cultural industry and structural planning within the industry by first controlling areas where the development of cultural industries is not allowed. Hence, the so-called positive and negative lists of choices have been made to guide cultural industry development. To protect our cultural ecological interests, the negative list is adopted in areas where mandatory control is implemented on the development of cultural industries, specifying the types of areas to be controlled and the intensity of such control. This is the bottom line, or a red line that cannot be crossed, in China’s cultural industry planning. Such a red line should be consistent with that of the planning for major national functional zones promulgated by the state and in accordance with

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the geographical distribution of our population. It is inadvisable to plan the large-scale development of cultural industries in ecologically fragile and sparsely populated areas, as it violates the principle that the market should play a decisive role in the allocation of resources. This is a red line, an important principle, and a bottom line in cultural industry planning that cannot and should not be broken. To plan and not to plan is of equal significance in the cultural industry. Today’s development and prosperity matter, but it is even more important to enable our children to develop and prosper. The principle of sustainable development is to satisfy the needs of the present generation while also leaving enough room for future generations to survive and develop, materially and, perhaps more importantly, spiritually. In other words, we should provide plenty of opportunities for cultural creation for the coming generations. In the development and planning of cultural industries, unconditional respect should be accorded to natural and cultural heritage. For example, it is necessary that cities set aside enough walking space for pedestrians, as sidewalks that are too wide or too narrow are simply unsuitable for urban life. The Death and Life of Great American Cities, a 1961 nonfiction book written by Canadian author Jane Jacobs, has plenty to teach us on this matter. The book delves into the ecological planning of modern urban space and has become a bible for all endeavors in that field. There is a memory about home shared by this generation: We cannot help but feel emotional when we finally reach home after a long and tiresome journey and see that old camphor tree and that tall pagoda tree at the entrance of the village and the vendor’s stall at the entrance of the alley; they tell us that we are home. We might not be able to find our way home once those things are gone. What should we do to leave enough room for imagination and abundant cultural resources for the cultural recreation of generations to come? And, to save us from the doom of failure, we should also think about how those planning projects that set out to advance the development of our cultural industry fell through. Culture is a rarely available strategic resource, as is cultural industry planning. They cannot afford to be consumed at will. Life is constantly changing, but the changes should never affect the ecological unity of the natural world. Whatever kind of cultural landscape we humans choose, we have given it a certain degree of rationality, which is the inner harmony between humanity and nature. It is such harmony that creates society and thereby the organic unity of the social ecology composed of humanity and nature. This is the foundation of the culture

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and civilization that can only be created by a species such as humans. It is the basic law governing all our development today, and no development plan should ever break this law. However, if we look at some of the plans for cultural industry development we have issued and are considering, how many of them have violated such a law? This is why the Thirteenth Five-Year Plan for the development of cultural industries was a must. Without it, there would likely be an abrupt stop that throws the entire cultural industry out of order, causing a great waste to the country’s cultural resources. However, in view of the aftereffects of the two five-year plans of the previous decade, we should assess cultural industry planning from an ecological perspective: Why do we develop in this way? What is the cultural ecological basis? In addition to benefiting the current generation, what kind of cultural resources can be created or saved through our plans so that future generations can build on our achievement and create an abundance of cultural heritage for their children and grandchildren? 3. Cultural rehabilitation Rehabilitation is a common practice in agriculture that helps ensure the long-term yield and quality of crops. Instead of depleting soil fertility for short-term gain, it allows land to recuperate and maintain its ability to reproduce. One of the most frequently used methods of land rehabilitation is to plant different crops in rotation. Similarly, to reverse the damage to our cultural ecology, we should actively implement “cultural rehabilitation.” This is a simple view of cultural ecology that seeks to minimize unbridled pursuits of cultural consumption by vigorously promoting a practice consistent with traditional Chinese cultural habits. It advocates that we show respect for the cultural history created by our ancestors to obtain value support for the rationality that is essential to the sustainable development of the cultural industry. Cities, for example, should downplay their unrealistic pursuit of such titles as a UNESCO Creative City or joining the UNESCO Creative Cities Network, as their cultural traits and characters should be manifested in the authentic cultural lifestyles of its people, rather than a poster for show. Cultural rehabilitation is not to simply restore ancient ways, especially not in our living space, as such “fake antiques” have been rejected by society. It allows people to return to a natural ecosystem where nature is in harmony with society. Driving the original inhabitants of ancient towns and villages out of their homes

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for the sake of developing cultural industries would end up disrupting the cultural ecological balance. These ancient towns and villages are not just a setting for movies and television dramas but their actual home. Without the people living and breathing in them, they would lose their vitality. The same is true of cities. Creative industrial parks emerged in cities originally as a way to save our home through spiritual reproduction, a home that retains the collective memories of numerous people. Turning them into cultural real estate destroys the last bit of our collective memories of this home. Therefore, what we should create and leave for our descendants is cultural space that contains not only the traces of our lives but, more importantly, the natural and cultural heritage of humanity, as well as a place for continuous imagination and creation. 4. National culture audit As a key indicator of our modern system and capacity for national cultural governance, the modernization of law-based cultural governance has an immediate impact on not only the legal environment of cultural industry development but also the cultural security of a nation and the formation of its cultural soft power. It is a system, a vision, and an ideal state of society and culture and therefore should be a belief and way of life practiced by people. Law-based cultural governance is an integral part of the law-based governance of a country. The key to a modern system of national cultural governance lies in law-based governance, that is, cultural governance in accordance with rules and regulations. Without a clear and regular set of cultural rules preformulated for the cultural development of a country, people will not be able to anticipate the consequences of their cultural actions, leading to a sense of cultural insecurity. However, creating a scientific system of indicators to evaluate the scientific modernization of law-based cultural governance in our country will be a severe challenge. We have made a preliminary attempt in this regard and adopted the same indicators used to evaluate cultural industry development to maintain the consistency of tools. Whether such an evaluation method is scientific remains to be tested. However, we did it because we wanted to be criticized and corrected, and through this to set up a sound system of indicators for law-based cultural governance that is necessary for and truly reflective of the law-based cultural governance in China. Ultimately,

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a stable cultural ecosystem will be created for the sustainable development of the cultural industry. Therefore, a national system of culture audit encompassing the review of development plans for the cultural industry should be established. First, we should review the implementation of the current five-year plan for cultural industry development and provide a context of national conditions for compiling the next five-year plan with the help of a scientific evaluation system. Second, an indicator system for evaluating cultural ecology should be created to screen cultural industry development projects and remove those that are not in line with our objectives; this is done to maximize the feasibility of development plans and minimize the waste of resources, thereby creating a healthy environment for cultural industry development and reshaping the social image and government perception of cultural industry planning. Finally, a negative list should be formulated for cultural industry planning; we should all have a clear understanding of which regions are unfit for cultural industry development, what types of cultural industry are not allowed in those places, and which cultural industries are prohibited anywhere. After all, not every kind of cultural industry is suitable for development in every region. 5. Mistakes in China’s cultural industry planning The historical geography of China’s cultural industry is currently undergoing unprecedented changes. The convergence and compression of time and space, as well as the turbulent readjustments in major market entities, have resulted in the greatest divergence, reshuffling, and transition in the cultural industry that the country has witnessed over the last century. What primarily characterizes this thorough transition is that China has begun to advance the development of its cultural industry through proactive planning. The formulation of national development plans for the cultural industry since 2006 has subverted and reinvented the historical and geographical ecosystem of the cultural industry at a scale never before seen. No other industrial form seems to hold such energy. The natural and historical generation of culture is a process of ecological evolution that is distinctly progressive and closely associated with the cultural path dependence of the migration habits of humans in choosing livable space. It can sometimes develop into a process of sudden

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and explosive growth, but this is often caused by the mutation of the original cultural gene under the action of external forces. The significance of regional cultural industry planning, especially in a given historical and cultural space, lies not only in the development and construction of a few projects but also in the creation of a new cultural ecological environment that induces the variation of cultural biological habits in humans. For instance, the Shaolin Temple, a famous Buddhist monastery located in Mount Songshan of Henan Province where Shaolin Boxing was developed, has turned from a sacred place into a tourist attraction and entertainment product known to the whole world. This is due to the change in its function and thereby the variation of the cultural biological habits of the people who come to visit: Tourists have come to the temple not to worship the Buddha in search of salvation and comfort but to satisfy their curiosity about its legend catalyzed by a Chinese martial arts film by the same name starring Jet Li. The Shaolin Temple has become a consumer product, turning religious spiritual consumption into cultural tourist consumption. This brings us to a question about the development of China’s cultural industry: How can today’s cultural industry planning help with the continuation of the cultural biological habits of people? Should we follow the temporal logic of the original cultural ecological environment or disrupt the unique cultural ecological history of a region by planning, designing, and creating exotic cultural “species” with no connection whatsoever to the original history? Deconstructing the living environment of any species at a large scale will inevitably rupture the biological chain of the original ecological community. This applies to human culture as well as nature. Cultural industry planning in any sense of the term would entail the deconstruction of the original historical geography if we as planners lose sight of the historical and geographical context and rely heavily on technology. Eventually, our sense of cultural identity and spiritual sustenance generated in the original system will also be compromised. Such consequences could be beyond the subjective will of cultural industry planners. Therefore, we must not forget for economic purposes the significance of the cultural scene to our cultural identity today. To transform an advantage in cultural resources into cultural industrial strength, we must first understand the relationship between historical geography and cultural industry development. All cultural resources are historical cultural resources that are generated and accumulated with the development of historical practices within a specific geographical space. Because of their

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history, cultural resources have acquired the attributes of different ages, and as a result of such attributes, the advantage in cultural resources varies with the geographical space in which they exist. At the same time, it is precisely due to the geographical constraints on the historical formation of the attributes of cultural resources that diverse cultural resources have been generated in various spaces during the same historical period. Such interactions between history and geography are a prerequisite for the generation of all cultural resources. Without specific historical and geographical conditions, no human activity will be able to bring any cultural resource into existence. History and the geographical space that it is based in are thus connected to the human activities in this space. Therefore, to translate cultural resource superiority into an advantage in developing cultural industries, we have to manage not only the changing historical geography of the cultural industry but also its connection to past and present human activities. The achievement of any planning goal happens over a time span, and the space in which the goal has been achieved is a concentration of that time span. Today, there is no space in which human beings live and carry out activities that do not concentrate such a time span, which is history. Any cultural industry planning and the realization of its goals today, therefore, are changes made to the historical and geographical conditions of the past. How, then, can we maintain connection to the trend of history and consistency with the geographical context in cultural industry planning and the setting of its goals? Rather than arbitrarily altering the historical geography, the formulation of goals in cultural industry planning should be a reasonable extension of history and the legitimate shaping of geography. However, all too often, we have confused cultural industry planning with urban planning, misusing concepts such as vertical, horizontal, parks, districts, development zones, and circles. These are all terms relating to space in urban planning or industrial economic planning and, strictly speaking, have nothing to do with cultural industry planning. There are two kinds of industrial planning. One covers arrangements for the future development of the industry itself, including the industrial structure, industrial layout, and industrial policies; the other is the planning of major projects that epitomize the spirit of industrial planning and facilitate the achievement of its strategic goals, including major scientific research projects related to industrial upgrading and major investment and construction projects in strategic and key industries. Industrial planning in the strict sense of the terms refers to the macro development planning

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of an industry focusing on strategies and policies. It guides and regulates the overall situation and is, to a certain extent, legally and administratively binding. It concerns the overall strategic objective of a country or region as well as the national economy and people’s livelihood. Therefore, all major projects must go through repeated feasibility studies before they are included in such planning. This is industrial planning in the general sense. The development of the cultural industry will likely be a leap in the dark without scientific planning. The concepts and philosophies used in urban and regional planning are not entirely inapplicable to cultural industries. The idea of “clusters,” for example, can be used in both areas. However, a major characteristic of the cultural industry is that its forms and clusters are, to a large extent, not a product of planning but the result of natural growth according to the internal logic of industrial evolution. For example, in recent years, creative industries and creative industrial parks have emerged in large cities such as Shanghai, Beijing, and Hangzhou, not because of planning. They were not even written into the documents on the original development strategies and outline of the development plan for the cultural industry formulated by these major cities. Many well-known creative industrial parks, including Tianzifang in Shanghai, the 798 Art Zone in Beijing, and Loft 49 in Hangzhou, were all created out of the common need for artistic development and strategic economic restructuring and transformation for new spaces. Domestic demand and transformation are the two basic and indispensable driving forces for the birth of modern creative industries and creative industrial parks as well as other cultural industries and their specific forms. This is a law governing the development of the cultural industry. To cite another example, there was nothing about the online gaming industry in the cultural development strategies and plans for developing the cultural industry of Shanghai in the 1980s and 1990s. The reason why it first appeared in the city is directly related to the historical consciousness and sense of history developed in the geographical and cultural environment of such an international metropolis as Shanghai. To this extent, the founding of Shanda Group, a leading interactive entertainment media company, in Shanghai was also a natural and historical process. There are many essential prerequisites for the development of the cultural industry, especially the emergence of a new form of cultural industry: The online gaming industry could not have been born without the Internet, just as there would be no printing and publishing industry if it were not for the

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invention of printing and no film industry without the modern industrial revolution. All these are the products of the process of searching for new spaces and forms of expression as cultural productive forces have progressed to a certain point. To a great extent, the development of the cultural industry is a result of natural selection as the form of culture changes. The emergence of creative industries and creative industrial parks, as stated above, is often associated with industrial restructuring and transformation rather than the act of cultural industry planning. However, once the emergence and development of such cultural industries have matured into a paradigm and replicable model, they can serve as a reference for the development of the same cultural industry in other regions or the next new cultural industry. This should be a scientific relationship between cultural industry development and cultural industry planning. Such a relationship is considered scientific because it has helped the cultural industry achieve natural growth both historically and geographically. Creative industrial parks retain the ways in which the form of civilization of a region used to be represented so that the history of the past can be preserved in memory. Moreover, such a representation is based on the original form and discourse of landscape, which embodies a strong sense of geographical identity. This geographical identity is an important and necessary “text” that helps us interpret, understand, and identify with the culture and history of a place. Any subversion of such a text by depriving it of its geographical and historical features will only lead to confusion in the future, as we will not be able to rely on past experience. It was not until human society embarked on a movement known as postmodernism that we finally realized this. As a result, established industrial countries such as the United Kingdom were the first to awaken to the importance of creative industries, which then became a part of the national strategy and policy of the British government in planning the next decade before entering the twenty-first century. In addition to providing strategic guidance for the adjustment of the British economic structure and its industrial transformation, this strategy and policy has saved the decaying remains of industrial civilization by means of culture and art. Dilapidated former docks, warehouses, and revetments have been transformed into art zones and leisure facilities for citizens. By taking spatial forms that keep history alive, they enable people to again experience the value and meaning of today’s life in their recognition and recollection of a familiar landscape.

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This is the British experience that China should learn from in researching and formulating plans for the development of the cultural industry.

3

The Hu Line as a Principle of Spatial Planning in the Cultural Industry

Population and environment are important spatial factors restricting the development of cultural industries. Failure will be inevitable if we ignore these two factors or if any form of cultural industry is developed indiscriminately in any region. The Hu Line, identified by and named after the famous Chinese geographer Hu Huanyong, is a dividing line of population geography that stretches from Tengchong in Yunnan Province to Heihe (formerly known as Aihui) in Heilongjiang Province and splits China into two distinct parts in terms of population density. To the east of the Hu Line, forty-three percent of the nation’s land houses ninety-four percent of the country’s population, while only six percent of citizens share the remaining vast terrain to the west. This geographical distribution of population has formed the basis for the geographical distribution of China’s economic development, including its cultural industries. In other words, more than ninety-four percent of the country’s cultural industries are concentrated in only forty-three percent of its land to the east of the line, while no more than six percent (or even less) occupy fifty-seven percent of the land. Such a great disparity is rarely seen in the world. This pattern of population distribution contributes to the relationship between the existence and development of China’s cultural industries and their external space. The reason is quite simple: There can be no cultural products or spiritual production where there is no population, as the capacity of a society to produce cultural products and its ability to consume such products depend on the size of the population. As the space where cultural industries exist and develop, the cultural market is made up of people. The larger the population is, the larger the size of the cultural market. For a relatively small country or region where space is at a premium, the desire to expand its space is often an important impetus for outward expansion. This is as true in the military sphere as it is in culture. Here, natural conditions, especially a livable environment, are of particular importance, as population density is actually a reflection of the degree of compatibility between human beings and nature.

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In terms of population geography, the demographic structure divided by the Hu Line epitomizes the relationship between people and nature and thereby the geographical distribution of contemporary sociocultural relations in China. It is in this sense that the geographical distribution of China’s cultural industries thus formed mirrors that of the sociocultural relations of people, which are highly concentrated to the east of the line and scattered across the west. Therefore, the Hu Line becomes more than a dividing line of population geography. It is a law and principle that China must follow in dealing with the geographical distribution of cultural industries. Any plans for cultural industry development that challenge this principle are in violation of the law of geographical distribution of cultural industries. The obstinate decision to develop cultural industries and build cultural industry corridors in thinly populated regions where the ecological environment is extremely fragile and the cultural market remains in the stage of the natural economy is bound to destroy the geographical distribution of the sociocultural relations of people and thereby the relations themselves. It would be an irrational choice for the cultural industry of our country. Functional zones are a concept based on the spatial planning of China’s land use, aiming to break through the limitations of the existing system of administrative divisions in the process of regional development and ensure the reserve of land for the future sustainable development of the country. The documents issued thus far on the spatial planning for China’s regional development have come mainly from the State Council and its subordinate administrative department, the National Development and Reform Commission. What I mean by functional zones here actually include various concepts of spatial planning for regional development, such as the Yangtze River Delta, economic belts, and economic zones, which are collectively referred to as functional zones for the sake of research convenience. Economic functional zones and functional zones in terms of land use are two interrelated concepts that are distinct from each other. One of the most important assumptions in analysing the spatial order and spatial planning of cultural industry development is to establish a common goal that connects these two different concepts to provide an explanatory concept for our analysis. That goal is sustainable development. There were 17 main functional zones in 2012 that covered 19.5% of China’s land area (1.873 million square kilometers), 60.8% of its population (790 million), and 159 cities large, medium, and small. They were home to 72% of the country’s publishing houses (263), 72.5% of its film studios (29),

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85% of the nation’s top 100 printing companies (85), and 80.6% of its key cultural export enterprises in 2011–2012. In 2012, the added value of cultural industries in these seventeen main functional zones reached 1,741.7 billion yuan, accounting for 96.4% of the added value of legal entities in China’s cultural and related industries. A case can be made in which these seventeen main functional zones reflect the spatial planning of the Chinese cultural industry and its current capacity. However, none of these functional zones was divided based on cultural industry development, and it is still difficult to make a functional distinction between them in terms of the cultural industry. However, by analysing and using the concept of functional zones, we can point out the problems in the spatial planning and division of labor of China’s cultural industry and propose a new theory on the strategic layout of cultural industry development that focuses on optimizing the geographical distribution of cultural industries, modernizing the division of labor systems, and developing national functional zones for the cultural industry. China is a vast country with rich and diverse cultural resources, different levels of civilization in different regions, and various environments and climates. These have all contributed to the formation of the Hu Line that defines the geographical distribution of population and regional economic development in the southeastern and northwestern parts of the country, along with the city clusters and city belts based on that. This map lies at the heart of the national administrative zoning of China. It is no coincidence that the nation’s seventeen economic functional zones were all based to the east of the line. They were designated according to the geographical distribution of our population. Therefore, the Hu Line is a principle to be observed in planning the geographical distribution of our cultural industries. A society’s total scale of economic and cultural development varies from stage to stage due to the geographical distribution of population and cities. China’s cultural industries are almost all concentrated to the east of the line, while a small population and environmental constraints, especially harsh climates, have rendered those in the western vastness almost negligible in terms of their proportion in the national total. Productive forces include material resources provided by the natural environment, in which environmental livability is of special importance. The compatibility between people and nature in a certain region can be judged by the density of its population. People are the most fundamental cultural productive force. The cultural industry is built by people through creative cultural production. Without people, there

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would be no cultural industry and, of course, no cultural productive force. The geographical distribution, quantity, and quality of the population are decisive factors for the geographical distribution, quantity, and quality of cultural industries as a cultural productive force. An appropriate population size is the strategic foundation of cultural production, cultural consumption, and the cultural market, as it creates a system of ecological energy that is necessary for the development of cultural industries. A region without a population may not be able to build a complete cultural industry system even if it boasts unique advantages in cultural resources. A region with a large population and limited cultural resources, on the other hand, is often beset by unsustainability as a result of uncontrolled cultural industry development. Such worrying cases have been made public every now and then. Perhaps that’s why the tiny Himalayan nation of Bhutan has imposed restrictions on the number of tourists allowed in and is therefore rated the happiest country in the world. In this sense, making plans to develop the Xizangan, Qiang, and Yi Cultural Industry Corridor (the Notice of the Ministry of Culture and the Ministry of Finance on Issuing the “General Plan for the Xizangan, Qiang, and Yi Cultural Industry Corridor”) (2014) is a decision concerning the spatial planning of China’s cultural industries that needs to be re-evaluated. Similarly, the Silk Road Economic Belt is a scientific concept rooted in history and in line with national land-use planning, whereas further scientific verification is needed for the Silk Road Cultural Industry Belt. It would be more practical to call it a “Silk Road Cultural Tourism Belt.” The irreplaceable cultural tourism resources are cultural products unique to the Silk Road, and it is such products that satisfy the cultural consumption demand of modern people. Planning and building a cultural industry functional zone with global visibility and a distinct main function based on this fact will not only be consistent with the planning of functional zones in China but also give prominence to the main function of this region in terms of cultural industry development. If we can build and develop this functional zone, which lies just to the west of the Hu Line, a good effect of interaction between the east and the west and market complementarity will be created, which may even boost the golden cultural tourism along the entire Silk Road Economic Belt. This is a vast area that includes the Ningxia Hui Autonomous Region and extends into Central and West Asia. It will see new mutual learning and exchanges between different regions and generations that will bring about immeasurable cultural and civilizational benefits to the development of China’s cultural industry as a whole.

CHAPTER 8

Key Factors in the Sustainable Development of China’s Cultural Industry

The strategy for developing China’s cultural industry is entering a new era characterized by consciousness and proactiveness. Having experienced a transition from strategic ambiguity to strategic clarity, the cultural industry is taking strategic initiative after a period of passivity in response to challenges. Boosting the development of our cultural industry in a more conscious and proactive way has become an important part of the cultural development and prosperity of our country and a major feature of this current period. Strategic consciousness is based on a new understanding of the law of cultural development and a new insight into its form. Big data, whether as a tool of social governance, a means of scientific research, or strategic thinking, was introduced into China in 2012 and became one key factor in the strategic decision-making process of the country.

© Social Sciences Academic Press 2022 H. Hu, The Development of the Cultural Industry in China, China Connections, https://doi.org/10.1007/978-981-19-3355-4_8

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1 The Measure of Rational Development in the Cultural Industry 1. The “2+3+5” framework: a conceptual framework for theoretical analysis The “2+3+5” framework, proposed by me in a report titled the China Cultural Industries Development Index (CCIDI)1 published in 2012, is a theoretical framework for analyzing the development index of China’s cultural industries. As the most important achievement of this report, this theoretical framework and evaluation model of “2+3+5”, namely, two kinds of indicators, three echelons, and five types, was put forward for the first time. The cultural industry is a system of the production of social culture and of the expression of a social spiritual order. It constructs the landscape of political civilization of the present age with the economy as its conveyer and promotes the all-around development of people and the overall progress of civilization through the interaction of people, society, nature, and the state. Therefore, in terms of the system and environment in which it exists and develops, the cultural industry is subject to two factors while also affecting them, that is, its external and internal relations. This is why we have suggested two basic types of indicators, namely, representational and connotative indicators, and based on them created a dual index system for analyzing the development index of China’s cultural industries. National conditions and traditions may vary greatly. However, whatever circumstances and conditions there are, the external relations of the cultural industry are always constituted by its role in the development of the national economy and the social impact of its development. Certain behavior and choices of the path are sometimes generated under the long-term influence of such an environment as the cultural industry develops behavior patterns and habits that will then affect and change its genetic structure. Hence, we have indicators such as GDP and employment rates. Evidently, the evaluation of the cultural industry development index is incomplete without such representational indicators. However,

1 Hu Huilin and Wang Jin, China Cultural Industries Development Index (CCIDI) (Shanghai: Shanghai People’s Publishing House, 2012).

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representation alone is not enough. What truly contribute to the essential attributes and main functions of the cultural industry and ultimately determine its external relations are the internal relations of the industry itself, namely, its connotative indicators. Every form of industry has its external relations with the various aspects of its environment. What distinguishes and influences the external relations of the cultural industry, however, is its production and provision of content, namely, symbolic meaning and value. While the main function of other industries is to satisfy one’s material needs, the cultural industry is the only industry that exists to fulfill spiritual needs. This is the distinctive nature of the cultural industry. This is also why connotative indicators are valuable. Without them, there would be no development index of cultural industries. Such is our understanding of the cultural industry and its index system with representational and connotative indicators and how the “2” in the “2+3+5” framework came into being. China is in the primary stage of socialist development and will remain so for a long time to come. This is the fundamental point of departure for understanding and assessing the national conditions of the country, for all its theories and policies today, and for us to evaluate and judge issues concerning its development. However, there are wide disparities between the eastern, central, and western regions of the country in terms of development. The primary stage of socialism in China is one of unbalanced development, which can be divided into several different stages, namely, that of the eastern coastal areas, of the central region, and of the western region. To understand and diagnose issues concerning the development of China, we must proceed from this basic condition of unbalanced regional development so that our theories and policies will be rooted in reality. This is true of politics and economy as it is of society and culture. This essentially leads us to the question of how to set standards and what standards should be set in understanding China’s development. Based on this, the cultural industries of China can be roughly categorized into the following three types: traditional cultural industries based on agricultural civilization with manual production as the main means of production, modern cultural industries based on industrial civilization and large-scale machine reproduction, and emerging (postmodern) cultural industries based on information civilization with the Internet and digital technology as their principal mode of production. The vast western region of China houses most of its traditional cultural industries, while the second type of industry is found mostly in the central and

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eastern regions, and the third type is clustered in the eastern region of the country, which, on the whole, is consistent with the fact that the level of China’s social productivity decreases from east to west. This has been clearly described and demonstrated in the report of the China Cultural Industries Development Indices 2013. As a result, the development of our cultural industries has encountered complexity not found in other countries, as well as tensions and conflicts caused by such complexity. Social development in our country has to simultaneously transition from the first stage of civilization (agricultural civilization) to the second stage (industrial civilization) and from the second stage to the third stage (information and ecological civilization, or postindustrial civilization), otherwise known as the processes of modernization and postmodernization. Meanwhile, we should carry forward the fine traditions of Chinese civilization and achieve national rejuvenation, as illustrated below: Traditional agricultural civilization — Modern industrial civilization — Information and ecological civilization (Spatial sequence and order) Past — Present — Future (Time sequence and order) Naturalism — Socialism — Humanism (Sequence and order of values expression) These are the threefold relations that China now faces and the threefold order determined by such relations between various forms of civilization and stages of development. Historically, such relations and order have restricted the actual relations in the development of the Chinese cultural industry, which themselves are profoundly reflected in the current situation of the industry and embodied in its representational and connotative indicators. This is the theoretical origin of the concept of the three echelons. The reality is more complicated than that. For example, the cultural industry forms in the first echelon include contents of agricultural civilization, while those in the third echelon contain elements of postindustrial civilization, such as the introduction and application of the achievements of information and ecological civilization. However, this does not change the nature of civilization at each stage and its basic position in the order of development. The division of our cultural industries into three echelons is based on a basic analysis and judgment of China’s national cultural conditions and the geographical distribution of cultural resources, which

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will have a long-term impact on the pattern and trend of cultural industry development. The overall order will remain roughly the same except in certain areas where the sequence might be adjusted. This is known as the “3” in the so-called 2+3+5 framework. As the specific forms of the three echelons, the five types are based similarly on the multilevel and multiphase development of China’s cultural industry in its primary stage. They describe in specific terms the time sequence of its overall development in a spatial sense. In thinking about the cultural economics of space and time, they reveal in a visual way the microstructure of cultural industry development in the sense of space– time convergence. Meanwhile, they provide a timetable and road map of competition for different regions in their respective echelons so that you know where you are, how close you are to the competitors ahead, what you are competing for, and when you can reach the milestones in your long-term goals. We have essentially created a model for selecting priority goals and established progressive conditions for the various priority goals. The existing conditions are given and yet changing, but they are all based on the transition of diverse types of development in different regions. The five types, therefore, summarize the subjective and objective conditions for cultural industry development in different regions with an implied message: Any region must ascend to a higher level of civilization if it wishes to be included in the top echelon of cultural industry development. Breaking through the pattern of the three echelons is difficult, but they can switch to a different type of development. Here, every microsubject plays a strategic role in changing the status quo. This is what “5” means in the 2+3+5 framework. 2. The outlook on the development and theory of knowledge in the cultural industry: finding a value standard for measuring development Adopting an appropriate outlook on the development and theory of knowledge is one of the most important theoretical and policy issues facing the development of China’s cultural industry at present. It lies at the root of all problems encountered in the cultural industry. Apart from looking at the development of cultural industries from the right perspective, this issue involves finding a value standard to evaluate and measure such development. A different theory of knowledge will inevitably give

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rise to a different outlook. What kind of an outlook on cultural industry development is needed today depends on our theory of knowledge, that is, how we perceive and understand the cultural industry. There are roughly two ways of perceiving the cultural industry in Chinese academic circles. One group of scholars views the cultural industry as part of the economy, looking at its development from the perspective of economic development and applying a general model of economic development with GDP as the matric. The other places cultural industries within the field of culture before considering them a component of the economy; this theory advocates that cultural industry development follows the approach of cultural development and be regarded as an important means of cultural progress, with its value measured by the accumulation and growth of cultural resources. The former is a project-oriented outlook on development, while the latter focuses on values. Those who believe in project-oriented development tend to imitate the model of economic development zones and high-tech development zones, which are characterized by the attraction of businesses and investment, resulting in the much-criticized homogenization of cultural industrial parks. The value-oriented development view advocates the development of cultural industries through the activation of endogenous innovation, with independent innovation as its main feature. What we are not satisfied with at this stage is insufficient innovation. The former generates GDP through cultural real estate and produces a marked effect within a short period of time, which is the exact opposite of the latter. In a performance-oriented environment, economic benefits are the main measure of cultural industry development, while cultural indicators become secondary or even irrelevant. This is due to the lack of a sound index system. Cultural industry development is driven by projects, the vehicle for values. Without values, however, a project loses its soul. A combination of both of them, rather than a one-sided emphasis on projects, should be advocated by all. Only when values play a key and guiding role is it possible for China’s cultural industry to develop its core competence. For us, televisions may be an important means of cultural communication, but without values, they can be reduced to a tool for the spread of other cultures. Worst of all, we might lose our own cultural identity when exposed to such diverse cultures. The cultural industry depends partly on creative thinking in society and partly on the existence and spirit of human beings. Humanism is the basis

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for understanding life and an important measure of how we treat it. The cultural industry is an extension of people’s spiritual life, a representation of our understanding of the world, and the embodiment of our world of values. We think about what kind of cultural industry should be developed or form a key component of our spiritual life and social existence not for the pursuit of GDP but to reshape our inner world, showcase our psychological landscape and values, and achieve the sustainable development of culture. Without culture as a value standard, the cultural industry would be devoid of meaning, value, and rationality. Culture exerts a great influence on economic development through values and beliefs and improves social productivity through the cultural transformation of human capital, thus achieving an increase in social wealth. The cultural industry will never be a key player in the creation of social wealth if its contribution is measured solely by the direct wealth at current prices created by the production of cultural products, even if its added value has grown to account for six percent of our GDP. Primary, secondary, and other tertiary industries remain the pillar industries of the national economy and are responsible for ninety-four percent of the entire economy. Therefore, it is necessary to get rid of our tunnel vision and stop seeing the cultural industry as a direct creator of wealth. Instead, a new perspective should be established based on the cultivation of cultural values and cultural creativity in people and society as a whole. The cultural industry drives the growth of our national wealth by improving the cultural productivity and creativity of people. 3. The advance of human civilization and social progress: a measure of rational development in the cultural industry Is it rational or irrational? This is the primary question that we should be asking when evaluating the nature of how the cultural industry is developed. Rational development is manifested mainly in innovative content, sustainability, coordinated thinking, resource accumulation, and ethics of justice and harmony. Everything is centered around the construction and development of culture and the accumulation and growth of cultural resources and oriented toward the advance of human civilization and social progress. It is therefore necessary to establish standards for evaluating the development of cultural industries and an index system that guides such development.

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China’s system of cultural industry development is vastly different from that of Western developed countries. The establishment of an index system that evaluates and guides such development was put forward at a time of new historical development after ten years of rapid growth. It was a time when China was faced with such major strategic choices as what and whom we should rely on to develop the cultural industry and what kinds of cultural industry should be developed. The index system, therefore, should include material-oriented indicators (GDP), people-oriented indicators (the all-round development of people), and indicators that evaluate our social system (progress of human civilization). The “2+3+5” analytical model proposed by us is essentially a conceptual theoretical framework. The increasingly systematic transformation of economic and social development is a major trend in China’s current development. A demographic dividend that drives the development of cultural industries has yet to emerge, the dividends of cultural restructuring are still being released, and our efforts of internationalization have yet to pay dividends. We have not yet attained the level of technologies, fruits of innovation, or optimization of structures (including the internal industrial structure and the external institutional structure) needed to ensure the quality of cultural industry development, which is unfortunately the greatest vulnerability of our cultural industry. In the meantime, we have encountered strategic changes in the global economy and in the transformation and upgrading of China’s development. In particular, strategic economic restructuring has been taken a step further, and the transformation of economic development has further accelerated, with various anti-driving mechanisms gathering to generate explosive energy. Under these circumstances, we need to establish a scientific index system both in theory and in practice and pursue growth that is accumulative and transformable to scientifically promote the ecological and sustainable development of cultural industries. A basic system of values should be created that covers the mode of development (how to develop), objectives and tasks (for whom we develop), the entities responsible for development (on whom to rely for development), and the distribution of the fruits of development (who deserve the fruits). This involves both the external and internal relations of the development of cultural industries. As a result, representational and connotative indicators have become two of the most important groups of indicators used to evaluate cultural industry development, which makes possible the theory of a dual development index. Based on this theory, the

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CCIDI studied and evaluated the development index of China’s cultural industries. Multiple index systems should be used to measure the development of China’s cultural industries. However, rather than blindly copying some existing theoretical model that is not suited to the cultural industry, all index systems should be based on the specific conditions of the cultural industry, tailored to its actual needs, and used to guide its practical development. Otherwise, as a Chinese idiom suggests, we would be “cutting our feet to fit the shoes (xue zu shi lü)”, losing sight of the peculiarities of our cultural industry. In fact, as far as the classification of cultural industries is concerned, the establishment of classifications other than those of the five types that can better reflect the reality of cultural industry development in different regions of China is also a proposition worthy of in-depth study. Ensuring the integrity and scientific nature of statistics is a universal challenge. To date, no country has dared to claim that its data are entirely scientific without any estimation or exaggeration. However, this has not prevented the United Nations and the international community from establishing their own evaluation and indicator systems. To conclude, that an index system for evaluating the cultural industry is premature in China based merely on the unavoidable flaws in its statistics would be like giving up eating for fear of choking (yin ye fei shi), a metaphorical expression meaning to refrain from doing something necessary for fear of a slight risk. Such an index system should take full account of the regional imbalance in the development of China’s cultural industries so that any region that adopts the system is likely to be among the best in the country on a given indicator rather than consistently lagging behind. The question is not whether the cultural industry data released by China at the present stage are one hundred percent scientific and transparent but how we can evaluate in a fair and equitable manner under the existing conditions. It is unfair to the less developed regions when different stages and levels of development are measured with a unitary standard. However, such unfairness will always exist. The question is how to minimize it. The top-level design of the reconfiguration of the interest structure in the cultural industry and of the distribution of dividends from reform and development is a particularly daunting task for China in the throes of major transitions. The country must overcome the imbalance of

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distribution at the micro level (distribution of cultural rights and interests between individual citizens), the medium level (allocation of cultural resources between urban and rural areas, between different regions and industries), and the macro level (distribution of resources between stateowned and nongovernment-run cultural industries), which is the most immediate issue of distribution closely related to its current transformation. It is also the most important problem that China needs to address in this unprecedented era of transitions. 4. Cultural industry consciousness: to establish a socialcultural system and an order of socialcultural values In many ways, China’s cultural industry was pushed into the current wave of reform of the socialist market system before it was ready and faced with the strategic choice of major entities responsible for developing the cultural industry before its own maturity. Furthermore, it was caught in Chinese economic liberalism and mercantilism without a sound marketization system or mechanism in place. Therefore, our cultural industry today is faced with such profound challenges as shifting from a marketoriented approach to one guided by culture and values, to constantly enhance its value to human civilization while further deepening cultural restructuring, and to divert its development onto a path conducive to the development of civilization while changing its mode of development. The development of the cultural industry calls for a healthy cultural capital market, which is an important mark of the transition from stateowned to nongovernment-run cultural industries. The key to developing the cultural capital market is to provide strong financial support for the strategic production of cultural content, instead of pursing only the handsome book profits of listed cultural enterprises. If the cultural capital market cannot or serves not to provide support for the production of cultural content but merely to gain profits through the capital market, culture would be fundamentally the same as any other investment goods. We should seek to overcome difficulties in financing for our cultural industry with the help of the financing mechanism and financing capacity of the capital market. The capital market is only a mechanism, a financing platform, and a cultural financial means rather than an end. The GDP of the cultural industry is not generated through the market operation of cultural capital. Under no circumstances will the capital market produce

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cultural soft power, let alone sharpen the competitive edge of a country’s cultural industry. The competitive edge of a country’s cultural industry depends on its capacity for producing cultural content, its share of cultural products in the cultural market, and the resulting cultural capital. This is fundamentally about the value orientation that makes the cultural industry what it is. In developing China’s cultural industry, we should step away from the misconception of investment-driven development and instead rely on our creativity. Creating a greater demand for cultural consumption is the main way out of the investment and financing predicament of the cultural industry. As a country, we have weakened our ideological initiative at great costs, but it has not won us the world market. We are still in the stage of primitive accumulation in the cultural capital market and have not yet developed cultural industry consciousness. A notable feature of cultural industry consciousness is that culture is driven by creativity instead of investment and by originality and standards rather than capital. Capital seeks nothing but profit and will throw away any value for the pursuit of it. Value can also be abducted and enslaved by capital. However, we do need capital and pursue profit in developing the cultural industry. It goes against the principles of the socialist market economy to emphasize only inputs and not outputs. However, a country’s cultural soft power and cultural competitive edge cannot be built on profit alone. Even Hollywood, the most mercenary cultural industry machine in the world, and the Oscars are not based entirely on profit. The American cultural influence built up by Hollywood is an exact embodiment of its most fundamental goal, which is to maximize its interests in terms of economic profit and cultural value. Cultural and creative industrial parks are supposed to be a good model of urban governance and urban cultural development, as they epitomize the postmodern transformation of urban industrial civilization and preserve the urban cultural forms and features as well as people’s memories of the progress of urban civilization and modernization. They are a highly creative reimagination of urban life. The sudden emergence of cultural real estate, however, is a disguised replacement of the concept of cultural and creative industrial parks and an insult to the originality and ingenuity embodied by them. Consequently, excessive attention has been given to calculating likely changes in real estate policies and land revenue concerning cultural real estate. What was an effort to remedy the defects

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of industrial civilization has turned into an attempt to expand land and change the nature of land use. Naturally, enclosing pieces of land in the name of building cultural and creative industrial parks will be questioned and criticized by the public. The lack of rationality in the cultural industry has directly resulted in the irrational construction and development of cultural industrial parks. China’s cultural industry is in need of strategic review. Its development since 1999 has been a “forced march”, leaving us no time to sort out the mess caused in the process. We have proposed the index system for evaluating cultural industry development in the country as one such strategic review. It is a conceptual, rather than formal, framework and model of analysis aimed at providing a reference for strategically reviewing the development of cultural industries. In doing so, we can ensure that conditions will be ripe for the transformation and upgrading of China’s cultural industry in the era of big data and with the arrival of the third industrial revolution. China’s cultural industry has entered a new stage of development characterized by a newly developed cultural consciousness and cultural industry consciousness. The core, or the most essential, aspect of cultural industry consciousness is the establishment of a value system. In other words, we should take the initiative to build a socialcultural system and an order of socialcultural values. Therefore, it is incumbent upon us, as researchers of the development index of China’s cultural industries, to develop an index system that also serves as a guide.

2

A Greater Voice in the Realm of Data

1. We live in an age of standards As Karl Marx wrote in the Economic and Philosophic Manuscripts of 1844, “[a]n animal forms only in accordance with the standard and the need of the species to which it belongs, while man knows how to produce in accordance with the standard of every species.”2 This is the most essential difference between humans and animals and a sign that human beings are conscious beings. 2 Karl Marx, Economic and Philosophic Manuscripts of 1844, trans. Martin Milligan (March 2021): 32, https://www.marxists.org/archive/marx/works/download/pdf/Eco nomic-Philosophic-Manuscripts-1844.pdf.

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Here, the establishment, understanding, and application of standards is an important criterion that distinguishes humans from animals and a measure of the development of social civilization. To set up standards is to establish criteria and norms with perfection and the sustainable development of human society as the ultimate goal. Therefore, standards serve as levers and guidelines in regulating social progress and development. Standards are not set in stone: Different societies have different standards for measuring things; even the same thing can be measured by different standards at its various stages of development. However, without standards, social development would be thrown into a disordered state. The same applies to the development of the cultural industry. Today, we are going through a period of profound civilizational transformation and drastic cultural changes. The pursuit of a great boom in the cultural industry is becoming an important symbol of the rapid development and innovative transformation of our society. However, the purpose of developing cultural industries is not to seek economic benefits or an increase in wealth. We rely on our superiority in cultural resources, eager to translate it into an advantage in developing cultural industries and to reverse the traditional pattern of economic growth and development that depletes resources and pollutes the environment. There is nothing wrong with that. However, the way in which cultural industries develop and grow is not without its problems. It should not come at the cost of cultural resources and the cultural environment and instead should be geared toward the accumulation of cultural resources and a better cultural environment. This requires the establishment of a standard. We should develop an index system for evaluating cultural industry development combining representational and connotative indicators with the accumulation, rather than consumption, of cultural resources as a standard and a development index of China’s cultural industries based on this system. The international community has established many such indices to regulate the development of human society and promote good governance in national governance, which is becoming a major global trend. Creating a development index of cultural industries is conducive to good governance in China’s cultural industry development and cultural development. This will then provide a decision-making basis for the state in formulating cultural industry development plans and cultural development strategies and lay the foundation for our cultural industry to further participate in international competition, obtain a strategic leading position and seek a greater voice. Indices are essentially standards, and whoever controls the

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standards has the strategic initiative. One of the most important strategies for cultural industry development in our country is to compile a development index to guide the choice of a strategic goal, path, and policy, thereby improving cultural industry planning. 2. Our lives are surrounded by data and indicators Everything is measured by data and assessed on the basis of indicators, taking away a lot of our freedom. Although they are also used to measure the degree of human freedom, data and indicators have become tools for the strategic competition between different countries and groups of countries. The vast majority of data and indicators in the world today are controlled by Euro-American powers and groups of countries. They release all kinds of statistics and indicators for rating, such as exchange rate, carbon emission, and credit rating, which have become major strategic tools for countries in competing for space and resources and in seeking to control and destroy another country. Even indicators such as crop yield per unit area are used by the United States Department of Agriculture (USDA) to control world food prices. Data and indicators are no longer general statistical tools in the world today. To a certain extent, they play a decisive role in the survival of certain industries in a country or region. Data concern national security. It is a common practice in the international community to implement a state confidentiality system for strategic data concerning national security. Data confidentiality is a matter of national security, as is scientific and complete data collection and release. Without scientific and detailed statistics, a country will have no control over the price of products. The reason why the United States has a strong voice in the international agricultural market lies not only in that it is the world’s leading producer and exporter of agricultural products but also in the fact that it has established a set of data systems that affect international food prices. Its monthly supply and demand report of agricultural products, in particular, is a primary market indicator. As a country that relies largely on agriculture, China lacks the pricing power commensurate with its position in the world food market. This is as true economically as it is culturally. We have not yet established a scientific and complete set of statistical indicator systems, data systems, evaluation indicator systems, and data release systems for the cultural industry, resulting in a weak voice

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in the realm of data. This is a reflection of our aimlessness in cultural industry development and a cause of the seriously misguided and unsafe situation of the cultural industry in adjusting industrial structure and selecting development strategies. It is not conducive to the adjustment and improvement of our development strategies. Missing statistics, inconsistent statistical calibers, an imperfect statistical system, and one-sided evaluation indicators of political performance have led to a wild distortion of cultural industry data. Such distorted data, when used as a basis for decision-making on development strategies, have brought about security issues in the cultural industry of our country. The lack of statistical data on the cultural industry was the biggest obstacle we encountered in researching this report. It leads me to wonder: Can a place with no or incomplete statistical data on cultural industries have a cultural competitive edge? And if we take such an intense interest in the position of our cultural industry in the entire country, why don’t we pay attention to the timely collection, analysis, and release of data? The absence of statistics means you have little or no say in the realm of data. In addition, where your regional cultural industry is ranked in the country is determined by how much statistics you have. 3. National cultural governance calls for the modernization of standards The goal to develop the cultural industry was proposed at a time when China’s social development entered a period of radical reform. Meanwhile, the country was striving to overcome structural tensions and institutional obstacles encountered in the process of strategic economic restructuring. It was put forward as China joined the WTO to boost reform through opening-up and as the socialist cause was confronted by the collective collapse of the Soviet Union and the camp of socialist states in Eastern Europe. In other words, the national strategic decision to develop the cultural industry was made to meet a series of national strategic needs and address national crises. In this sense, the development of the cultural industry is of great significance in managing national crises. We seek to manage national crises by developing the cultural industry, which means that the cultural industry plays an important role in national cultural governance. The establishment of a development

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index for China’s cultural industries naturally becomes an integral part of national cultural governance. There has been a process of policy changes in China since the 1980s. As a country that had never mentioned the cultural industry, China began to recognize the importance of this industry and even devoted major efforts to developing it and accelerating its development. This is more than a general evolution of policy and the country’s attitude toward and understanding of the cultural industry; it is also a profound transformation of the country’s view on governance and cultural governance. China had made no mention of the cultural industry for a long time in the past for the sake of national ideological security. Then, in the 1980s, the development of cultural industries was proposed for the same purpose. The nature of the issue, however, is no longer the same: On the one hand, the environment and form of national ideological security have undergone profound changes. The integration of global markets caused by economic globalization has altered the landscape of global production and the circulation of not only physical commodities but also cultural commodities. The integration of global markets caused by economic globalization has altered the landscape of global production and the circulation of not only physical commodities but also cultural commodities. Modern science and technology, in particular, are ever more deeply involved in the revolution and modernization of the means of cultural production and communication, making it increasingly impossible for the original closed production, circulation, and consumption of cultural commodities to continue. The transformation of the means of cultural production and communication has become an inevitable approach, without which national ideological security cannot be effectively safeguarded. It is for this reason that cultural globalization and a global revolution in cultural governance are taking place with the cultural industry evolving into an international cultural strategy and a national strategy of cultural security. On the other hand, while creating enormous wealth for human society, fast-moving economic globalization has also led to a global economic crisis by contributing to resource depletion and continuous environmental deterioration. Proposing the strategy of sustainable development, therefore, has universal value and highlights the concern of all of human society. Changing how the economy develops and grows naturally becomes another important task in economic globalization. One of the common goals of human society is now to seek new ways for our civilization to evolve and develop a new lifestyle.

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As considered by many, the best way to pursue this goal is through the development of the cultural industry. In terms of social development and global governance, the cultural industry has gone beyond the social critical theory of the “culture industry” proposed by the Frankfurt School, which calls attention to the industrialization and commercialization of mass culture and has developed into a means of governance for solving economic and social development problems. The Creative Industries Policy formulated by the British government, the Renaissance City Project of Singapore, the strategy of culture-oriented national development proposed by Japan and Korea, and the EU’s cultural strategy have all given the cultural industry its instrumental rationality as a tool of social development in addition to its value rationality as a concept of social criticism. Under the condition that ideological security is still defined by class struggle, a new global consciousness has given rise to a new ideology and new ideological security. It is in this sense that the cultural industry becomes the most important form of this new ideological security, which, in a broader sense, is national cultural governance. Therefore, China’s cultural industry development index should be an important component of national cultural governance and the strategy for cultural industry development. 4. A new subject of academic research on the cultural industry The development index of China’s cultural industries is an important subject of academic research on the cultural industry. However, the research work in this area is extremely difficult, from the collection of data to the choice of indicators and to the establishment of an analytical framework. As China Culture Daily put it in an editor’s note of its in-depth analysis of the Shanghai Reader of China Cultural Industries Development Index (CCIDI): “The establishment and release of China’s cultural industry development index is only the beginning of a thorough study of the current situation of China’s cultural industry development. There are still many areas for improvement and further thinking, whether it is the theory supporting the index, the establishment of the index system, or the evaluation process of the index system”. In particular, the scientific research on the concept of China’s cultural industry development index is, strictly speaking, only a proposition. Many intensive studies remain to be done by Chinese academia before the goal can be fully achieved.

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As the world steps into the era of big data, a major cultural power cannot be built without the support of big data, which is a form of discourse that affects future strategic development. Those that control big data will be able to make and change the rules for the future. Our goal is to strive for a greater voice for China’s cultural industry in the realm of data by working with Chinese academia and the statistics bureau.

3

Data Mining and Its Strategic Application

1. The nature of the data Data are a product of people’s spatial activities. There would be no data without human activity. Therefore, data are only meaningful to people and human society. It is a strategic element that plays a decisive role in the development of human society formed through the evolution of the relationship between people and nature and between people and society. However, for data and the understanding and application of data, human society would end up going nowhere. For quite a long time in history, however, our understanding and application of data and the emphasis given to it varied according to different historical periods. For instance, human agricultural practices are instinctive applications of data. Data mining and its strategic application by people through the understanding of the farming season and decision-making based on it have affected the order, relations, and production planning in agricultural development throughout the age of agricultural civilization. Such order, relations, and production planning are manifested in the space and proportion taken up by different crops (in consideration of soil conditions, bioclimatic conditions, and the like) and the production relations in the form of agricultural tools generated therefrom. Furthermore, the system of agricultural division of labor and the production relations in agricultural society are thus created. In contrast, the military activities of human society are conscious applications of data. It is an iron law of war that one shall never fight unprepared. In other words, it is necessary to make proper preparations (army provisions, for example) in advance and to compare and analyze the strengths of both sides, including external factors such as climatic, geographical, and human conditions. All of these are based on sufficient and complete data analysis. Without collecting and analyzing data on the various elements of the combat capabilities of both

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sides, you would be fighting a losing battle. Behind every winning battle lies a deep understanding of data, followed by the scientific application of it in making strategic decisions. Since the birth of data, data mining and its strategic application have become the key to scientifically harnessing rules of data to win a battle. Data, however, are also abstract, a quantitative representation of the existence of things. Data itself has no relationship. The relationships among data are the result of human discovery, manifested in the spatial existence of data. Differences in data reflect the different quantities of the existence of objective things, and it is such different quantities that reveal the qualitative differences between the existence of different things, as well as the different ways of evolution and competition of things constituted by such differences. However, such spatial relations among data are not intuitively visible without the help of certain means of expression. So-called data visualization is a way to show the size of data by means of graphs, images, maps, etc., and interpret the relationships among and trends in the data to better understand and utilize the results of the data analysis.3 Before the invention of writing, for example, our forefathers used to keep records by tying knots, whose different structures convey different meanings. It was the earliest way to coordinate people’s activities and govern primitive communes, with the help of knots, an intuitive shape. (The Chinese knot of today may have been inspired by this recording medium of ancient times.) Based on this understanding of the importance of data and data visualization, we carried out our research work. Market analysis is important and necessary for the future development of China’s cultural industry. However, it is only the initial stage of data mining and its strategic application in the age of data, built on the perception of number in industrial civilization. Although statistical analysis of data is used in market analysis, it seldom digs deep into the value of data, let alone applies it as a strategic resource or strategic element. The so-called strategic elements refer to some necessary conditions for strategic decision-making and strategic applications, which means they are indispensable. This is exactly the value of data, which cannot be found unless mined. As defined by Tu Zilin in The Big Data Revolution, “data mining refers to the automatic analysis of large amounts of 3 Tu Zilin, The Big Data Revolution (Nanning: Guangxi Normal University Press, 2012), 100.

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data through specific computer algorithms, to reveal the hidden relationships, patterns, and trends among the data and provide new knowledge for decision makers”.4 It is to expand the scope of data analysis from the known to the unknown, from the past to the future. What does the future look like? Everyone is looking for the answer to this question. The perception and understanding of the future vary from individual to individual, but such a perception and understanding is of great importance to social governance and social development, especially when the entire human civilization is going through a fundamental strategic transformation. There are no clear answers to such questions as how and when to transform, in what direction, to what extent, and which areas to pivot into to achieve sustainable development. In this context, the analysis and mining of big data has become an indispensable means without which one cannot anticipate the future, let alone obtain space and opportunities for further strategic development by reallocating resources and rebuilding the spatial relations among them. Today, the development of China’s cultural industry is facing a window period of rebuilding such spatial relations. It seems, however, that the collective unconscious in China’s academic circles focusing on cultural industry development is not yet prepared for such data thinking. Researchers rely mainly on market analysis, the primary stage of data mining and its strategic application, which seems out of place in the era of big data. Many of them follow an approach of rigorous textual study in examining the development strategies and development planning of the cultural industry, unlike trend-setting research in the early 2000s. It is arguably forward-looking research like that—albeit without the support of big data—that provides the basis for strategic decisions about the development of China’s cultural industry. China has introduced policies encouraging the integration of culture and technology, but academic research on this has not come close to meeting the strategic needs of the country. What is the integration of culture and technology? It is to apply big data to the decision-making process of cultural industry development and discover the next generation of cultural industries through data mining, thereby advancing intergenerational creation and reshaping spatial relations of the cultural industry. Ultimately, the strategic allocation of resources in this field will better reflect our desire to explore the unknown and expand into the future.

4 Tu, Big Data Revolution, 98.

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The Belt and Road Initiative is a grand strategy for China’s development today and in the future. It is an unprecedented revolution of economic geography and geographical rediscovery in the country since the Han, Tang, and Ming dynasties that will reshape the economic and geographical relations of China, countries along the Belt and Road (B&R) routes, and the whole world. However, is it possible to rediscover the cultural industry in such a revolution of economic geography? The cultural industry is first and foremost a form of culture rather than of economy. Different cultures are compatible and exclusive at the same time. The economies along the B&R routes are complementary with one another, but cultural complementarity is much more complex. The B&R spans different civilizations across the continents of Europe and Asia, covering over sixty countries and regions with a population of 4.4 billion, divided into low-, middle-, and high-income groups. Even countries of the same cultural root have different cultural traits. The situation in the cultural industry is particularly complicated. This is a type of spatial relationship in the cultural industry. There are multiple civilizations intertwined in this relationship, involving diverse histories of cultural industry development and views and policies on such development, and entailing different cultural security considerations in terms of ideology and religious belief. The cultural landscape formed by the B&R today is far more complex than that of the Silk Road in history, which was not only a trade route but also a road of mutual learning and integration between civilizations and cultures. Therefore, the Silk Road Cultural Industry Belt and the “B&R Cultural Industry Strategy” should be the creative enrichment and improvement, rather than a simple imitation or conceptual retelling, of national strategies and policies. As a vehicle for modern cultural expression, the development of the cultural industry varies with civilizations, cultures, and national conditions. Economic reciprocity is relatively easy, but connectivity in the cultural industry involves the geographical revolution in the spatial relations of the cultural industry, geopolitical culture and politics, and changes in the world map of cultural industries. This is an issue that calls for meticulous study. In addition, we basically know nothing or very little about the data on this issue. Therefore, the collection, analysis, and mining of data that helps lay a strategic foundation is of particular importance. Data are the numerical representation and expression of the temporal and spatial relationships in the development of things. The spatial relations of the cultural industry form a complex network system composed

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of external spatial relations (proportion of the land designated for developing cultural industries), internal spatial relations (proportion of different cultural industries within the overall industrial structure), and a combination of the two (proportion of different cultural industries under different conditions of land allocation). Any slight change in any point of this network system will lead to a greater change in the whole system and thereby the reorganization of the spatial relations of the cultural industry. Since the spatial relations of people’s social life have essentially been built in the world of the Internet, the composition of different cultural industries in the Internet space and the spatial relations of the cultural industry of the Internet have formed an interactive relationship with the spatial relations of the cultural industry in the traditional sense; moreover, real and virtual cultural industries based on big data are moving toward a new form of spatial integration. As a form of cultural order that concerns cultural rights and power, the spatial relations of China’s cultural industry are heading for a major turning point of reconstruction. Our existing research on the development index of China’s cultural industry is a preliminary exploration that only skims the surface of such spatial relations. As the era of great transition and reconstruction draws near, much work remains to be done in completing the historical mission of seeking the next generation of cultural industries. The future spatial relations of China’s cultural industry depend on the next generation of cultural industries. The answer is different for everyone. Today’s spatial relations are a historical result of cultural industry development and the allocation of cultural policy resources, rather than the product of market analysis or data mining. This is the historical nature of the cultural industry. We have conducted research by visualizing data on the development of China’s cultural industry from 2006 to 2012,5 aiming to reveal problems with its data mining while presenting its history. We hope to provide a visible image for the strategic application of data mining in the layout of spatial relations of China’s cultural industry in the future and provide an object for mining in seeking the next generation of cultural industries. Data mining and the allocation of cultural policy resources will simultaneously play a role in the

5 Hu Huilin and Wang Jing, Digital Maps for the Development of Chinese Cultural Industries (2006–2012) (Shanghai: Shanghai People’s Publishing House, 2016).

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spatial relations of cultural industries in unknown areas. Here, the scientific application of data mining will be included in the resource allocation and decision-making basis of cultural policies. Big data is triggering a profound industrial revolution, which brings about drastic changes that will deeply affect the formation of a new mainstream technology system and a new system of productive forces. The formation of these two systems will then provide new impetus for their reconstruction and a new round of cultural industry innovations triggered by this. With the arrival of this new round of innovations, the internal structure of the cultural industry will be significantly altered, drawing vast resources of production factors of the whole society to the field of new technology of the cultural industry. Meanwhile, people’s social lifestyle will be transformed, and new cultural consumption demand will be generated, thus initiating a revolution in the cultural industry. Ultimately, the spatial relations of global cultural industries will be swept by dramatic changes and restructuring. A new cycle of growth begins characterized by the emergence of the next generation of cultural industries, which act as a new driving force for the further development of China’s cultural industry. In this process dominated by a data revolution, the spatial relations of the cultural industry will also be reshaped. The “Action Outline for Promoting the Development of Big Data” (referred to as the “Action Outline” below) was issued at an executive meeting of the State Council of China on August 9, 2015. In the “Action Outline”, big data was defined as a “basic strategic resource”, and the information capability of a country was identified as a decisive factor to reshape its key competitive advantage. With the help of big data, we will be able to anticipate future trends. However, whether and how such an ability can be fully manifested and applied in reshaping the spatial relations of China’s cultural industry will have a direct bearing on the role that the cultural industry plays in the modernization of the system and capacity for national governance. The cultural industry is an important vehicle for such a strategic need as developing big data. Whether its spatial relations are designed to meet that need, however, depends on the sustainability of the reshaping of such spatial relations to a large extent. All of these will hinge on the extent of data mining in China’s cultural industry development and strategic elements of application based on this, or, to put it another way, whether the next generation of cultural industries can be discovered so that the Chinese nation will make new cultural achievements that benefit the world and mankind.

CHAPTER 9

The Way Forward for the Strategic Forces of China’s Cultural Industry

The United States subprime mortgage crisis triggered the 2007–2008 international financial crisis that not only hit the world economy hard, threw the economic strategic pattern of the world into chaos but also altered the global landscape of cultural strategic competition in deep and dramatic ways. Under such historical conditions, a new round of great division, reorganization, and reconcentration of cultural strategic forces began in our country. As an epitome of the integration of economy and culture and one of most important cultural strategic forces of a nation, the cultural industry suffered a heavy blow in this unprecedented financial crisis. With shrinking exports and insufficient domestic demand, it became a new strategic issue since then for China’s cultural industry to reorient itself in the face of sudden and profound changes in its internal and external environment. Amidst crises never before seen at home and abroad, China launched the program of reform and opening-up to seek a new way out for its socialism. It was the greatest new institutional policy ever implemented by the CPC since the founding of the PRC. As efforts of reform and opening-up as a whole faced a strategic crisis, the cultural industry was brought into the new policies of the country at the turn of the century as a national strategic force. China’s accession to the WTO not only reflected this crisis but also created a strategic opportunity for the great cause of reform and opening-up to overcome these difficulties. It enabled China to

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set the goal of building a socialist market economy and, for the first time, reorganize national strategic forces and readjust its direction by actively participating in economic globalization. The cultural industry made its debut as a national strategic force and part of the solution to structural tensions and institutional obstacles encountered in the process of strategic economic restructuring. This marked the beginning of the most magnificent era in the history of China’s socialist development, an era of new policies on the cultural industry. It was the greatest structural readjustment of the socialist cultural strategic forces of the country that set a new direction for their development. The way forward for our national cultural strategic forces is determined by the strategic needs of our country. Since the cultural industry has become a major force in the strategic competition between countries today, there is no way to meet the strategic needs of our country, let alone adapt to the profound and drastic changes in the pattern of international strategic competition, without developing the cultural industry. It has therefore become the unanimous choice of the international community to reorient and restructure the strategic forces of the cultural industry. In the financial crisis, developed countries, especially the United States, chose to close down traditional large cultural enterprises, some of which are even century-old. At the same time, they strived to grow the digital cultural industry by actively developing the digital newspaper system and digital publishing system. It was a strategic choice made by the cultural industry of the country to reorganize and reorient its strategic forces in the midst of a financial storm. Technological innovation and institutional innovation are the preferred strategies for the international community in overcoming crises. However, institutional innovation plays a decisive role in all innovations, and productive forces cannot be liberated without changing relations of production. Therefore, the key to all reform and innovation is to change the relations of production that are incompatible with the development of productive forces. In many ways, the cultural industry was identified as a national cultural strategic force participating in national reform and global cultural market competition before it was fully prepared. As a result of this organizational haste, the structure of this strategic force and its direction of development were not fully adapted to global competition. Ensuring that this strategic force is structured in a scientific way and moving forward in a scientific direction through cultural restructuring is an important means to develop the cultural strategic forces of

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our country. During the ten years since China’s accession to the WTO, its cultural industry has made great progress, played a major role in its strategic economic restructuring, and made irreplaceable contributions to the establishment of a new direction for the country’s cultural strategic forces. All these factors provided a rational basis and experience for us to form a correct judgment and understanding of the international financial crisis and implement new policies on the cultural industry. In addition to the great difficulties brought to the development of China’s cultural industry, the international financial crisis also created a strategic opportunity for the cultural industry as a national cultural strategic force to reorient itself. This “strategic interval” gave us time to make deep strategic adjustments to the structure and direction of this strategic force to adapt to the global cultural strategic competition after the crisis. Therefore, institutional innovation carries more weight than technological innovation in developing the cultural industry. The key to readjusting where China’s cultural strategic forces are heading lies in overcoming the most fundamental institutional problem that restricts cultural industry development and practicing new policies on the cultural industry in the financial crisis.

1 Establishing an Innovation System and Development Model Characterized by the Trinity of Traditional, Modern, and Emerging Cultural Industries It took developed countries such as those in Europe several hundred years to evolve from a traditional society into a modern one and then into a postmodern one. Unlike them, contemporary China has to change from a traditional society to a modern society, from an agricultural society to an industrial society, from a planned economy to a market economy and achieve a harmonious coexistence between the two, and from a closed society to an open society, all at the same time. China’s reform and opening-up and social development are faced with a convergence, collision, and integration that the Western developed world has never experienced, with the missions and tasks of the traditional, modern, and postmodern times compressed into one space and time. As illustrated by ERA—Intersection of Time, a cultural tourism project in the form of acrobatic performance in Shanghai, the elements of different eras may

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be mutually coordinated, inclusive, and integrated on a selective basis while also conflicting with, excluding, and negating each other. This is the double effect of space–time compression generated as contemporary Chinese society integrates into the modern world system and participates in economic globalization. It is such a double effect that gave birth to all the characteristics of China’s cultural industry and its basic forms of development and continues to exert a great influence on its current and future development. On the one hand, under the influence of this space– time compression, China has been developing its cultural industry in three aspects at the same time and trying to accomplish in a short period of time a historical task that Western developed countries took two to three hundred years to achieve. As proven by hard facts, the country has made tremendous progress in the cultural industry. On the other hand, however, China has to achieve what took the developed world hundreds of years in twenty to thirty years and gain a market share commensurate with its status as a major cultural power in the international cultural market (for which a timetable has been set). Consequently, the development of China’s cultural industry faces difficulties that are extremely complicated, overwhelming, and even impossible to some extent. Such a space–time compression leads to an inevitable sense of urgency when we reflect upon the structure and direction of China’s cultural industry as a strategic force. We have to analyse the composition of this strategic force based on such urgency and choose the right direction and model of development for the cultural industry with Chinese characteristics. The cultural industry of China is a historical concept with a different course and structure from that of Western developed countries. As a strategic force, it includes both historical and contemporary dimensions. The historical dimension is divided into three stages: ancient times, modern times, and contemporary times. Together, the three stages make up China’s cultural industry system today. The development of the cultural industry with Chinese characteristics and the building of it as a strategic force must be based on this basic cultural reality. The coexistence of traditional, modern, and emerging cultural industries constitutes a fundamental reality in the development of China’s cultural industry, as well as the basic structure of this strategic force, at the present stage and for a long time to come. The vast rural areas, whose population accounts for two-thirds of the national total, are home to not only most of the country’s intangible cultural heritage but also traditional cultural industries based on agriculture and manual production.

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Currently, China’s cultural industry is dominated by the industrialization of oral and intangible cultural heritage. It serves as the primary source of cultural products that satisfy people’s diversified demands for cultural consumption and the manifestation of a spiritual home shared by the Chinese nation and of our cultural identity. The annual storytelling festival in Majie Village of Baofeng County, Henan Province, the art of errenzhuan (a song-and-dance duet) in Liaoning Province, Chinese painting and calligraphy (with the widest coverage, the strongest market, a huge industrial capacity, and a particularly wide base of creators and consumers), and all kinds of folk-art performances and handicrafts constitute the most typical and dynamic form of traditional cultural industries in China. They best embody the Chinese characteristics and cultural strategic strength of the cultural industry. We must not deviate from this basic national condition that is most distinctively Chinese when charting the way forward for the cultural industry and striving to achieve the goals set. The majority of the Chinese people are farmers, which will remain the same for quite a long time in the future. Even if the total population of the country reaches 1.5 billion, farmers will still account for more than two-thirds. Therefore, the strategic development of China’s cultural industry should focus on rural areas and the people living in them. To enhance the strategic strength of the cultural industry, we should continue to fuel domestic cultural demand by devoting major efforts to building and developing domestic cultural markets, the largest of which are the vast rural areas with a population of eight to nine hundred million people. With an increased capacity for cultural consumption that activates the world’s largest cultural market, hundreds of millions of farmers will provide strong support for the rapid, sound, and sustained development of China’s cultural industry. To activate this huge market, we must produce marketable cultural products that adapt to the reality of rural areas and farmers’ lives. Rural reform is the key to breaking new ground in developing socialism with Chinese characteristics, as captured in the Decision of the Central Committee of the Communist Party of China on Several Major Issues Concerning the Promotion of Rural Reform and Development (2008) adopted at the Third Plenary Session of the Seventeenth Central Committee of the CPC. In the final analysis, rural reform benefits farmers and safeguards their interests, not only politically and economically but also culturally. Ensuring that the basic cultural rights of farmers are protected and exercised is at the top of the to-do list. It is important that we proceed from the basic cultural conditions of rural

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areas as a way to show respect for traditional cultural industries that rely on manual production and embody the wisdom of Chinese farmers. Among the four great inventions of China, paper making and printing are regarded today as the most important ones in the history of cultural industry development. These two inventions have not only provided a historic tool for expression for paper media and various cultural industries but, more importantly, inaugurated the first crucial era of cultural industry development in human history: an era based on paper and centered around print media. They made it possible for mankind to create, bring to maturity, spread, inherit, and expand in scale all forms of cultural and artistic expression. In a sense, all cultural industries today have been developed on this basis. Our basic means of expression, which are reading and writing, remain essentially unchanged even in the age of electronic information today, although computer screens and keyboards have largely replaced paper and pen. Therefore, cultural industries built upon paper making and printing have demonstrated the rationality of traditional cultural industries based on agricultural civilization and the irreplaceable foundation they have laid for the birth of modern cultural industries. As observed by Karl Marx, gunpowder, the compass, and printing are the three great inventions that heralded the arrival of bourgeois society. With gunpowder, we blew the reign of medieval knights to smithereens; with the compass, we opened world markets and established colonies. Printing, however, became an instrument of Protestantism and generally a means of the revival of science, the strongest impetus for all necessary preconditions for the development of the creative spirit.1 However, it is precisely the modern development of cultural industries that causes the greatest damage to this strong impetus. As a result, our cultural connections were broken, and the inheritance of cultural genes was interrupted, rendering the development of traditional cultural industries impossible. Ironically, the endless charm of China to the world’s cultural consumers lies precisely in the essence of its traditional culture. This is evident in the variety and composition of books chosen for publishing and copyright trading, as well as in the selection of Chinese film and television works. Although the two are not comparable in content, they reveal a truth together. Among all our national cultural strategic forces, traditional cultural industries have always been an important component with unique Chinese characteristics. 1 Karl Marx and Frederick Engels, Karl Marx, Frederick Engels: Collected Works, Volume 3 (Beijing: People’s Publishing House, 1975), 321.

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Modern cultural industries are a form of cultural industry based on industrial civilization with large-scale mechanical reproduction as the main mode of production, including the modern publishing industry, the radio and television industry, the film industry, the recording industry, and the newspaper industry, which embody the achievements of industrial civilization. With all the characteristics of cultural industry development in the stage of industrial civilization, they make up “the core” of China’s cultural industry that will continue to occupy a dominant position and restrict the structure of strategic forces of the cultural industry and cultural restructuring. However, the development of cultural industries in the country faces adverse conditions. As a result of the global industrial crisis, the world has entered the postindustrial era, when the energy crisis, environmental pollution, and the U.S. subprime mortgage crisis triggered a financial tsunami worldwide that led to the sudden emergence of a global economic crisis. With the reorganization of new international strategic forces and the formation of new international mechanisms, it is impossible for China to launch an industrial revolution in the traditional sense and through which to achieve industrialization. The new industrial revolution that is taking place in the world today has led to fundamental changes in the external environment of China’s modernization. It is no longer a viable option to continue to limit how we set goals in modernization and attain them to a traditional process of industrialization. Otherwise, the country would fall into the pitfalls of modernization, putting the national economy and social development at great risk. The modern cultural industry, including a series of systems and development models built on it, is a product of the industrial revolution and is based on the values established through the industrial revolution. With the system of the industrial revolution being deconstructed by its own development crisis and a new industrial revolution under way, it is obviously impossible to build a strategic cultural competitive edge on par with that of the international community by adhering to the original path and model based on the industrial revolution. Hence, we must be deeply aware of and pay close attention to the coming industrial crisis and the emerging industrial revolution while rethinking how we organize the strategic forces of the cultural industry and chart its way forward. We will never be able to form strategic cultural forces with our own unique form and characteristics if we continue to follow in the footsteps of the West in developing the cultural industry.

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While shouldering the historical tasks of industrialization and urbanization, China also faced the actual requirements of informatization. In other words, the country has a dual mandate in determining the path of development for its cultural industry and reorganizing its strategic forces. In addition to building a complete modern cultural industry system based on industrial civilization, it has to rise up to the challenges of postindustrialization brought about by informatization and vigorously develop emerging cultural industries that rely largely on digital technology and new media. To develop the cultural industry in contemporary China, the virtual cultural economy and the real cultural economy should be built in a systematic way. Such a reality has resulted in the richness of contradictions in the development of China’s cultural industry. Due to the lack of a scientific understanding of the richness of such contradictions and the failure to establish a unique path and model of development based on such an understanding, a variety of new terms and experiments, such as creative industries and cultural and creative industries, emerged in China when the cultural industry was still in its infancy. In fact, any new term or choice involving industrial policies and development strategies has its specific characteristics of the times and specific development issues to be solved. One could easily lose their own characteristics and comparative advantages if they lose touch with reality and choose to develop any type of cultural industry indiscriminately. China needs to liberate and develop its productive forces in the first half of the twenty-first century, but it should not merely reproduce the cultural productive forces of industrial civilization; still less should it repeat the old way of cultural development in which capital and technology marginalize labor. Instead, information technology should be applied to drive industrialization and ecological progress to upgrade the cultural industry, innovate core technologies, and unleash the vitality of the whole nation for cultural innovation. By better combining capital, technology, and labor, we will strive to achieve cultural development and prosperity in a country with a population of more than one billion. Traditional, modern, and emerging (or “postmodern”) cultural industries coexist in today’s China, each with its own rationality and legitimacy. Partiality for or abandonment of any one aspect may cause great losses to the development of the cultural industry. To enhance the strategic force of the cultural industry in contemporary China, we should carry forward Chinese culture, build a common spiritual home for the nation, create new ways of cultural production, and foster new forms of cultural industry

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through innovative and high technologies. In such a context, cultural industry development in China should be characterized by the trinity of traditional, modern, and emerging cultural industries and regional differences in terms of their development policy and strategy in accordance with the conditions of various regions, including the endowments of factors and resources. It is the only way to ensure that, despite the pressure of the financial crisis, China will not blindly develop any kind of cultural industry in any region.

2 Redirecting China’s Policies on the Cultural Industry System Based on the Division of Labor in the Cultural Industry Across the Urban Hierarchy It was put forward at the Seventeenth National Congress of the CPC that we should break through the constraints of the system of administrative divisions, follow the rules of the market economy, guide the flow of production factors across regions, and optimize the allocation of land resources. This is an important thought on development strategy that emphasizes coordinated regional development through such a flow of resources. It guides our studies on the way forward for the strategic forces of the cultural industry as well as economic development. China’s cultural industry has long practiced vertical management, which has played a historic role in rapidly establishing a system of socialist cultural production. However, with the socialist system basically in place and the goal of building a socialist market economy with Chinese characteristics proposed, such a highly centralized system of cultural industry management is obviously out of keeping with the national strategic need of further liberating social and cultural productive forces. Therefore, while exploring the designation of a number of cities for provincial-level status (in economic structure and management), China has made fine adjustments to the vertical management system of the cultural industry: Economically speaking, such cities enjoy the administrative power of subprovincial cities; in terms of culture, they have the same right to set up a system for managing the cultural industry, of which the most significant breakthrough lies in the establishment of publishing houses. The management of publishing houses has been highly centralized in China, an epitome of the characteristics of the country’s cultural industry

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system. In addition to the possession of scarce cultural resources, owning a publishing house also signifies certain cultural rights and power. In fact, the decision to fine-tune the spatial allocation of publishing resources indicates the strategic thinking of decision-makers on whether the vertical management system of the cultural industry continues to meet national strategic needs. It is of particular significance to innovate the cultural industry system of our country by transforming it from a vertical structure to one characterized by flat management through cities specified for provincial-level status. For organizations in the cultural industry, a city is where cultural goods are produced and traded, rather than a symbol of power, although the city itself might possess certain power. For example, Washington D.C., the capital of the United States, is not the center of its cultural industry, while London of the United Kingdom and Paris of France are both national capitals and heartlands of the cultural industry. Here, cities provide space for industrial clusters. The city with the most favorable environment for the agglomeration of cultural industries is likely to develop into the cultural industry center of a region or even the whole country. A city is a place where the cultural industries of a region are concentrated; it reflects the extent of modernization of cultural industries in this region. Hence, city clusters are being built to restructure the competitive forces of the region while implementing China’s regional development strategy and creating national functional zones for regional development. This has become the most eye-catching form of competition in China. Facing such a strategic situation, a new dimension has to be added to the institutional innovation of the Chinese cultural industry based on its urban hierarchy, while we think about and look into the scientific structure and coordinated development of the strategic forces of the cultural industry. The hierarchy of cities and the resulting levels and scales are a natural consequence of urban development, as well as the product of historical choices and the social division of labor. As one city rises in the hierarchy, another falls. This cycle continues as the division of labor deepens in the process of social development. Yangzhou (in Jiangsu Province) and Kaifeng (in Henan Province) used to be metropolises and cultural centers in China and even in the world, but this is no longer the case today. The development and distribution of a country’s urban scale follow the rules of level and scale. Today, such rules have been regulating and restricting cultural industry development at different levels and scales across the urban hierarchy. In other words, not every city can choose to develop

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cultural industries of any category or establish and expand cultural industries of any scale based solely on their intentions and goals. Only in the first-tier and “newly minted” first-tier key cities—mostly provincial capital cities in our country—is it possible for cultural industries of a certain scale to take shape and blossom: the newspaper industry, the publishing industry, the film and television industry, and the record industry, to name a few. This is because a first-tier key city is usually a regional center of culture and administration. It is where key resources of cultural industries within the designated jurisdiction are amassed, forming cultural productive forces that lead to a strong capacity for cultural production. Moreover, such a key city is often populated by people with the highest disposable income in the region, making it the “natural habitat” of the cultural consumer groups that generate demand for cultural products. These are two indispensable factors that play a decisive role in the formation of a first-tier city that is also one of the cultural centers of the country. All policies and rules concerning the redistribution of cultural resources and cultural wealth and the redivision of labor are initiated in such a city. However, lower-level cities—mainly prefecture-level and county-level cities in China—are unable to develop certain cultural industries due to the lack of such rights as a result of institutional arrangements. In terms of cultural industry development, it is impossible for lower-level cities to ascend to the first tier as long as the established spatial pattern of cultural power remains intact. The hierarchical differences in cultural administration have led to various levels of cultural industry development in different cities. In other words, a clear administrative division of labor in the cultural industry is formed between cities of varied types and scales, including the national capital, municipalities directly under the Central Government, provincial capitals, prefecture-level cities, and county-level cities, giving rise to the urban hierarchy of cultural industry development. Generally, cities at higher levels can engage in all the cultural industry activities conducted by those at lower levels, and many more. According to the current cultural system of China, apart from provinces and municipalities directly under the Central Government, only cities specified for provincial-level status (and some approved professional publishing houses such as those in Suzhou and Guangling Publishing House in Yangzhou) enjoy the right of publication. Such an exclusive right is denied even in provincial capitals. The publishing industry is the center of cultural administration and the heart of the cultural industry of a province, pooling all its key cultural industry resources.

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However, cities of different levels and scales have different needs in terms of the development of cultural industries, and the desire to move up to a higher level has been propelling cities at a lower level forward. It is this impulsive need to change the status quo that spawns most of the development strategies for the cultural industry in a majority of cities (mainly provincial cities in our country), posing a challenge to the current urban hierarchy of cultural industry development. The most obvious target is the cultural industry power of provinces, which is greater than that of cities. This is the trend of cultural industry development in modern China. The existing levels and scales of cultural industries cannot be effectively broken through within the current system. As a result, cities have to seek new paths of development and new forms of cultural industry and take the initiative to occupy strategic space in this process to alter the established rules of level and scale and the urban hierarchy in the cultural industry. This has become the strategic motivation for a new round of changes to the urban hierarchy of cultural industry development and its formation. The city of Changsha has been able to occupy a prominent position in fields such as entertainment, cartoon and animation, book circulation, and television production in recent years. One important reason is the city’s dissatisfaction with the distribution of cultural rights and cultural resources and the resulting endeavors to challenge it. For the same reason, cartoon and animation bases continue to emerge throughout the country, with great efforts devoted to developing the industry. As this is a nontraditional cultural industry in the existing structure of cultural administration, a new urban hierarchy of cultural industry development takes shape in this process. The challenge presented by cities at a lower level to the existing urban hierarchy is bound to deconstruct the market potential of the cultural region as a whole, throwing regional development out of balance and making it impossible to maximize cultural industry development within this region. Accordingly, it is necessary that we proceed from the rules of level and scale in urban development and put the spatial and functional structure of the cultural industry in a certain region or river basin in a new stage of development and perspective. In thinking about and studying how to readjust the strategic forces of China’s cultural industry and reorient their development today, we actually face two major issues. One includes regional centers of power and national economic entities formed through administrative divisions, and the other refers to the urban hierarchy of cultural industry development

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within the structure of cultural administration generated under the system of administrative divisions, composed of municipalities directly under the Central Government, provincial cities, cities specified for provincial-level status, and municipalities directly under provincial governments (namely, prefecture-level and county-level cities). The hierarchy of cultural industries within different structures of cultural administration varies in internal structure and interrelations between its various levels, the most crucial of which is administrative subordination. Provinces in general have a fairly complete hierarchy of cultural industries, while municipalities directly under the central government do not. As a result, market entities involved in the coordinated development of regional cultural industries are often of different levels in the urban hierarchy: A city has to compete with an entire province instead of another city, for example. Generally, urban hierarchies within the jurisdiction of a province are subject to the control of the province, the regional center of supreme power. As a cultural administrative authority, the province has the right to reallocate the cultural industry resources of the cities within its jurisdiction. It is therefore difficult for a city to bypass the province in which it is located and establish cultural industry relations with a municipality directly under the central government in the same region. The administrative concept of provinces is of particular importance here. In addition to being regional administrative centers, provinces serve as regional centers of cultural power, forming the largest obstacle to the coordinated development of regional cultural industries and the strategic development of cross-regional cultural industries in today’s China. Provinces and municipalities directly under the central government are two different forms of cultural space in conflict with each other. Moreover, the cultural rights and cultural power of a province tend to collide with those of the provincial capital where its administrative center is located. Historically, there is often one or even several cultural key cities within a region that exert a cultural influence throughout the region, forming a regional cultural hierarchy with it as the center. We must, therefore, break through the strategic power structure of provincial cultural administration to balance and coordinate cultural industry development across the country. The provincial government shall no longer be in charge of formulating development strategies for regional cultural industries, and the provincial institutions responsible for this shall no longer be subordinate to the provincial government; the municipal government shall take over provincial cultural market entities. In doing so, market entities of the cultural industry will acquire the same rights as

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those in the real economy. For instance, they will be entitled to choose the city where their cultural enterprise will be based, regardless of the institutional restrictions on cultural industry development in cities of different levels. In other words, a company engaged in the cultural industry can move its headquarters to a city that is not a provincial capital if it deems it more suitable for its strategic development. We should give play to the basic role of the market in allocating cultural industry resources and put an end to the original administrative design where resources are distributed according to the system’s cultural administrative divisions. On this basis, we should then fully mobilize every city in the region to develop the cultural industry to form a new pattern of strategic forces characterized by the reasonable distribution of resources, mutual complementarity, proper division of labor, healthy competition, and coordinated development. Cities at different levels of cultural industry development can thus build cross-regional alliances and communities based on their respective strategic interests, and through such alliances, they invest more extensively in the strategies for developing cultural industries, such as taking our cultural industries onto the global stage. With the establishment of an urban hierarchy in the cultural industry, China’s system of cultural administration will also begin to show flexibility thanks to renewed market vitality. Cultural resources are unevenly distributed between cities in China, resulting in an unbalanced system of productive forces and division of labor in the cultural industry across the country. We will lose touch with such a reality, or even worse, cause great damage to limited cultural resources, if we adopt a onesize-fits-all approach by requiring that cities at all levels devote the same amount of effort to developing cultural industries. Low-level and redundant industrial projects and chaotic market competition are prevalent not only in regional economic development but also in the regional development of cultural industries. Developing the cultural industry, let alone key cultural industries, is by no means the only way to achieve strategic economic restructuring and change the mode of economic growth and development. Instead, a functional development mechanism of industrial clusters across a larger region should be established, centred around cultural key cities of the region, structured according to the network of such regional key cities, and based on the strategic space formed by small and medium-sized cities. In other words, China should overcome the institutional restrictions of its current system of administrative divisions

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and build a new division of labor system in the cultural industry by strategically restructuring cities in different administrative regions according to their functions so that different types of reproduction in the cultural industry will become scientific and rationally distributed. In the face of the financial crisis, it is necessary that China practice new policies on the cultural industry with the following key strategies. First, we should eliminate the long-standing misconception about the cultural industrial chain in the regional development of cultural industries by rebuilding our models of thought and theory based on the hierarchy of cultural industries. New thinking on the cultural industry chain should be developed based on the division of labor in the cultural industry across the urban hierarchy by thinking outside the box of small and all-inclusive industrial chains. To truly liberate cultural industry development from the shackles of our current system without compromising cultural productivity, we should create a new system that optimizes the allocation of cultural industry resources and allows various cities in the region to each play their proper role.

3 Creating a Modern Cultural Market System Open to all Regions Large and Small Promoting new models and patterns of regional development and building functional zones is and will be a basic strategy in China’s national economic and social development for a long time to come, as well as an important strategic measure for the country in establishing a new division of labor systems under new historical conditions. In the long term, the strategic restructuring of China’s economy and the values that guide the transformation of its development mode will be influenced by whether the orientation and direction of economic and social development of different functional zones can be clearly defined and a new pattern formed in which economic growth, social progress, and resources and the environment are coordinated. As economic communities, regions, especially larger regions, will break away from the existing model of economic development and exchanges based on the institutional framework of provincial and municipal administrative divisions. The competition between regions will become the most important form of competition between different economies characterized not by homogeneity but by the complementarity of advantages and the competition of comparative advantages between different functional

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zones. A national common market and large regional markets will be formed, reshaping the way resources are allocated in our country with various forms of capital flow redefining the original concept of regions. Whether as a form of economy or culture, the cultural industry will turn regional cultural competition into a trial of strength between regions rather than between entities. This is due to the irreplaceable role it plays in strategic economic restructuring and the transformation of economic development modes as a new form of production resource and a force of capital. Hence, city clusters are being built to restructure the competitive forces of the region while implementing China’s regional development strategy and creating national functional zones for regional development. This has become the most eye-catching form of competition in the country. Facing such a strategic situation, it is necessary that China build a mechanism featuring the functional development of industrial clusters across a larger region as another important part of its new policies on the cultural industry in the midst of a financial crisis. With spiritual production as its focus, the cultural industry serves as a major channel through which people’s diversified demands for spiritual and cultural consumption are satisfied. The extent to which such demands are satisfied depends on one key indicator: highly creative spiritual production, which is then determined by the degree to which people can enjoy freedom of expression and communication in the spirit of the Constitution. All cultural industries function as tools and carriers of freedom of expression. There is a positive correlation between the development of cultural industries and how much freedom of expression is granted to the people. The two share one core in common: the cultural rights of citizens. Freedom of expression is a right of citizens, and the cultural industry is their tool and means to exercise this right. At the core of all freedom of expression is free speech, which is achieved mainly through freedom of the press. As the press in its industrial forms, journalism and publishing constitute the most important component of the cultural industry. Therefore, any restrictions and regulations on access to journalism and publishing are an extension of the power to restrict freedom of expression. How much control over freedom of expression is legitimate? This is an important component of freedom of expression itself involving basic principles of the law governing such freedom. You cannot expect the modern cultural industry to mature and flourish without granting people freedom of expression and communication. However, there is no such thing as unregulated freedom of expression; only freedom

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of expression subject to varying degrees of regulation. The unprincipled demand for deregulation of market access and freedom of expression in the cultural industry is not only unprecedented in the world but also irresponsible. Therefore, the question is not whether regulation of the cultural sector is necessary but what kind of regulation is scientific and essential for the development of the cultural industry. Despite the vast differences in the understanding of the regulation of the cultural sector and standards established by that understanding in various countries and among different groups of people, most countries have designed their systems based on a common principle, which is to maintain national cultural security. Whether it is news censorship, the film rating system, or the ratings of online games issued in China in 2010, the most basic and important purposes are to safeguard the mental health and security of minors and defend the fundamental values and way of life of the country. Here, there are two basic dimensions, minors and the lifestyles and values of a country and nation, which concern the future of the country and nation and its cultural identity, respectively. They serve as a common principle for the cultural censorship and cultural industry regulation of the vast majority of countries in the world. The development of human society also follows such common criteria. Freedom of expression shall enjoy extensive space and institutional support provided that they do not violate the law or these two fundamental principles. The establishment and reform of China’s regulatory system for the cultural sector should naturally proceed from the reality of the country and have Chinese characteristics. The current cultural reality in China is characterized by a common national spirit. Stricted by the Wenchuan earthquake of 2008, an unprecedented national disaster, the Chinese people, especially the younger generation, responded in a way that was completely unexpected. As a tool for the generation that excels at expressing their own opinions, the Internet had taken on the task of rallying the whole nation as never before. Freedom of expression was given full play in a space never before existed. Moreover, when the Olympic Torch Relay encountered undue obstruction in China, it was also the post eighties who used the Internet to fully and freely express their aspiration to defend their country and national dignity. This demonstrated the maturity of the Chinese people in modern society, giving government regulators full confidence and a new basis for evaluating the regulation of the cultural sector. The Regulations of the People’s Republic of China

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on News Coverage by Permanent Offices of Foreign Media Organizations and Foreign Journalists (Decree No. 537 of the State Council) were promulgated on October 17, 2008. According to Decree No. 537, the main principles and spirit of the Regulations on Reporting Activities in China by Foreign Journalists during the Beijing Olympic Games and the Preparatory Period (Decree No. 477 of the State Council) were written into long-term laws and regulations,2 easing restrictions on foreign media reporting in China. Regulation of the press is the most stringent regulatory regime in the cultural sector. To some extent, there is no stricter regulation than that of the press. By hosting the Olympic Games, we have found confidence and taken a new and more assertive stand on the regulation of the press. Thus, we have been able to establish new ideas and theories that help optimize the regulatory system of the cultural sector and create a new cultural regulation system with Chinese characteristics for the development of the cultural industry, thereby providing institutional support for a cultural market system that is fully accessible and open to all regions large and small. The strategic difficulty faced by China’s cultural industry in its current development is multifold. At the national level, the regulatory system of the cultural sector needs to be further relaxed and optimized. In addition, the cultural market is, to some extent, intentionally divided by monopolistic interest groups, resulting in regulation by such interest groups, a new form of nongovernmental regulation. Take the reform of the book circulation system in Jiangsu Province as an example. Before cultural restructuring, Xinhua Bookstores in Suzhou, Wuxi and other cities close to Shanghai could directly purchase books in the varieties and quantity as needed from Shanghai publishing houses according to the demand of the local market. In other words, Xinhua Bookstores in cities of this tier enjoyed the right to purchase independently. With the establishment of provincial Xinhua distribution groups, however, the right of independent procurement was withdrawn. If these bookstores need to purchase a certain type of book, they must report to the provincial distribution group that will complete the purchase through the distribution system. Otherwise, they will be punished. Despite creating institutional obstacles

2 “The Ministry of Foreign Affairs held a press conference to elaborate on the Regulations of the People’s Republic of China on News Coverage by Permanent Offices of Foreign Media Organizations and Foreign Journalists,” People’s Daily, October 18, 2008.

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to the circulation in the cultural market, the existing system of administrative divisions still has some sort of historical rationality. However, the division of a unified cultural market in the name of the market economy is far worse than the unified distribution in a planned economy. Through such a so-called industrial concentration and optimal allocation of resources, the original urban hierarchy of cultural industries, which divides cultural power and rights between cities based on their levels and scales, is replaced by a unitary and centralized system centered around provincial-level groups that reallocates cultural resources through administrative power. This hinders the establishment of a cultural market system that boasts barrier-free circulation, which is necessary for the development of China’s cultural industry. As a result, the achievements of cultural restructuring have been dissolved and transferred into local interests. With government control over the cultural industry further strengthened through the establishment of cultural industry groups, increasing power has been handed over to the government, while the regulatory power of the market has been weakened in the name of reform. The “oligopoly” of the local cultural market by provincial cultural industry groups has obliterated the positive results of the previous round of cultural restructuring in redefining cultural property rights, perfecting the framework of the market economy, and restricting and standardizing cultural administrative power. This poses a new challenge for the further development of China’s cultural industry and a strategic problem for the coordinated development of regional cultural industries. The lack of necessary and sufficient market space caused by such an institutional obstacle has rendered freedom of expression and freedom of communication impossible. Therefore, to create a truly favorable ecosystem for China’s cultural industry after the financial crisis, it is necessary to carry out a profound and major reform of the strategic forces formed by the existing institutional obstacles and return power to local authorities. The boom in China’s film industry in recent years and the achievements it has made are closely related to the profound reform of the whole industry and the innovation of its system and mechanism, as well as the reorganization of its main strategic forces. Any investor has the right to invest in film shooting as long as they comply with relevant state regulations. Loosening regulation does not mean removing all control. Instead, we should draw on various international experiences, combine them with the cultural conditions of China, and establish a cultural regulatory system with Chinese characteristics.

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The existing system of administrative divisions has resulted in local protectionism and administrative barriers, forming institutional obstacles to the reorganization of strategic forces and strategic coordination in the cultural industry. The problem lies not in the system design of administrative divisions itself but in the relation between such a system design and the institutional arrangement necessary for the cultural industry to develop. We cannot envision the abolition of administrative divisions, which would be both impossible and harmful. Given the current system of administrative divisions, how can we create a mechanism of development for cultural industries in accordance with rules and laws to build a barrierfree cultural market system for the development of cultural industry across all regions? Rather than leaving the decision to local policy makers, policies concerning the cultural industry should be unified across the country so that a cooperative mechanism can be formed in the national cultural market that allows for barrier-free circulation. This indicates a direction for reform in developing the strategic forces of the cultural industry. Unlike the formation of industrial policies in many developed market economies, the local governments in China have the power to independently formulate industrial policies. It is difficult to eradicate disordered competition between local governments within a short period of time. This means that local governments may choose similar industrial strategies, resulting in redundant industrial projects and the convergence of industrial structures, thus exacerbating regional competition, market fragmentation, and local protectionism. Therefore, to form a unified national market, it is necessary to formulate unified national policies that coordinate the relocation of industries and industrial upgrading. Meanwhile, the structure of the cultural industry should be improved, the system of regional division of labor should be perfected, and a differential development index that focuses on regional functions should be established. There has long been an erroneous tendency in actual government work to judge performance by GDP. Such a practice has helped us achieve rapid economic growth and accumulate national wealth in the process of strategically shifting the focus of our work while correcting the mistakes we used to make by taking class struggle as the guiding principle. However, as the economy and society gallop ahead, various new problems and conflicts have emerged. The index system for evaluating cultural industry development must now be guided by a new scientific outlook on development and values, especially after paying a huge price in terms of cultural resources and the cultural environment. We have

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to go beyond our historical understanding of the regulatory system of the cultural industry and the historical limitations caused by this understanding and liberate the cultural industry from the current institutional framework by removing provincial-level management and monopoly over cultural market entities. Specifically, the right to administer state-funded cultural enterprises should be delegated to lower-level governments. We should expand the meaning of investors of state-owned cultural assets defined in the original cultural administrative system to establish a new cultural industry system based on a reasonable division of labor rather than the system of administrative divisions. New institutional arrangements for the cultural industry should be made, and a new cultural market system should be created according to the urban spatial layout rather than the administrative structure. The cultural industry should break away from the existing index system for evaluating the national economy. Meanwhile, it must overcome the misconception about political achievements based on this system and the institutional obstacles to the formation of a “cross-border community” caused by such a misconception. The market entities of the cultural industry should strive to achieve the creative growth of national wealth by legally, reasonably, and consciously pursuing profit under the constraints of the law and moral self-discipline. In this process, the redistribution of national cultural wealth and free flow of cultural elements can be realized by improving the function of taxation as a policy lever. The responsibility of the departments for cultural administration is to lay a solid foundation of policies and regulations for a fully accessible cultural market system open to all regions large and small. More specifically, a differential development index of cultural industries should be established based on the various functions of cultural industries in different regions. An index system should also be built to evaluate the performance of cities at different levels in the urban hierarchy of cultural industries within the same functional zone. Cities should be guided to differentiate themselves by giving full play to their endowments of factors and resources and comparative advantages, thus putting an end to homogeneous competition besetting cultural industry development at the present stage. In conclusion, the market, in addition to the government, should play an active role in promoting a division of the labor system in the cultural industry with Chinese characteristics based on the urban hierarchy of cultural industry development, thereby achieving barrier-free circulation and full accessibility across all levels and all regions. Only in this way can we achieve the goals of cultural industry

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development in China to the maximum extent by reorganizing strategic forces and following a new path.

4 Providing Vigorous Support for Non-Government-Run Cultural Industries While Developing State-Owned Cultural Industries China’s cultural industry development in its first stage was distinctly characterized by great efforts made by the government to build a strategic force through the establishment of a national cultural industry system after joining the world trade system. There is no doubt that today’s strategic pattern of cultural industry development would not have been formed without this initial driving force. Such institutional dependence, however, has caused great difficulty for the scientific and sustainable development of the strategic forces of the cultural industry. The local government interfered too much in the market, and businesses had been engaged in unhealthy competition against the government,3 which was made even worse by the underdevelopment of strategic social forces. As a consequence, the national cultural industry undertook a heavy burden in coping with the financial crisis and transforming the mode of economic growth and development. The state was left unable to fully assume its major strategic responsibilities of strengthening national cultural soft power and safeguarding national cultural security. It is therefore necessary that we restructure the strategic forces of China’s cultural industry and provide vigorous support for nongovernment-run cultural industries while developing state-owned cultural industries. 1. Change our perception of the strategic development of the cultural industry and reestablish the relation between stateowned and nongovernment-run cultural industries to balance and coordinate the various strategic forces of China’s cultural industry. The cultural industry is by its nature part of the nonpublic domain featuring market allocation of resources and well-developed nongovernment-run cultural industries. However, as a country long 3 Zhang Xiaoming, Hu Huilin and Zhang Jiangang, Annual Report on the Development of China’s Cultural Industry (2008) (Beijing: Social Sciences Academic Press, 2008).

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dominated by the planned economy, China’s state-owned cultural industries are excessively concentrated, a direct cause of the lack of nongovernment-run cultural industries. Highly concentrated state-owned cultural industries have contributed to a rigid cultural industry system in which organizations in the cultural industry are directly supervised by the government. Moreover, the economic and social benefits created by such organizations are the immediate embodiment of the effective political achievements of the government in the existing system and mechanism. Cultural industry development, therefore, concerns not only the activities of these organizations as market entities but also the competition between local governments. The lack of effective development of nongovernmentrun organizations in the core cultural industries—mainly publishing and radio and television—has thus become the largest structural obstacle to the coordinated development of strategic forces in China’s cultural industry. In China, cultural industry alliances have taken shape in areas with relatively more social participation. Examples can be found in the exhibition and performance industries, where there is a less rigid form of competition for and fewer local barriers to industrial development and market access. The performance industry is highly accessible with a great deal of social participation and a free-flowing market, although alliances of performing arts were initially organized by local departments of cultural administration and performance management. These social organizations share certain interests with the government. As a result, regional and cross-regional alliances of performing arts have played a positive role in coordinating the development of the regional performance industry and creating a thriving performance market. In this sense, the degree to which strategies for cultural industry development can be coordinated in a region is positively associated with how well-developed nongovernmentrun cultural industries are in the region. One important reason for the difficulty in coordinating strategies for developing the journalism and publishing industries between regions lies in the low proportion of nongovernmental strategic forces caused by excessive administrative monopoly over such cultural industries. The extent to which strategic forces can be coordinated in these cultural industries is determined by the distribution of state-owned cultural industries and nongovernment-run ones. It is precisely the cultural products provided by these cultural industries that are quasipublic to a large extent. Therefore, while insisting on the government’s

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role in providing public goods for society, we must also realize that, with the development of economy and society, it is impossible for the government to provide all public goods. On the one hand, the public demand for diverse cultural products cannot be met by the government as a result of information asymmetries and limited financial resources. On the other hand, one major function of the market is to produce nonpublic goods with exclusive technologies, and when the marginal benefit of such public goods exceeds its marginal cost, there is an incentive for the market to supply public goods voluntarily. A new and multidimensional source mechanism is needed to compensate for the shortage of an effective government supply. A strategic partnership in cultural products can thereby be formed between the government and the market and between state-owned and nongovernment-run cultural industries. In this process, the overly rigid organizational structure between regions in the core cultural industries should be gradually weakened, and the flexibility of market relations between industrial organizations should be enhanced. To this end, we should change how we perceive the composition of strategic forces in the cultural industry so that a new and reasonable relationship can be built between state-owned and nongovernment-run cultural industries; the government should be encouraged to transform the way it manages the cultural industry by developing and giving full play to the functions of nongovernment-run cultural industries; and by readjusting the proportion of state-owned and nongovernment-run cultural industries, we can better coordinate different strategies for cultural industry development and achieve the strategic goal of coordinated development. We must overcome the binary opposition of “public” versus “nonpublic” when discussing the attributes of cultural industry organizations. The nonpublic concept is of great significance to the market-oriented development of cultural industries. However, it is a policy-oriented concept that fails to include existing capital forms other than nonpublic capital. In practice, it often results in the binary confrontation between public and nonpublic forces and discriminatory policies against nonpublic ones. Hence, the concept of “nongovernment-run cultural industries” was proposed in place of “private cultural industries,” which are funded by nonpublic capital. This helps eliminate the binary opposition between public and nonpublic, truly reflects the diversity of cultural industries in the country, and standardizes policies. Moreover, it is conducive to the formulation of the overall development strategy for the national cultural

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industry as the systems, theories, and policies for the national sector and nongovernmental sector are planned as a whole. 2. Innovate the idea of reformation, release space for industrial development, and devote major efforts to developing nongovernment-run cultural industries to strategically transition from the transformation of public institutions into enterprises to the systematic transformation of ownership in cultural restructuring and better coordinate cultural industry development between regions. One major characteristic of the cultural industry is that there is limited space for development, which means that the market can easily reach saturation within a certain industrial structure. No industry can expand indefinitely in space. Only by optimizing the structure of market entities in limited industrial space can we maximize the efficiency of space. In the existing spatial structure of China’s cultural industry, state-owned capital controls the vast majority of the core cultural industries, while social cultural capital occupies a meagre share, or even none at all, in some areas. As a result, state-owned cultural industries face high market risk. In addition, the rigid structure due to space limitations makes it almost impossible to coordinate strategies for developing the core cultural industries between regions. There is therefore a lack of social autonomy for the coordinated development of regional cultural industries. To cope with this, we must release proper space for nongovernmental forces to flourish in the core cultural industries. Furthermore, by fostering new market entities that contribute to a more flexible spatial structure, a strategic mechanism can be created for the coordinated development of the national cultural industry and better coordination between regions. The transformation of public cultural institutions into enterprises has been at the heart of China’s cultural restructuring in recent years. However, such reformation does not alter the structure of the cultural industry, which is dominated by the state alone. Institutional obstacles and structural tensions remain the biggest barrier to cultural industry development in the country. The failure to make strategic breakthroughs in creating a new system is one of the manifestations. Over the years, China’s film industry has achieved great success. After joining the WTO,

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China opened its film market to the outside world and faced overwhelming competition. In response, the country introduced a series of policies and measures for the reform and development of domestic films between 2003 and 2005: improving the quality of film production, facilitating the transformation of state-owned film production institutions into enterprises, encouraging the participation of private capital in film production, advancing the reform of the system of movie theater chains, streamlining film management, and increasing the number of coproductions between China and other countries. Such policies and measures have greatly stimulated the vitality of film production in China. The most prominent change lies in the participation of social capital, which has joined forces with the state to create a new strategic landscape. The market structure of the film industry, in particular, has experienced radical changes as high-budget commercial movies began their push into the world market. Nongovernmental forces in the cultural industry represented by Huayi Brothers Media Corporation have played an irreplaceable role in this process. Without their positive involvement, it could be a different story for China’s film industry today. China Merchants Bank set a precedent in 2006 by lending fifty million yuan to Huayi Brothers for the production of Assembly, a war movie directed by Feng Xiaogang. In March 2009, the Beijing branch of the Industrial and Commercial Bank of China lent another 120 million yuan to Huayi Brothers to support the production and distribution of four films made by the company between 2009 and 2010. The loans granted by the banks affirmed the creditability of Huayi Brothers. More importantly, it sent a positive message: Without the active participation of such social forces, it would be impossible for China’s cultural industry to achieve its strategic rise. To cultivate market players capable of making international strategic investments and fostering major social forces in the newspaper and publishing industries, we must introduce social capital in these two strategic battlefields and overhaul the unitary structure of investment. Meanwhile, a direct financing system between the banking industry and the cultural industry must be established, rather than the government signing agreements of strategic cooperation with banks on behalf of investors. The difficulties in financing, which have been restricting the strategic development of the cultural industry, should be addressed with the help of financial institutions. Only in this way can China foster newspaper groups such as News Corp, international publishing groups such as Beacon Press, and integrated entertainment groups such as Disney. State-run cultural industries

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alone cannot undertake such a significant mission simply by transforming public institutions into enterprises. The online gaming industry in China, for example, might have had a longer way to go in the international arena without Shanda Group taking the first leap. Therefore, we must transition from the transformation of public institutions into enterprises to the systematic transformation of ownership in cultural restructuring. It is the only way to fundamentally liberate cultural productive forces and create a supportive system for coordinating the strategic forces of the cultural industry. In other words, it is necessary that we restructure the institutional design of China’s cultural industry and provide vigorous support for nongovernment-run cultural industries while developing state-owned cultural industries. Only then is it possible to achieve breakthroughs and innovations in the strategic mechanism of the coordinated development of the cultural industry and reorganize its strategic forces. 3. Reform the system for the entry of social capital into cultural industries and implement moderately loose management of cultural industry access and classification. Establishing a system for accessing cultural industries is an international practice. China is certainly no exception in this regard. Before an effective management system can be built for the cultural industry, it is necessary to moderately tighten access to cultural industries for political stability and the establishment of a new cultural system. This is also a common practice in the international community. However, as the new cultural system takes shape, we have to reasonably relax access to cultural industries to liberate cultural productive forces and boost the cultural market. By releasing industrial space back to the market and society, tensions between the state and society can be eased, and infinite responsibilities and pressure on the government can be lifted off. This is a sign of the highly scientific cultural governance by a mature country and government. China’s reform and opening-up in the cultural field has experienced a historical process from the opening-up of cultural circulation to that of cultural production. In the meantime, it has become an important policy to encourage nonpublic capital to engage in the cultural industry. This policy has helped promote the transformation of state-run cultural industries into nongovernment-run cultural industries and the coordination and interaction between these two types of cultural industries.

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The need for rapid development of the cultural industry has been insufficiently met with the existing system of access for nonpublic capital. Without further reform, there is no way to effectively overcome the institutional obstacles and structural tensions that have led to the lack of vitality and momentum in the cultural industry. Thus, reform through the implementation of moderately loose access is a must. This has become a major institutional innovation for the coordinated development of the cultural industry and the reorganization of its strategic forces in China. Most importantly, we should loosen the control of access to the newspaper and publishing industries at the present stage, allowing all kinds of studios that have played a complementary role to legally enter the publishing industry in the form of various industrial organizations. Specifically, we should establish and foster a large number of new newspapers and publishing houses under various forms of ownership, clarify their position as entities of the publishing market, and on this basis develop the nongovernment-run publishing industry. Furthermore, the country should explore a new cross-industry, cross-regional, and cross-ownership path of publishing through the market mechanism by encouraging the participation and merger of various forms of cultural capital within the framework of the Constitution and laws. Ultimately, systematic experience will be gained for the further breakthroughs of coordination in the core cultural industries. In this process of systematic innovation, a mechanism of scientific management for classification is certainly indispensable. First, new standards for access should be established through the formulation and promulgation of laws and regulations governing publication and the press. While lowering the access threshold and streamlining registration procedures, we should also build an effective order of access and implement a “dual-track” system combining publication registration with industrial and commercial registration. Furthermore, we should establish relevant industry associations and promote cooperation between organizations through a self-discipline mechanism. Finally, institutional obstacles should be overcome through the development of the nongovernmentrun publishing industry, thereby giving impetus to the coordination of strategic forces in China’s cultural industry and its overall institutional innovation.

CHAPTER 10

The Structural Adjustment and Strategic Innovation of China’s Cultural Industry

China’s cultural industry has been developing against the background of the profound adjustment and transformation of development strategies in the international community. It is bound to advance synchronously with the evolution of development strategies in the international community, the reform of global cultural governance, and the further deepening of cultural strategic competition worldwide. This has become a remarkable characteristic of the changes in strategies for China’s cultural industry. The world today has entered an era of comprehensive competition of cultural strategies, which have become the most important tool of strategic competition between nations. A major form of international strategic competition is to use cultural strategies to obtain new strategic interests. This affects the direction in which world culture is heading and the reorganization of the pattern of cultural power. To obtain comparative advantages in this strategic competition, China must bolster the momentum of cultural industry development that is branded with Chinese characteristics and focusing on cultural origins.

© Social Sciences Academic Press 2022 H. Hu, The Development of the Cultural Industry in China, China Connections, https://doi.org/10.1007/978-981-19-3355-4_10

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1 Several Issues Concerning Strategic Relations in the Development of China’s Cultural Industry This is an era of strategy. Strategy has become one of the most dynamic words of decisive significance in national development. In today’s world, a country that does not discuss and reflect upon national and international strategies is bound to be severely marginalized or have no future in the international arena. Facing such times with an unprecedentedly intense competition of national cultural strategies, what kind of cultural strategy should China have? How should the country handle its cultural strategic relations with other countries? Such are the questions of the century for China to answer in its cultural development. 1. The basic relationships in the development of China’s cultural strategies A country’s cultural strategy is formulated on the basis of its external and internal relations. A national strategy is in every sense a strategy based on a system that uses other countries as an object of reference. Therefore, the establishment and changes of the existing international cultural strategic order, as well as the position of a country in this international system of cultural strategies, are of great significance to the choice, composition, and development of a country’s cultural strategy. There would be no national cultural strategy without such a system. The international cultural strategic order is the result of cultural strategic competition and strategic competition between countries. It refers to the stable cultural power relations between countries, including the voice, weight of speech, and control possessed by different countries in global cultural affairs under certain international circumstances. The cultural strategies formulated by all countries are determined by their own place in these relations and are a direct embodiment of how they contend for and maintain dominance in building the world cultural order. Any change in a country’s choice of cultural strategy will trigger greater changes in the pattern of cultural strategies of other countries, regions, and even the whole world. Consequently, the cultural strategic direction of any country, especially a major power, will have a profound impact on the cultural strategic interests of other countries, resulting inevitably in a cultural strategic dilemma. This is especially evident in the cultural

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strategic competition between regions and great powers. External relations in cultural strategies refer to the relations between a country’s cultural strategy and that of other countries and the world. The handling of such external relations is an unavoidable strategic issue for any country. The national strategy of a country is a system of which the cultural strategy is a component. The relations between the changes of cultural strategy and those of political, economic, and social development strategies of a country, as well as the changing composition of the cultural strategy itself, constitute the internal relations that make the cultural strategy of the country unique. Such internal relations are a result of the historical development of a country and an internal quality that is necessary for the country to formulate its cultural strategy. They contribute to the individual characteristics of the development of a nation’s cultural strategy and how it differs from that of other countries. These external and internal relations represent two opposing sides that collide with each other and produce the results of all cultural strategic development. How a country deals with such basic strategic relations will lay the foundation for all the development of its cultural industry. In a letter addressed to Vannevar Bush dated November 17, 1944, President Franklin D. Roosevelt requested that Bush, then Director of the Office for Scientific Research and Development (predecessor of the National Science Foundation), submit a report on the development of science in the country after the end of the Second World War. A year later, Bush presented Science: The Endless Frontier (July 1945), which covered not only natural sciences, such as biology and medicine but also the equally important humanities and social sciences. This report played an irreplaceable role in strengthening the national strategic capabilities of the country and promoting national development after the war. It gave rise to the most important strategy for national development, including the cultural development of the postwar United States, to which much of America’s progress today can be attributed. It provided the answer to how the United States facing the end of World War II and the formation of a new global landscape, selected its national strategy and handled its internal and external strategic relations. More than half a century has passed, and the United States has made much headway in its national strategies, but the strategy based on this report remains one of the most important national strategies affecting the development of the country. In this sense, strategy is the science and art of changing or maintaining the status quo.

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The Outline of the Cultural Development Plan During the Period of the Eleventh Five-year Plan (2006) and the Plan on Reinvigoration of the Cultural Industry (2009) issued by China are characterized by the strategic features of their respective period. They cannot be used to guide the long-term development of our cultural strategy, as they fail to accurately identify cultural strategic relations in domestic and international situations. The choice of direction for China’s cultural strategic forces and the enhancement of our capability of cultural development are seriously limited by a lack of understanding of the position of cultural development strategy in the overall strategy for the future development of our country. To overcome this predicament, we must formulate our strategy for cultural development, expatiate the fundamental contradiction and principal contradiction in the current cultural development, and clarify the fundamental strategic goal and choice of system. A strategy is a long-term fundamental proposition of interests, and a plan is the form in which the strategy is put into practice and the text organized to explain it. Since any strategy is based on the purpose of maintaining or changing the status quo, it will inevitably change or reorganize the original cultural order of society, thereby building a new and reasonable one. A cultural development plan should accurately represent such a reasonable cultural order. A cultural development strategy is to provide a basis of legitimacy and rationality for the establishment of such a cultural order, based on which a cultural development plan obtains its historical rationality. 2. The relations between China and the world in the development of its cultural strategy The relations between China and the world are the most important external relations in the development of China’s cultural strategy, which has shaped how the country perceives and thinks about the world. These relations have gone through roughly three stages since modern times. In the first stage, China (the Qing Dynasty government) suffered humiliating defeats at the hands of European countries during the two Opium Wars and thus established its relations with the world in modern times. As the imperial system of the Qing Dynasty was overthrown and the Republic of China established in its place after the Revolution of 1911, the Chinese nation tried to reconnect with the world in the Western way,

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and in this process strived to seize the initiative and restore dignity in its relations with Western powers. The victory of China’s War of Resistance Against Japan laid a strategic foundation for such Sino-foreign relations in this period. In the third stage, with the founding of the People’s Republic of China, the country embarked on the strategic process of comprehensively rebuilding its relations with the world. While paying a heavy price of trial and error, it began its strenuous efforts to reintegrate itself into the world trade system. This period is characterized by China’s accession to the WTO, signifying the rise of the country and the rejuvenation of Chinese culture. The legacy of cultural strategies formed in these three stages has contributed to the most important element of the relations between China and the world in the last hundred years, namely, the relation between China and the West. This relation also determines the basic position of Chinese cultural strategy in the international cultural strategic order. From this perspective, there are at least three main factors affecting the future development and elements of China’s cultural strategy: the European Union, East Asia, and the United States. Exhaustive research into the above three geopolitical tectonic plates and the influence of their cultural strategies on the development of China’s cultural strategy will provide a necessary frame of reference for the theory and framework of the future development of our cultural strategy. Although Central Asia does not and will not constitute a major factor in the international cultural geostrategy of China in the foreseeable future, it does not mean that it will not be in the far future. The international cultural geostrategy changes with changes in international geopolitics. For example, in the 1950s, the entire Soviet Union and many Eastern European countries were China’s key strategic partners in international cultural exchanges. Great changes had taken place, however, as the international geopolitical landscape shifted. However, it must be noted that the Shanghai Cooperation Organization (SCO) is vital to China’s geostrategic security and irreplaceable to the country’s political security in the western region. The western region is an essential part of the long-term development of China’s cultural strategy, as it directly concerns the strategic depth of our national cultural security. In terms of the international strategy for developing Chinese culture and its industries, we can consider forming a new worldview and, in this process, seek strategic initiative to explore opportunities for partnership while expanding our relations with the world. As practiced by the United States, there is nothing that cannot be an element

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of national security strategy: What is the world’s is America’s. Such a strategic thinking and view can be directly adopted by China in building its relations with the world in a much broader system. In other words, we must transcend ourselves in strategic thinking. China’s cultural strategy was put forward to achieve the strategic goal of the rise of the country and the rejuvenation of the Chinese nation. However, different the formulation may be, there is one fact that cannot be avoided: Like it or not, China is a major country and a significant component of the global power structure. Any development and change in China will bring changes to the world. This is true culturally, as it is politically and economically. As a result, any development strategy of China in any field is bound to conflict with that of other strategic forces in the power structure of the world, leading to an inevitable strategic rivalry. The United States remains one of the major players in the main battlefield of postwar international strategic contests. It is still the unavoidable strategic competitor of China in terms of cultural development today. In fact, whether in the process of or after China’s accession to the WTO, the United States has always been the main culprit in containing the modern development of Chinese culture by means of strategic coercion. The relation between China and the United States is the most important one among all its relations with the world in the strategic development of its culture. Today’s Sino-American cultural relations are a product of the Cold War era. The two countries share many strategic commonalities and depend on each other both politically and economically. Nonetheless, there are fundamental differences in their basic cultural ideas, cultural thoughts, values, and lifestyles as a result of two disparate sets of ideologies, making conflicts irreconcilable in a range of cultural strategic areas. As long as both sides abide by the values they believe in, the cultural strategic relation between them will remain a “life-and-death battle” focusing on national security, especially national cultural security. Strategic mutual distrust will dominate the strategic competition between China and the United States and the pattern of international strategic competition for a long time. In this process, culture and its industries are one of the main strategic tools used by both sides at all times. However, the United States possesses an absolute strategic advantage in the total amount of cultural development. For strategic reasons, if China wants to gain a comparative advantage over the United States in a relatively short period of time, it must seek to do this in several fields rather than on the whole. To achieve this, we must

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innovate comprehensively in theories, policies, and institutional arrangements. Most importantly, the essential attribute of cultural development in China’s overall strategic development must be clearly defined. The point is to provide a theoretical basis for the formulation of cultural policies and overcome the serious contradictions and conflicts between market economy-oriented development and cultural value-orientated development, a severe drawback to the current cultural development of China. We must ensure that our culture in the market economy is distinctly Chinese from the perspective of the core value of strategy. Otherwise, the tension between the excellence of our core socialist values and the belief that it is impossible to realize such values will impose long-term constraints on the healthy development of the culture and cultural strategy of China. We might even pay a dear price for it. In addition, this is precisely where most of the tensions between the development of China’s cultural strategy and its relations with the world are found. Therefore, to develop its cultural strategy, China has to properly handle its cultural strategic relation with the United States, which will be a test of wisdom for the country in its choice of cultural strategy. There is of course a question of standpoint here from which we understand and view the cultural strategic relation between the two countries. The relations between China and the world began with the accession of the country to the WTO. Before that, such relations in China’s cultural strategy were deconstructive to some extent, which was consistent with its strategic goals at that time. Having endured the strategic experiment of the Cultural Revolution, China adjusted its strategic goals. As the country carried out reform and opened to the outside world, rebuilding its relations with the world became the focus in developing its strategy and naturally of the development of its cultural strategy. China’s accession to the WTO was a watershed in the history of the country’s relations with the world both economically and culturally, with one of the most significant changes being the restructuring of global strategic power and order. The WTO is a world system built according to the Western understanding of the economic, trade, and cultural relations of the world. All of its institutional provisions are at the same time cultural principles that govern how people interact, with distinctive characteristics of cultural construction. China must adhere to the development principles of its own cultural strategy in such a system, which has resulted in inherent conflicts between the two cultures. Despite a divergence of social systems, value systems, and lifestyles, the common problems encountered

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by the entire human society have brought China and the West together in terms of many strategic interests. Faced with the existing differences in advantage between the two worlds, China must surmount all barriers to gain a comparative strategic advantage in a number of areas of cultural development. Concepts such as the Group of Seven (G-7), the Group of Twenty (G-20), and Chimerica, a term coined by noted British historian Niall Ferguson emphasizing the symbiosis between China and the United States reflect general changes in the existing international order and, more importantly, indicate major shifts in the global power structure. Such changes are marked by the rise of emerging countries, notably China. The strategic adjustment of the global economic structure after the financial crisis (2007–2008) enabled China to have a say in the reconstruction of the international financial order. Since economic advantages in any sense can translate into cultural advantages, China is facing a rare strategic opportunity to transform its advantages in the financial sector into an international advantage for the strategic development of its culture. The weight carried by the words of a country in the cultural realm is determined by its agenda-setting capability in international cultural affairs, not by its cultural GDP. Whether and to what extent a country can dominate agenda setting in the international cultural strategic order is a key measure of its relations with the world in its cultural strategy. 3. The strategic orientation of China’s cultural industry As the product of China’s cultural policy and strategic innovation, the development of the cultural industry is the most important form of the country’s current cultural strategy and a major strategic idea. There were cultural industries in the planned economy era in China. Such Chinesestyle cultural industries, however, were a tool of class struggle in the field of ideology to a large extent. Although there was a cultural market in this process, it did not play a fundamental role in allocating resources for the cultural industry. As specific cultural industry organizations, cultural enterprises were not regarded as market entities but merely as another manifestation of public cultural undertakings. In other words, cultural enterprises were being managed as public institutions, an epitome of the Chinese-style cultural industry. As a result of a unitary structure of investment and market entities, the cultural industry played a subsidiary role

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in the overall cultural development of the country as well as its economic and social development. Such a form of cultural industry reflects the social and cultural relations of China at a time when the government incorporated the production, circulation, and distribution of all cultural products into the planned economy. Eventually, the cultural industry was pushed into a period of prolonged stagnation, with its vitality stifled as a cultural strategic force of the nation. With the goal of restructuring the socialist market economy proposed, the strategic choice of joining the WTO made, and an innovative system for economic and social development established, it is necessary to build and innovate a Marxist system in which the superstructure adapts to the economic base. This has led to the shift of China’s national cultural strategy. At the Sixteenth National Congress of the CPC, the political proposition of “developing cultural undertakings and industry” was put forward in the Party’s political report for the first time and equated with the building of an ideology based on Marxism. The vigorous development of the cultural industry was also regarded as an important way to meet people’s diverse demands for spiritual and cultural consumption. The Party has thus clearly proposed a third way to build a socialist culture with Chinese characteristics, in addition to unswervingly adhering to the guiding role of Marxism in ideology and promoting the public-interest development of culture. A strategic framework of cultural construction and development with unique Chinese characteristics took shape, combining these three approaches. Since then, the cultural industry has been written into the Party’s political resolutions, national strategic plans, and government work reports as the most important system in the building of socialist culture with Chinese characteristics. The country is opening further to the outside world; citizens are exercising their various civic rights; nonpublic capital enters the cultural industry; cultural restructuring is being carried out in an all-around way. All this signifies a new era of development for China’s cultural industry, an era in which citizens’ cultural rights and interests are fully protected and exercised. In this process, all cultural relations between people and society, the relation between culture and economic development, and that between people and political democracy have been completely adjusted thanks to the cultural industry. It has become a link between people and society and a keyword in the rebuilding of all cultural relations between the two, a symbol of China’s cultural reform and opening-up to the world, and a barometer of cultural democratization and openness.

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Whether it is in China or some developed countries, there are at least two key factors why the cultural industry can be taken seriously, supported by government policies, and even become an important part of national development strategy. First, as a new way to create wealth, the cultural industry has altered the original path to economic and social development that relies on resource depletion and environmental pollution; as a new productive force, it has changed the original structure of social productive forces, transforming the knowledge-driven economy into a cultural economy and thereby making itself a key industry in modern countries. Second, the cultural industry creates wealth in the process of spiritual consumption, altering not only the way in which wealth is created but also people’s spiritual production and consumption—including spiritual expression and communication—and the spatial structure of people’s inner world in modern society. As a result, it possesses a profound and intangible power that is missing in any material creation to deconstruct and construct the space of the modern mind. It is this power that has transformed the original pattern of cultural and spiritual space between countries and shaped the future development of people, countries, and societies as well as the establishment of order. The cultural industry is an industry with both economic and cultural attributes and empowered with spiritual and material strength, making it an important choice for modern countries in readjusting national industries and restructuring their industrial landscape at the turn of the century. In the process, international politics, economy, culture, and their interrelations are being rapidly restructured. Such terms as cultural hegemonism and national cultural security have made it mainstream, as they profoundly reflect cultural inequality in this process and reveal that the clash of civilizations beyond cultural exchange and blending of civilizations threatens the survival and development of the culture of a country and nation. Market access and anti-access in the cultural industry have become a major area of international cultural competition and cultural strategic contests and thereby occupies a new place in the diplomatic arena. It is also in this process that the cultural industry acquires strategic significance with its importance and value in the life of the whole nation being highlighted. Although the expression in policies and strategies varies from country to country on this issue due to their different styles of political decision-making, there is no developed country that does not regard the modern cultural industry as part of its national strategy. A country without a well-developed cultural industry has no voice in the

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modern system of international relations. This is how the cultural industry becomes a critical component of a country’s cultural system and national strategy. The cultural industry is defined by the primary function of its cultural products. Since the beginning of human production, only two kinds of life necessities have been produced: actual food to meet people’s basic physiological needs and spiritual food to meet our basic psychological needs. All other goods are derivatives of these two basic necessities. The cultural industry is a system of the production and service of spiritual food. Therefore, the production of cultural products aimed at satisfying people’s demand for spiritual consumption is its primary and core function. All means of production that serve this main function constitute its auxiliary system. A complete modern cultural industry system is an organic combination of these two systems. However, the nature of the cultural industry is determined not by its auxiliary function but by its primary function. Such is the strategic orientation of China’s cultural industry. This is in line with the country’s policy of always giving top priority to social benefits. Based on this orientation, there is no need for China to develop a cultural industry with strong financial assets and virtual assets, a great influence on the economic cycle, or negative interference in macroeconomic regulation. In other words, there is no need to foster the financial attributes of the cultural industry. The healthy development of the cultural industry should be dominated by the production of cultural and spiritual consumer goods rather than investment goods. Cultural restructuring should not aim at building listed companies. The country does need a large group of strategic investors in its cultural industry, but such strategic cultural investors should first possess a capacity for cultural reproduction. We refer not to a cultural reproduction capacity in the general sense but to a key strategic capability to change or even rebuild the social spiritual and cultural order. Such a capability should be a universal pursuit and institutional design in the process of cultivating strategic investors in the cultural industry. We should keep in mind that China’s cultural industry would be ruined if we allow people to invest in it as they do in real estate. The cultural industry must adhere to its cultural strategic bottom line, which is to produce cultural products and provide cultural consumer goods to society to meet people’s demand for spiritual and cultural consumption and promote the progress of society and the advancement of human civilization. We should therefore establish the basic strategic principle that the development of China’s cultural industry should focus

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on the production of cultural consumer goods and set the direction and choose a path for development accordingly. As the cultural industry is able to affect the existing cultural order and shape our inner world, the maturity of its modern development, its position in, the role it plays in, and its impact on a country’s national economic and social development directly constitute the key elements of a country’s cultural spirit and cultural image. The modern development of the cultural industry, therefore, will be strategically significant and valuable. Developing, controlling, and monopolizing such strategic resources has become an important part of international strategic competition. As the market economy matures, China is facing a major clash between cultural value and market value, with the market becoming the only measure of value for cultural development. It is up to the market to define what should be developed and what works well. However, there are many other criteria for the true, good, and beautiful in people’s social lives. To some extent, the market is only associated with capital, with the growth of profits and wealth, not with truth, goodness, or beauty. Worst still, capital can do whatever it takes to make a profit, including destroying the true, the good, and the beautiful. The development of the economic sector should not be solely market-oriented, let alone the cultural industry that is defined by its cultural functions. Market performance is needed as a barometer of the development of the cultural industry but never as the only bellwether. In addition to generating economic wealth for society, the cultural industry must also create valuable spiritual and cultural assets for the progress of civilization and the all-around development of people. Hence, we should give full play to the leading role of the market in resource allocation and, more importantly, to the values of the true, the good, and the beautiful in guiding the reproduction of cultural resources. Only under the guidance of such universal values can cultural industry development achieve the strategic goal of pushing human civilization forward and empowering people to reach their full potential in all respects. The development of the cultural industry follows two basic paths: one is unbalanced development with a one-sided focus on economic factors, and the other is comprehensive and balanced development that emphasizes social benefits. The former is guided solely by market performance and measured only by its contribution to the GDP of a country. It regards the cultural industry as part of the economy and integrates it into economic strategies, which means that all strategies for cultural

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industry development should be formulated based on economic indicators. In contrast, the second path is oriented toward multiple values and measured by the overall development of civilization. The cultural industry is considered a vehicle for cultural development and is thus incorporated into cultural strategies. In addition to following the rules of the market economy to satisfy people’s diverse demands for spiritual and cultural consumption, the cultural industry should strive to fulfill its value goals and improve the quality of such consumption. It is obviously necessary that we pivot from the first model, in which various public cultural resources and production factors are concentrated for the purpose of cultural industrialization, to the second model, where such resources and factors are optimally allocated between cultural, social, and economic development. Overall, the development of cultural industries should be guided by the spirit of Chinese culture and the goal of promoting the progress of civilization. In other words, we should advocate a sustainable method of development that is environmentally friendly, resource economical, and conducive to the harmonious coexistence of nature and mankind. Major changes have taken place in the external environment of China’s economic development since the outbreak of the international financial crisis in 2008. The advanced economies led by the United States were demanding a rebalancing of the world economy; they began to increase exports and implement reindustrialization, posing a direct challenge to China’s export-oriented development strategy. At the same time, the 2008 international financial crisis triggered a general readjustment of global relations of production and trade and other economic and financial relations, resulting in a recalibration of China’s relations with the world. This led to changes in a series of development strategies concerning the domestic industrial structure, investment and consumption, the regional economic structure, and other elements. The rearrangement and integration of social resources, production factors, and essential public services became an inevitable national strategic issue. The cultural industry was given the mission of rising against the trend in this process and positioned as a strategic industry thanks to the Plan on Reinvigoration of the Cultural Industry. However, some fundamental tensions remain in its medium- and long-term development. In particular, China had been practicing unbalanced development of the cultural industry with a focus on cultural restructuring in the ten years since its accession to the WTO. While making great achievements, such a strategy has given rise to many

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tensions, including a series of external tensions such as those between cultural industry development and the development of culture, ideology, politics, economy, and society, as well as structural and systemic tensions within the cultural industry itself. New problems arise before the old ones are solved. After a decade of tremendous growth, China’s cultural industry has reached a historical turning point where its healthy development depends on the country making efforts to explore and defuse these tensions. This is the precondition for a sound cultural strategy. 4. Capacity building in China’s cultural strategy Resources and social factors are restructuring the future of countries on a global scale, turning the competition between nations into a contest based on community capacity rather than just a trial of national strength. In the era of globalization, only by enhancing the capacity for social and cultural innovation of its people can a country achieve sustainable development of its strength. With capacity building and capacity containment becoming another focus area of the international competition of cultural strategies, the logical structure of world hegemony is changing, and the strategy of great powers seeking supremacy is also taking new forms. The community capacity of a country is mainly manifested in its ability to achieve cultural progress, the overall quality of its people, social cohesion and the ability to organize and mobilize people, the level of social institutionalization, and its social order. In addition, all this hinges on the country’s overall cultural creativity, an ability to constantly transcend its own cultural limitations. In enhancing its cultural soft power, China must avoid the unrealistic pursuit of quick results and stop paying excessive attention to its external image. Instead, the country should shift its strategic focus to improving cultural creativity and promoting overall cultural progress. Only through a great increase in its community capacity can a country enhance its cultural strength and build a national image in a strategic way. The ability to construct a discourse is one of the most important cultural strategic capabilities of a country and largely affects the cultural status of the country in the world and its cultural relations with other countries. Discourse anxiety is one of the strategic anxieties facing China in its cultural development. The problem lies not in its inability to construct a discourse and command the power of discourse but in

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the mechanism of discursive construction: Who should construct the discourse? Who has the right? In fact, there are currently three kinds of discourse in China, namely, official discourse, academic discourse, and popular discourse. There are no effective communication mechanisms and sharing platforms between these three discourses. In many cases, the three even clash with each other. A nationwide mechanism is thus needed. To be more specific, we should respect social discourse power by encouraging the public to participate in agenda setting and disseminate the achievements of domestic scholars by means of public policy and by virtue of the country’s resource advantage, thereby establishing real national discourse authority. The key to enhancing the discourse power of a country is to inspire to the maximum extent the academic creativity of every scholar engaged in humanities and social sciences research and the initiative of citizens to participate in discourse construction. By constantly promoting the academic achievements of its individuals through the cultural policy machine, the country is also building a national image and thereby its power of discourse. After all, the degree to which scholars in ideological and theoretical circles express themselves is a key measure of the discourse power of a country in the international community. Ordinary people have the power to change the world. As an important way for modern countries to nurture cultural strategic power, great efforts are being made to establish nongovernmental think tanks and cultivate the social soil for the growth of discourse by creating a favorable system and environment. The United States, for example, has a large number of think tanks of various types, as well as foundations established by consortiums that support the development of these think tanks. This is the American version of a nationwide system. In contrast, China has yet to build such a force of think tanks with a broad base of public support. To develop its cultural strategic power, the country has to gather sufficient strength in the cultural sector by building an understanding of and trust and confidence in the basic national consciousness of the people. As has been fully demonstrated in the national spirit shown by many people during the Beijing Olympic Torch Relay, the voices of the public can often play a role that the government cannot. It is therefore necessary to actively and steadily develop nongovernmental think tanks for cultural strategic research in formulating China’s cultural strategy so that Chinese values can be based on the will of its people. We should build a system of core socialist values on the basis of popular will, hence the need to set up nongovernmental think tanks that help

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drive the development of our cultural strategy. A relatively complete foundation system has yet to take shape in today’s China. As a result, the vast majority of research projects and funding in universities and research institutes come from party and government departments. It is difficult to carry out effective independent research and generate new and original findings, as the research topics are often specified by such departments. The state has invested a lot of manpower, material resources, and funds, but with meager success. This is a major reason why for many years, China has rarely formed an effective voice in the field of international cultural strategy. The country is often left at the mercy of others, especially in terms of its cultural administrative system and policy innovation. To seize the initiative and join the system of others in exchange for the integrity of our own system, we must first create a mechanism that fosters capacity growth and helps us achieve this goal. The key to such a “system exchange” is to earn our voice in the international arena. Such a right of discourse is the core of the cultural strength of a nation, which can only be formed with a proper mechanism. In this sense, the future development of China’s cultural strategy also requires system and mechanism innovation. To this end, it is particularly necessary that we liberate our minds on this issue. We must have enough trust in our people and our intellectuals. This is also an important way of showing confidence in the Chinese cultural strategy. Creativity is the most important of all the endowment of factors for a country to sharpen its competitive edge. It is the most crucial strategic resource that lies at the very core of the overall cultural strength and cultural industry development of the country. It will be of critical importance for any country at any level of development between now and 2050. This is because the entire human race is faced with the same challenge: How do we sustain the development of human society once we use up all nonrenewable natural resources? The most essential characteristic of the winners who have survived a crisis is their ability to innovate and create. The rewards of innovation and creativity will be increasingly concentrated in the hands of a few people due to dramatic increases in labor productivity and continued globalization. Fifty years ago, for example, the source of income earned by the greatest performing artists was limited to the audience they actually reached. However, world-class singers have found countless revenue streams, such as the distribution of music in CDs, MP3s, and other formats around the world. The improved creativity and innovation capacity will further widen the income gap between the rich

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and the poor within the country. There are various types of creation and innovation, among which cultural creation and innovation are undoubtedly the most influential and enduring. Scientific creation and innovation will lead directly to changes in the physical world, while cultural creation and innovation will simultaneously reshape our physical and inner worlds. Like it or not, the departure of an entertainer, a pianist, or a cultural entrepreneur can have a huge impact on a country’s ability to shape its own image. Balancing the country’s ability to attract such cultural talent with its social cohesion will be a great challenge for China in the future development of its cultural industry and a strategic issue that cannot be avoided in its cultural development. 5. Core values in China’s cultural strategy Since China began to rebuild its cultural development mechanism, it has been an almost dominant policy and public opinion to put an end to the traditional government-led model and gradually shift to market-led development guided by the government. This suggestion has some merit in a purely economic sense. However, from the perspective of cultural construction and cultural development, it is somewhat one-sided. The government and the market are two completely different mechanisms of social existence and social development. Market development is not dictated by the government, while the development of culture requires a clear value orientation. This is determined by the self-selection mechanism of the development of human civilization, without which human beings would not be able to exist and develop today. Therefore, the extent to which we can constantly update the development goals of human society and calibrate our choices in development cannot be decided in an anarchist way. Such a great historical task has been undertaken by the government as a social mechanism generated when human society reached a certain stage of development. The will of the government has been one of the most fundamental social forces propelling the evolution of human society over thousands of years. It is this will that guide the way forward for human society. Even a development model such as the market economy is a result of government choice despite its history of natural generation. In the broadest cultural sense, the market is shaped by the government. Without the will of the government and the resulting government dominance, cultural development could not have lasted for

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an era or even a period of time. Thus, there is a direct cause-and-effect relationship between the will of the government of a certain era and the characteristics of cultural development of the same era. As Marx said, generally speaking, the class that rules over the means of material production also rules over the means of spiritual production. The thought of the ruling class is generally the ruling thought of this era. It is therefore unrealistic to transform radically from a government-led model to a market-led one from a strategic point of view, even in the United States, which is known today as the country with the most liberalized market economy. American values and the American way of life have always been one of the core contents of The National Security Strategy of the United States of America. The American government has never given up its leading role in the development of culture and its industries; the only difference is that they have adopted an American style of government dominance. Only when the government leads can a country and nation achieve sustainable cultural development. The development model of China’s cultural strategy in the future should give priority to the sustainable development of culture rather than unlimited economic growth. We should not limit cultural development to inputs and outputs in the general economic sense. Instead, inputs and outputs should be given new meanings and values. The economic efficiency and economic goals of cultural development will serve the purpose of the betterment of mankind only when they are combined with the accumulation of cultural resources and an organic cultural ecosystem. This is because renewable cultural resources and an organic cultural ecosystem are the necessary conditions for the survival of mankind. Hence, the cultural industry should be a machine that regenerates cultural resources instead of consuming them and a productive force of cultural development. The cultural industry is an important carrier and a necessary mechanism of the sustainable development of culture in human society. The uncontrolled expansion of the cultural industry will seriously endanger the sustainable development of culture if we focus only on the unrestricted growth of economic value and economic benefits without considering the accumulation and growth of cultural resources. This is done at the expense of cultural diversity, which is essential for the sustainable development of culture. Therefore, we must prioritize culture and maintain a strategic balance between the sustainable development of culture and economic growth in the cultural industry; we must orient the cultural industry toward sustainability and

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strike a cultural strategic balance between social and political stability and economic growth. All this can only be done with government leadership. As a result of an underdeveloped judicial system, China has been constantly challenged by the legal system of the United States in the process of developing its cultural strategy. The conflict between Google and the Chinese government, for example, was essentially a contest of core values on national cultural administration. Google attempted to challenge not only the general form and content of cultural censorship but also the fundamental cultural value system of a country on which cultural censorship is based, which is the bottom line of the country’s cultural administration. It seeks a complete reversal of all forms of cultural censorship that conflict with its quest to build the largest commercial empire possible. Google knows that it can never completely monopolize the international search engine market as long as there is cultural censorship in a country. Complete monopoly and ownership can only be achieved through complete subversion. Therefore, to safeguard its fundamental cultural sovereignty, China must proceed from the establishment of core values in its cultural strategy rather than thinking only about national cultural security. The maintenance of national cultural security depends not on institutional arrangements made in response to external threats but on the active design and preventive planning in developing the national cultural strategy. Any cultural system is designed and arranged based on people’s evaluation of their state of cultural security under certain historical conditions. Such a system should combine passive defense and resistance with active design and offense, as defense alone cannot lead to positive and creative cultural strategic management. The trail of strength in building a sound national system focuses on interests. It is impossible to safeguard the core interests of a country without creating an effective system. In this sense, systems are about interests. Therefore, the system should be innovated according to major changes in the overall cultural environment to not only satisfy the fundamental national interests of China but also adapt to the changed international circumstances. We should take the initiative in developing our cultural strategy and avoid being subject to control by others in contending for the power to shape our own system. Early warnings should be given of possible challenges and competition so that the possible strategic losses can be minimized. Instead of trading interests, we should “trade” systems, or, in other words, become part of an international system in exchange for the integrity of our own system.

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For example, China enjoys the most-favored-nation (MFN) treatment through its accession to the WTO rather than accepting the exchange of interests proposed by the U.S. Congress. A strategy is an understanding and embodiment of the system and an expression of whether to maintain or change the current system under certain institutional conditions. In 2010, Google asked the Chinese government to lift its Internet censorship of the search engine. A hearing was subsequently held by the U.S. Congress on March 24 of the same year to examine China’s Internet regulations in light of the Google incident and whether foreign companies have the freedom to express their opinions under these regulations. It was clearly an attempt by the United States to interfere with China’ judicial independence by means of American laws. However, at the same time, we could not help but notice that the difficulties facing cultural development caused by an imperfect legal system have formed a major institutional obstacle to the healthy development of Chinese culture and its development according to law. Therefore, in developing China’s cultural strategy, efforts should be made to establish and improve a legal system in the cultural industry so that it operates properly within the framework of a constitutional system of government. It is necessary that we think beyond the conventional way about the ideological regulation of culture, particularly to ensure the scientific formulation and effective implementation of China’s cultural strategy. Through the formulation of national laws in a series of core areas of cultural strategy, such as publishing, news, film, television, and the Internet, we shall free ourselves from past ideas that have obviously failed to meet the needs of modern China to develop its cultural industry and build a national system. We should venture beyond self-imposed limits in cultural censorship and ideological regulation and demonstrate the maturity of the ruling party with full cultural confidence. The relations between China and the United States and between China and Europe will remain the most important international relations for China in building its system for the foreseeable future. The two are also China’s major opponents in seizing the initiative to build our own national cultural system. There is also competition between the system of Europe and that of the United States but it is a contest not at the strategic level but at the tactical level, as the two share basically the same set of fundamental values. Unlike them, China pursues a different social system and a different national ideology. Although we believe in treating every country equally regardless of their social system and national ideology,

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this does not change the fact that differences in these two aspects are still the root cause of international conflicts today. The idea of the “clash of civilizations” proposed by Professor Samuel P. Huntington could not have put it more precisely. While upholding our values and way of life, we should find a way to rise above the clash of civilizations and seek common ground with Europe and the United States over our values. This is a strategic choice for China to innovate its cultural industry system. We should make the system itself a favorable productive force so that the development of our cultural strategy will always be supported by a healthy growth mechanism of cultural productive forces rather than relying on temporary and unusual means and policy measures. Reform should not be regarded as a normal mechanism as that would lead to a constant state of uncertainty for the development of our cultural strategy, leaving people in restless anticipation, wondering when the next shoe will fall. This is neither helpful to the effective control of strategic management costs nor conducive to the stable and sustainable development of strategies. Therefore, for a major country such as China, a timetable should be set for reform. Even if it takes a long time, we cannot afford to leave things to the indefinite future or slip into an endless cycle of reform. We should constantly enshrine into law the fruits of reform, making them a permanent part of the system. Any result of reform that cannot be institutionalized in the form of law should be reviewed for rationality and legitimacy. To put an end to the awkward situation where China is governed by an incomplete cultural law, we should establish a cultural law system so that the acts of people, government administration, cultural development, and social progress are kept within the law. It is therefore necessary that China proceed from the perspective of long-term development and conduct comprehensive theoretical construction and studies of its basic cultural development strategy. This is the theoretical basis and guiding thought of the country’s cultural industry system.

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The Strategic Restructuring and System Innovation of the Cultural Industry

1. The cultural industry is a system reflecting all cultural relations The cultural industry is a form of organization and existence of the structure of modern society. With its own content and in its own way, it integrates and reflects the changes of social composition in the cultural realm and the distribution of rights and interests behind such

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changes. It is this distribution of rights and interests that lays the foundation of political economy for the formation and change of the cultural industry structure. Therefore, the structure of the cultural industry is not a simple combination of several cultural industries but a system that mirrors and combines all existing cultural relations. It is a reflection of the marketization of cultural commodities at a certain level of productivity and under certain institutional conditions and people’s varying demands for cultural consumption in this context, as well as the differences in social identity, access to cultural rights, and cultural relations behind such varying demands. There is a structural correspondence between the form of cultural industry and the consumption behavior of cultural consumers, which in turn reflects the economic and cultural relations between different consumers as well as the social relations based on such economic and cultural relations. Hence, the cultural industry structure is an extension of human social relations. Since the government has the power to allocate social resources, the structure of the cultural industry, as a result of the historical distribution of resources, is a product of the institutional arrangements made by the authorities in the past. Therefore, the cultural industry structure is not a general industrial structure but one with the significance of political economics and institutional economics. This is why the strategic restructuring of the cultural industry is of particular significance in the strategic restructuring and system reform of the economy of contemporary China. The structure of the cultural industry system in contemporary China has evolved from the cultural administration mode of government in the planned economy. In fact, the cultural industry has been divided into performance, cultural entertainment, journalism and publishing, radio, film and television, and other industries by the Chinese government according to the different ways of expressing cultural ideology in industrial forms. Such a division is distinctly Chinese, as it reflects the division of authority over the cultural administration of our government in the industry. Although not entirely without its theoretical basis in industrial economics, this way of industry classification differs greatly from what is specified in the General Agreement on Trade in Services (GATS) and the North American Industry Classification System (NAICS) (1998) issued by the United States. Admittedly, the standard of industry classification of the cultural industry varies from country to country. However, it is rarely seen in the international community that different cultural industries are overseen by separate government agencies, as is the case in China.

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Therefore, the structure of China’s cultural industry shares some of the characteristics of the country’s cultural administrative system, which is essentially the distribution of power reflected in the allocation of cultural industry resources based on the need for ideological management. In fact, the strategic adjustment of the cultural industry structure is above all an adjustment of the structure of cultural rights. The government has the authority to distribute the cultural resources of a society, which is at the same time an adjustment and reorganization of the original structure of cultural rights. The history of the formation of China’s cultural industry structure cannot be understood outside the entire national system as it is this system that has shaped the cultural industry. An accurate understanding is possible only through a historical analysis of the structural dependence of the cultural industry on system and administration. Hence, the strategic adjustment of the cultural industry structure in China inevitably involves cultural restructuring and cultural administrative restructuring, which is necessary for successful cultural restructuring, as well as the shift of cultural power and the resulting redistribution of cultural interests. Only through such adjustments can we surmount industry barriers caused by the administrative barriers between departments and regions and achieve the transfer of the fruits and costs of reform brought about by strategic adjustment of the economic structure in the cultural industry. Only in this way can we fundamentally overcome the structural imbalance between cultural restructuring and economic restructuring and between the strategic adjustment of the economic structure and that of the cultural industry structure, thereby achieving overall coordinated development after China’s accession to the WTO. Such a rearrangement of cultural power liberates cultural productive forces from the perspective of institutional economics. In doing so, we can surmount the barriers between departments and regions and industry barriers that have long been troubling the development of China’s cultural industry. Ultimately, we will truly loosen regulation and relax restrictions on market access, which is the greatest institutional challenge to the strategic adjustment of the cultural industry structure. The dispute over broadband access between the former State Administration of Press, Publication, Radio, Film, and Television and China Telecom, as well as the dispute over cable merger between CITIC Guoan and Hunan TV and Broadcast Intermediary, is essentially a power struggle between the two sides in the cultural industry. The adjustment of the institutional structure has therefore become a hurdle that must be cleared in the strategic adjustment of

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the cultural industry structure. Otherwise, we could neither build an institutional support system to fulfill China’s WTO commitments nor achieve the goal of joining the WTO. Not to mention the adjustment of other aspects of the cultural industry structure. 2. The system is a basic decisive factor in long-term economic performance The choice of path in institutional innovation is of particular significance, as different institutional arrangements will produce varying economic realities, including economic performance. In addition, any choice of system is made after weighing the total costs and benefits and tends to substitute a system with relatively higher returns for the old one to obtain the maximum net benefit. The path selection of system innovation is aimed at directly or indirectly boosting the performance growth of the economic system. The low level of supply and demand and the structural asymmetries in China’s cultural industry, as well as the large number of industrial organizations with a low degree of concentration, are the result of the high costs and poor benefits of system operation caused by a lack of innovation. Therefore, in the context of the overall economic transformation, the strategic restructuring of the cultural industry must overcome its path dependence on the original system. It is no longer a viable option to simply rely on the merger of organizations in the general sense, such as the so-called confluence of film and television, the consolidation of two institutions into one (Shanghai Municipal Administration of Culture, Radio, Film, and Television was established to replace Shanghai Municipal Administration of Culture and Shanghai Municipal Administration of Radio, film and Television, for instance), and resource integration and reorganization. Instead, we should proceed from the perspective of building a national innovation system and a national cultural industry innovation system and choose a new path in terms of the direction and orientation of cultural restructuring against the background of China’s accession to the WTO. We should seek to minimize the loss of performance and reconstruct the system of China’s cultural industry by selecting an approach conducive to creating a sound market system and a mechanism of fair competition and building more effective cultural and economic organizations. Only in this way can the strategic adjustment of the cultural

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industry structure adapt to the transfer of costs and achievements brought about by the strategic adjustment of the economic structure, effectively promote cultural restructuring, and form a positive correlation with the economic performance of the cultural industry. Thus, the space for the development of the cultural industry can be expanded through system innovation. A coupling effect will then be created between the strategic restructuring of the cultural industry and that of the economy, stimulating effective social demand for cultural products and cultural services. The great achievements of economic restructuring will be translated into a powerful driving force behind the development of cultural industries and the growth of economic performance. In doing so, we can bridge the gap between economic restructuring and cultural restructuring and eliminate the diminishing marginal returns that may be caused by the transfer of reform costs. The strategic restructuring of the cultural industry on the system level inevitably involves the adjustment of its ownership structure, which, as a result of the long-standing emphasis on the ideological function of culture, has been characterized by a state monopoly. This has changed since the reform and opening-up but has not been fundamentally and effectively resolved. To overcome the structural tensions and institutional obstacles in economic development is to make the cultural industry an important part of the contemporary Chinese economy and an integral part of the entire industrial structure of China. By vigorously developing the cultural industry, its proportion in the overall economic structure should be increased to drive the transformation of the traditional industrial structure, which covers machine manufacturing, information, and services in general. Furthermore, the overall demand of the cultural industry for its related industries should be utilized to transform traditional cultural industries and change the flow and structure of human resources, capital, and technology. It is therefore necessary that we reform and innovate systems that are incompatible with the above goals and eliminate the institutional barriers to economic and cultural restructuring. 3. The strategic restructuring of the cultural industry should focus on the structural adjustment of cultural productive forces Productive forces are a decisive factor affecting the development of the cultural industry. Structural adjustment to the system is aimed at liberating the productive forces of the cultural industry, but it is no substitute for the structural adjustment of cultural productive forces themselves. The

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former serves only to eliminate institutional obstacles to cultural industry development, whereas structural tensions can only be effectively solved through structural adjustment to cultural productive forces and the optimization and upgrading of the industrial structure. System innovation will not naturally lead to an increase in cultural industry performance. In fact, effective system innovation can bring about growth in performance only when it runs parallel with the innovation of the structure of cultural productive forces and only when there is no significant change in technology and other key elements of resources. Here, science and technology, as a key element, is of special significance to the rapid growth of the cultural industry. China’s cultural industry was born in the planned economy. The initial choice of system led to the path dependence of cultural industry development, which means culture was regarded only as an ideological tool rather than a productive force that can create huge wealth. Consequently, China lags seriously behind the international community in terms of the division of industrial forms and investment in industrial development. The cultural industry is a product of the development of modern technology, the fruit of the marriage between high technology and a rich cultural heritage. However, as a result of long-term path dependence, China’s cultural industry is structured unreasonably with prominent structural tensions, as traditional cultural industries occupy a disproportionately large share. According to incomplete statistics, by the end of 1999, there were 330,700 cultural industry organizations and 174,700 cultural and entertainment organizations under the Ministry of Culture, with 903,000 employees; Other cultural organizations numbered 97,000, employing 230,000 people. In comparison, the country has only more than 500 publishing houses, 2,038 newspapers, 8,187 periodicals, and over 3,000 radio and television stations. Such a structure of cultural productive forces was adapted to the need for developing cultural undertakings in the original system and the cultural consumption demand of the people at that time. However, today, China has begun to comprehensively promote the development of the socialist market economy. The cultural industry has become a new way to create wealth as well as a leading industry for some Western developed countries to expand foreign trade and a pillar industry for social development. At the same time, human society has entered the “second media age”, where information technology and the Internet are being widely used to develop and disseminate cultural products. The digital trend is rapidly reshaping the existing forms of cultural

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industry with digital television, digital films, digital entertainment, digital publishing, etc., changing people’s habits and ways of cultural consumption. The original boundaries of the cultural industry dissolve as the Internet brings the cultures of the world together. However, due to structural tensions, there is a large gap between the development of China’s cultural industry and the reform of the market economic system. Worse still, it stands in sharp opposition to the optimization and upgrading of the international cultural industry. To build international competitive strength, we must fundamentally restructure cultural productive forces and strategically adjust the cultural industry structure through extensive optimization and upgrading. 4. The structural tensions restricting the development of China’s cultural industry should be fundamentally resolved by targeting the system In the strategic adjustment of the economic structure, the cultural industry assumes the responsibility of solving the structural tensions restricting economic development. Meanwhile, it bears the transferred costs in deepening reform and enjoys the amplified outcomes of reform. In other words, we can regard the strategic adjustment of the economic structure as an inevitable manifestation and a way to fully implement the development requirement of advanced productive forces in the contemporary economic life of China. Therefore, the cultural industry, as the product of the combination of high technology and a rich cultural heritage, should take the initiative to meet the development requirement of advanced productive forces through the platform of modern high technology while overcoming its own structural tensions. In particular, through its combination with the information industry, the cultural industry should be digitalized to fully and strategically adjust the structure of its productive forces. Based on this, we should continue to implement the national strategy for developing the cultural industry. In other words, the fundamental way to address the structural tensions that restrict the development of China’s cultural industry is to combine the structural adjustment of the system with that of productive forces. China has successively set up organizations of various cultural industries since its reform and opening-up. However, such organizations remain in form and within the existing system. There is essentially no

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strategic adjustment made to the system structure. In other words, it is still an internal cycle within a system that has not been innovated through the adjustment of its components. As a consequence, it is not only difficult for the cultural industry to accept the transfer of reform costs brought about by the strategic adjustment of the economic structure but also impossible for its productive forces to be liberated as expected. The establishment of cultural industry organizations will not be conducive to system innovation without structural adjustment to the system on the strategic level, a coupling effect between such strategic adjustment and that of the economic structure, or the liberation of cultural productive forces through such adjustment. As a result, the institutional barrier will remain, frustrating the hope of achieving the expected outcomes of reform and its multiplier effect. Not only are the existing barriers between departments and regions and industry barriers left unaddressed, they have been reinforced by the emergence of new interest groups. The tensions between some cultural industry groups and companies and the cultural administrative authorities of the government are a typical manifestation. Today, the category of the information industry proposed in the NAICS of the United States has pushed the boundary of the cultural industry in the traditional sense, with a special emphasis on the integration of cultural industries and the information platform. This integration will bring revolutionary changes to the structure of cultural productive forces, which will fundamentally alter the form and structure of traditional cultural industries. A profound reflection of this trend is the fact that some global cultural industry groups are seeking to transform from the advantage of scale to that of scope. People are already seeing that the strength of cultural industry groups is not necessarily reflected in number and scale but in their advantages in content and promotion within the scope of relevant industries. Therefore, the fight among countries for advantages in digital technology will become the focus of the development of the cultural industry and the strategic adjustment of its structure. All these profound changes indicate the arrival of a new era of unprecedented expansion of cultural industry productivity. Facing such an irreversible global trend, only by renewing the content of the liberation of productive forces can China’s cultural industry achieve strategic structural adjustment and assume a major responsibility in the strategic adjustment of the economic structure. The strategic restructuring of China’s cultural industry is of international significance, as it has been taking place against the backdrop of

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the country’s accession to the WTO. For a long time, China’s cultural industry was alienated from the modern world market system. Weak as it was, it became a major force in the balance of the world cultural order and cultural pattern during the Cold War. As China opened its cultural market to the outside world according to the timetable promised by the Chinese government when joining the WTO, its cultural market has been integrated into the world’s and become an important part of it. International cultural industry groups have entered China and participated in the marketization and modernization of its cultural industry. They have brought capital and technology that help transform China’s cultural industry, speeding up the process of modernizing its structural adjustment and relieving huge financial pressure. Moreover, they have affected every aspect of the Chinese cultural industry from ideas to systems by reshaping its structure and making it a part of international competition. The cultural industry is considered an important component of modern national interests and a main variable and force in the balance of interests between countries. Therefore, access and anti-access to the cultural industry and cultural market have become a focus for countries in vying for cultural interests as well as a decisive factor in the development of the global cultural order and the reshuffling of international cultural forces. To reestablish its position as a major player in the international cultural market after joining the WTO, China must incorporate the strategic structural adjustment of its cultural industry into that of the world. Since the 1990s, the United States and the European Union have basically lifted the barriers between the communication, media, and information industries and completed the first revolution in which the media helped to achieve decompartimentalization among sectors, eliminating the structural tensions restricting the development of cultural industries. Currently, the second round of strategic adjustment and reorganization of the cultural industry structure is underway, specifically targeting the content industry. Since cultural industries are facing a full-scale challenge from information technology, we might also speed up our response to the process of digitization and break the traditional way of labor division in the cultural industry. This has naturally become a strategic choice for many countries, especially those in the West, that are striving for a leading position in international cultural competition. It is a way to fundamentally readjust the global distribution of cultural industries, especially the media industry, thereby obtaining greater benefits. Therefore, China

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should not only focus on the domestic market in strategically restructuring its cultural industry but also take into consideration changes in the international cultural industry structure. As it is impossible to transcend oneself without a grand vision, the strategic adjustment of our cultural industry structure should be placed in the context of economic globalization. Without such a dimension as the international market and the trend of globalization, such adjustment may be devoid of strategic significance. Hence, diverse choices of path and multiple system changes are necessary. 5. The access of nonpublic capital to the cultural industry: Strategic arrangements for the innovation of the cultural system and policy The Decisions of the State Council on the Entry of Non-Public Capital into the Cultural Industry (the Decisions), a high-profile document issued in 2005, has answered two questions concerning the structural problem that has long plagued the development of China’s cultural industry from the perspective of strategic intention and strategic arrangement: How can China enhance its overall national strength and core competitive strength, and who should take on such a task? There is a complex interaction between the public sector and the nonpublic sector. In a study on cultural industry development and national cultural security in 2000, I proposed establishing China’s national cultural security system by utilizing the power of the public. To improve the comprehensive strength of our cultural industry, a national cultural and economic community should be built, combining the power of the state and that of the private sector. In other words, we should rely mainly on state-owned capital while fully mobilizing nonpublic capital to develop the cultural industry. The above document was issued precisely for the purpose of mobilizing all positive factors and progressive forces in society and, through the liberation of cultural productive forces, achieving the strategic goal of national cultural development. Wherever foreign investment is allowed in after China joined the WTO, domestic investment should also have access to. The Chinese government should grant universal treatment to all investors while easing access to its domestic market. To put in another way, domestic capital should enjoy the same opportunities and rights as foreign capital in terms of access to the cultural industry. In fact, the purpose of the questions put forward in the

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Decisions, as well as the Decisions themselves, was to correct the differential treatment of nonpublic capital and foreign capital in the previous stage. China’s accession to the WTO happened before the country was ready in many aspects, including culture. As a result, its cultural industry and cultural market face the challenge of globalization. On the issue of culture, the Chinese government should of course give full consideration to its national cultural security. The entry of foreign capital into the cultural industry is in accordance with China’s commitment to the WTO, which also serves as its legal basis for opening to the outside world. Such openness works both ways and has changed from bilateral to multilateral and from policy-based to system-based. The Chinese government must therefore open wider to the outside world in the cultural field as well as the economic sphere after joining the WTO. In addition to allowing foreign cultural capital into its cultural market, the country should also relax control over access to the domestic cultural market to provide a level playing field for all. In this way, both state-owned and nonpublic forces in China will be able to engage in state-permitted cultural industry operations on a shared public platform. In fact, the introduction of the decisions was also a major system design and arrangement. It was a key step away from a unitary cultural system dominated solely by public capital toward a new system where the public sector plays a major role and various forms of ownership participate. The decisions were connected to the continuous broadening of market access in the reform of the cultural market and the cultural system and the ongoing gradual reform in local areas. The introduction of this document was not a sudden whim but a way to institutionalize the results of cultural restructuring and the reform of the cultural access system previously initiated at the local and industrial levels. What used to be a special arrangement for a certain region or industry has now become a universal institutional arrangement for the whole country. The understanding of ideological construction, for example, is more in line with the changing reality. Today, ideological production, transmission, and acceptance have all undergone changes. Ideological transmission, in particular, is now taking place virtually (on the Internet) and remotely (via satellite transmission) rather than through just two-dimensional paper media. Moreover, the construction of ideology is moving toward democratization, with netizens influencing the media. Any individual may communicate shocking views on the Internet and be widely accepted by the audience. In this

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process, nonpublic capital has become a major disseminator of great ideological power. Through system innovation and system design, such forces and the strength of the whole nation can be fully mobilized to serve the strategic goal of the country and to ultimately achieve the rejuvenation of Chinese culture. Any system design contains two aspects. In addition to opening-up to the outside world, it should also take into consideration the cultural sovereignty and security of a country. There are four different policyoriented expressions in the Decisions: encourage, allow, restrict, and prohibit, which stipulate the significance of different fields to national cultural security from the perspective of system design. Such a stipulation can be adopted by any country, although the specific circumstances may vary. The film rating system in the United States, for instance, is designed based on American values. It is also based on this consideration that the Chinese government has designed and arranged the system in accordance with China’s national conditions in the areas where nonpublic capital is allowed to enter to establish an orderly market access system. The promulgation of the Decisions marks a new stage in the openingup and development of socialist culture in China. As nonpublic capital enters the cultural industry in accordance with system arrangements, the cultural industry will gradually overcome the imbalance of power and stimulate new and creative competitive forces. Such forces are essential to the enhancement of a country’s overall cultural strength and competitive strength. However, we must also pay attention to whether such strategic arrangements and ideas can be put into practice. The participation of nonpublic capital inevitably leads to strategic changes in the original pattern of cultural interests. What kind of attitude should be taken toward the strategic arrangements and ideas of the country is a question worthy of deep thought for state-owned cultural investors considering the protection of various vested interests. Interests are often placed above everything else. Any threat to vested interests will be met with instinctive resistance. We should therefore cultivate a new view of interests amidst such a strategic change, as it is of particular significance to state-owned capital in developing new cultural industries.

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3 Cultural Restructuring---The Way Out for the Development of China’s Cultural Industry Cultural restructuring is a new reform of the national system that differs from economic restructuring. It focuses on straightening out the relationship between cultural undertakings and cultural industries, transforming the cultural administrative function of the government, and establishing a new national cultural administrative system. The key is to change the way the Party manages ideology and radically improve its capability of cultural governance. The difficulty of cultural restructuring is determined by its depth and breadth. Due to the special role long played by culture in the political and social life of the Chinese people and their unique interpretation of culture, the first obstacle to cultural restructuring is the limitations on its purpose and the choice of path: What is the reason for cultural restructuring? What is the nature of it? What needs to be restructured? What kind of a cultural system are we aiming for? The theoretical dilemma of whether to choose capitalism or socialism that we have encountered in the process of restructuring the economic system and developing a socialist market economy was still surmountable. Cultural restructuring, however, involves the entire superstructure of China and the rebuilding of the country’s cultural system. The resulting tensions and obstacles will be much more complex and challenging than those encountered in economic restructuring. Unfortunately, our existing theoretical preparation is not enough to provide comprehensive intellectual support for such a complicated and daunting task. This calls for some serious research and reflection. 1. Theoretical innovations are needed to provide a basis of legitimacy for cultural restructuring and a rational basis for its policy decisions The cultural system is an institutional reflection of the relationship between culture, politics, and economy in a country, which embodies the theoretical proposition of a country’s administrative ruler on the relationship between these three, as well as the national cultural system and policy system established based on this proposition. To seek innovation in the theory of cultural restructuring, a new understanding and a new theoretical system of the relationship between culture, politics, and the economy must first be established.

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Culture reflects politics and economy and at the same time reacts upon them. This is a classic interpretation of the relationship between the three and remains a point of departure for understanding this relationship. However, this statement regards culture as a form of ideology and does not touch upon issues related to either cultural undertakings and cultural industries or the system and mechanism of culture. China’s ongoing cultural restructuring reaches far beyond the theoretical scope of culture as a form of ideology. Hence, there is a lack of theoretical support and guidance for our contemporary grasp of the relationship between culture, politics, and economy. Cultural restructuring also faces pressing problems in terms of theoretical guidance as a result. The current round of cultural restructuring in China covers various aspects, such as cultural production, cultural circulation, cultural organization, cultural structure, cultural distribution, and cultural rights. It draws a distinction between cultural undertakings and cultural industries while making adjustments to the original pattern of cultural interests. Apart from removing the institutional obstacles formed in the planned economy, it also aims to restructure the original pattern of the cultural economy. The proposition to develop cultural undertakings for public interests and cultural industries for commercial interests has provided a new standard policy framework for the form of cultural society based on the overall strategic thinking of China’s cultural construction and development. In addition to a formal deconstruction of the original relationship between culture, politics, and economy, this standard involves the judgment and adjustment of the extensive social functions of culture. To some extent, cultural undertakings for public interests and cultural industries for commercial interests correspond to for-profit and nonprofit organizations, respectively, with market orientation as the value standard of this division. Meanwhile, the cultural system itself is an institutional embodiment of the government’s will of cultural administration that involves the political structure of the allocation of social and cultural resources. Therefore, the division of cultural development into undertakings and industries signifies a major institutional shift in the country’s will and policy of cultural administration. What lies behind this is the transfer of the original cultural power of the country and the exertion of citizens’ cultural rights, making it possible for various social forces to engage more in sociocultural affairs. Culture has thus been diversified and brought back to its original state to a large extent on a higher level. In other words, culture gained the same status as politics and the economy. It can be

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argued that this is only the first level, namely, the political level, of division in China’s cultural restructuring. On such a basis, the second division of cultural operations will involve aspects of cultural economic policies and laws such as market access and national treatment, as well as the standard of industry classification of the cultural industry and market norms. The general application of the classic principle may no longer suffice to explain the cultural changes that are taking place. Culture is an important factor of the overall national strength of a country and a key component of the social structure. It is a form of spiritual civilization of a society that is as important as politics and material and hence a driving force behind social progress. Creativity defines culture. Cultural creativity is the source of human progress. Without culture, there would be no political and economic development of human society. As UNESCO pointed out in the Action Plan on Cultural Policies for Development, development can ultimately be defined in terms of culture, with the flourishing of culture as the highest goal. Therefore, cultural restructuring is a major social reform that concerns the development of the whole society. In such a new general context of social and national development, we must establish a new understanding of the relationship between culture, politics, and economy, as well as a new theory based on this understanding, to guide, plan, and advance cultural restructuring in China. Only in this way can we base cultural restructuring on new rationality and, with this as a new starting point, formulate and implement the strategy for cultural development. To seek a major theoretical breakthrough in cultural restructuring, a new theory of socialist cultural construction and cultural administration must be established to provide a basis of legitimacy for the innovation of the national cultural system. The theory of class struggle in ideology was the principal theory guiding China’s cultural administration for a prolonged period of time. The design of the main tasks and functions of national cultural administration, to a large extent, is built on this theoretical basis. However, the theory on cultural administration can be included in but not replaced by ideological theory. Similarly, we cannot substitute cultural administration for ideological management. Our theory on cultural administration must be innovated across the board, whether it is the form of cultural construction or the way of cultural development, whether it is public cultural administration or cultural industry management. We must establish a scientific boundary between the purpose of national cultural administration, the cultural administrative function of

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the government, public cultural administration, and cultural industry management and make theoretical breakthroughs in fundamental theoretical issues such as the path of cultural construction and cultural development. Otherwise, we will not be able to provide a new basis of legitimacy for the comprehensive cultural restructuring and system innovation of China, let alone achieve the desired result. The theoretical achievements of reform in China are based mainly on the practical experience of its economic restructuring, which is limited. As a result, such a theory is not universally applicable. The individual experience of economic restructuring cannot be used as a ready-made general truth in cultural restructuring. Nor should cultural systems and mechanisms that apply only to the social systems and cultural backgrounds of other countries be taken as universal standards and applied to China’s cultural restructuring. There are several issues to consider. For example, the rate of return on investment is a fundamental factor in investment theory; when engaging in cultural undertakings for public interests, should we consider the rate of return on investment? If not, how can we guarantee the interests of investors? If so, cultural undertakings may be the same as cultural industries that seek commercial interests, which is inconsistent with the goal of cultural restructuring at the current stage and the division of cultural development into cultural undertakings and cultural industries. The theory on the diversification of investment entities proves obviously insufficient to address all the challenges to the clarity of property rights in cultural restructuring. Similarly, the theory of corporate governance in the modern corporate system is not necessarily applicable to cultural restructuring. At the present stage, China will continue to run profit-making public institutions by means of corporate management. In such a system, how can we achieve the effective management of property relations that separates the right to manage from the right to administer according to the theoretical requirements of the modern corporate system on the corporate governance structure? Meanwhile, how can we ascertain the nature of ownership on the part of cultural undertakings based on the theory of ownership? All these problems indicate that the existing experience and conclusions are not enough to provide the necessary basis of self-introspection and support of rationality for the reform and innovation of China’s cultural system. In particular, there were more lessons of failure from the early stage of cultural restructuring than successful experience, which is further compounded by a serious regional imbalance in cultural development. Under these circumstances, we must base

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the current round of cultural restructuring on the actual development needs of cultural undertakings and cultural industries. While keeping our cultural development in line with the general trend of the world, we must pay special attention to and study the new institutional obstacles and structural tensions that could be caused by cultural restructuring and plan accordingly in advance. This is because the cultural system in China is not just about culture itself but involves a series of issues, including political restructuring and economic restructuring, as well as the strategic adjustment of the cultural power structure and the redistribution of cultural power. The tensions and conflicts caused by the state’s return of cultural power to its people can be quite complicated. The purpose of cultural restructuring is to liberate cultural productive forces to the maximum extent, minimize the cultural differences between urban and rural areas, and bridge the gap in cultural development between the east and the west. It should create new conditions for eliminating cultural poverty in western China, rather than aggravate it. However, there was no evaluation of the cultural development and capacity for reform of economically underdeveloped regions in the comprehensive pilot projects of cultural restructuring. In this case, if we advance full-scale cultural restructuring, the regional imbalance in cultural development might be further exacerbated, leading to severe cultural instability and social instability. The scramble for limited cultural resources, especially policy resources and market resources, is likely to trigger a new round of local protectionism and vicious competition for sectoral interests. An obvious example is that the cultural restructuring programs and measures formulated by institutions that were not part of the comprehensive pilot projects have gone beyond the scope of some of the ideas of the central government. State-owned cultural industry groups established in the process of cultural restructuring are placed at the same administrative level as the cultural administrative departments of local governments. As a result, there are essentially two cultural power centers in one place, which means that the cultural administrative departments of local governments exert no authority over state-owned cultural industry groups. One important reason is that in terms of our theories on ideological management and cultural administration, we have not fundamentally and scientifically completed the shift in the role of the government from an operator of culture to an administrator of culture. Therefore, cultural restructuring should not be bound by the general experience and choice

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of the path of economic restructuring. Instead, we should take the initiative to explore theories and policies that not only accord with how cultural restructuring works but also reflect the characteristics of China’s cultural system. Reform in the cultural industry should be more than pure economic ideas and methods and overcome the binary opposition between cultural administration and ideological management. In other words, we should avoid separating cultural restructuring and the shift in the way the Party manages ideology in governing the country and setting the two against each other. We should establish theories that take into account the intrinsic attributes of cultural changes in the socialist market economy with Chinese characteristics. Cultural restructuring cannot be equated with economic restructuring, nor should we apply the theories and experiences of the latter to the former. In particular, we must guard against the endless cycle of reform in which the results of one round of reform become the object of the next. It is necessary that we understand the differences in cultural development between the east, west, south, and north in the market economy, the laws of historical development and current development, and the historical orientation of Chinese culture in the context of globalization. Bearing these facts in mind, we should focus on coordinating cultural development in the eastern and western regions as well as in both rural and urban areas in the current round of cultural restructuring and continue to close the obvious gap between them. China’s cultural system has accumulated deep-seated problems over the long course of history. Some of them are due to the institutional bias based on leftist theories and policies, while others are a result of the inevitable demand for self-improvement made by the system itself at a certain stage of development and the institutional forces that are incompatible with this demand. Not all problems are caused by political leanings. It is important to recognize that history itself is limited. Even the reforms that we consider to be very successful today will have limitations when viewed from the perspective of historical development. Limitations are also part of the laws of historical development and will not reveal themselves until the contradictions of things have fully unfolded. Blindly attributing everything to left-leaning political views could easily lead us to new extremes when choosing new innovations in the system and theories. We must put the analysis of China’s current round of cultural restructuring in the context of the development of the system and realize that the difficulties encountered in the process are caused by the limitations of the system itself, which indicates the need for us to keep up with the

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times in our understanding of the system. Only in this way can we make a more rational judgment when choosing a new path of cultural restructuring and overcome all kinds of path dependence. We must first address the path dependence in way of thinking and the theoretical model of cultural creators before building new theoretical and institutional systems, just as structural tensions can only be effectively overcome if institutional obstacles are removed. Only with theoretical innovation in the cultural system is it possible to build a new national cultural industry structure and cultural power pattern while establishing a new cultural system. This leads to a series of questions: What should be reformed in cultural restructuring, and how should it be? What functions of the government need to be transformed? What new changes will arise in the relationship between the transformation of government functions and the structural reform of the cultural system? What will the cultural system be like after the transformation of government functions? Cultural restructuring has prompted the government to change its role from an operator of culture to an administrator of culture. Will the new system in which the government regulates culture to face the problem of system reform? Is market orientation the only orientation in cultural restructuring? Is it the economic system or the cultural system that cultural restructuring is trying to transform? To what extent can the cultural industry remain public after the reform? What will the cultural responsibility of the government be after cultural restructuring? Can cultural restructuring based on the current line of thinking fundamentally resolve the structural tensions and institutional obstacles in China’s cultural development and construction? Cultural restructuring involves not only the shift of the role of the government but also the reform of the way the government regulates culture, including systems such as cultural censorship, market access, and industry management, as well as the transition to public cultural administration. Regarding the actual effect of China’s existing cultural administrative system and its structure, the reform of the national cultural administrative system is the most critical. Without removing the huge institutional obstacles to the maximum liberation of cultural productive forces, the current round of cultural restructuring will remain cosmetic, with one likely result being that the cultural functions originally undertaken by the government will be transferred to the market, thus weaking or eliminating the public nature of the government. Moreover, since such a cosmetic reform does not touch the system of cultural administration, the original system functions will continue to operate, undoing the existing fruits of reform.

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Theoretical innovation in the cultural system, the legal system concerning culture, and cultural policies is therefore particularly significant. The cultural system of a country is related to its legal system and cultural administrative system. At present, an incomplete cultural legal system and arbitrary policymaking are major factors contributing to the defects of our cultural system. Whether a cultural legal system can be built based on the cultural administrative system of our country determines whether cultural productive forces can be liberated to the greatest extent in the restructured cultural system. Our scientific and democratic cultural legislation and cultural decision-making depend directly on the establishment of scientific and standardized cultural judicial procedures. Cultural restructuring is a comprehensive reform involving the interests of all sides of politics, economy, and society. Internally, it sets out to reshape the pattern of cultural interests and adjust various relations based on cultural interests. Externally, it involves the fulfillment of the commitments made by China on opening its cultural market in joining the WTO and the establishment of a new foreign-related cultural system and mechanism. To safeguard China’s cultural sovereignty, a new national cultural security system needs to be built in the process of restructuring the cultural system. A complete cultural legal system and a sound cultural legal mechanism are essential prerequisites for the establishment of a scientific national cultural security system. Transforming the government’s cultural administrative function is not only a focus in China’s cultural restructuring but also an important institutional reform to rebuild the cultural legal system, achieve law-based cultural governance of the country, and establish a new national cultural security system. Regarding national cultural security and the rebuilding of the country’s cultural system, it should not lose its legal legitimacy. Our immediate concern is that the absence of theories on cultural legislation and cultural policies will be a direct cause of the absence of national legislature in cultural restructuring. How the national legislature plays its role as an organ of state power in cultural restructuring and perfects the legal procedures in the process has thus become an issue that cannot be ignored. The absence of the national legislature will pose a direct threat to the full legitimacy of the achievements of cultural restructuring. Therefore, the solutions to a series of legal problems involved in cultural restructuring and the establishment of a cultural system must be provided based on the theory of law in the cultural field. Without a great improvement in the basic theories on the cultural legal system and cultural policies,

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it would be difficult for us to choose the macro strategy for cultural construction, effectively redesign the cultural system such as to achieve cross-regional, cross-industry, and cross-media operation, and truly overcome local protectionism and industry barriers. With the expiration of the term of protection after China’s accession to the WTO, the market entities operating across regions, industries, and media are more likely to be supported by foreign capital or other social capital. However, the control over market access has made it difficult for such other social capital to enjoy equal national treatment. As a result of institutional obstacles, cultural restructuring will fail to live up to expectations. Our development models are determined by institutions, which depend on the system, and the system is based on theories. An advanced culture needs to be promoted and protected by a legal system. Only on the basis of a solid legal system can all the achievements of reform become a strong driving force for cultural development. Therefore, whether an effective system of legal protection and support, as well as all the necessary cultural legal procedures and mechanisms, can be created for cultural restructuring not only determines to some extent the full legitimacy of the reform itself but, more importantly, has a direct bearing on its overall success. To this end, we need to straighten out our line of thoughts, theories, and paths of building the system, thereby establishing persuasive theoretical principles and theoretical systems. On this basis, we will create a scientific and sound system of policies and institutions according to which the overall plan of cultural restructuring will be formulated. Otherwise, cultural restructuring would be deprived of not only attainable deep-reaching goals but also its significance as a force to liberate and innovate. In particular, in regard to provisions concerning the changes of major reform policies, we should not only adhere to principles on fundamental issues but also stay in line with reality and keep pace with the times. Both clear guidance and standardization of important concepts are necessary to avoid deviations in practice due to a vague understanding of policies and defects in the legal system. The legitimacy of the legal system of a country lies in its sound legal procedures, the absence of which will threaten the legitimacy of any system. The governing party should translate its will into the will of the state through judicial procedures. This is the only way to ensure that the whole society can be established on a serious legal basis and that the achievements of reform are effectively protected by law.

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2. A shift in the way the Party manages ideology in governing the country is necessary so that a political framework can be created for comprehensively promoting the development of a national cultural system That ideology is managed by the Party is a fundamental principle in China’s cultural system that must be upheld over the long term. The question is how, what kind of ideology, and which ideologies the Party should manage in the socialist market economy with changing circumstances. Ideological management in the past focused on class struggles in the field of ideology. Today, of course, there are still ideological issues and, to some extent, class struggles in the realm of ideology, but they are certainly not the dominant aspect of ideological management today. Under the circumstances of the socialist market economy, great changes have taken place not only in the content structure of ideology itself but also in the conditions for its generation as well as the environment, means, mechanism, and material expression of its dissemination. What is the relation between the Party’s ideological management and the development of cultural industries and cultural undertakings now that the cultural industry has become a major form of ideology and a medium of its dissemination? What is the relation between the Party’s ideological management and the development of thoughts and theories? What is the relation between the Party’s ideological management and the safeguarding of citizens’ cultural rights? The answers to these major theoretical questions remain unclear. We must unswervingly adhere to the guiding role of Marxism in the field of ideology. However, with dramatic changes in ideology, we are likely to face difficulties in cultural restructuring if we fail to advance with the times on such fundamental theoretical issues and develop a theory on national cultural administration with Chinese characteristics that sticks to the role of the Party in managing ideology. Only by clarifying the nature of the ongoing cultural restructuring in our country can we clarify its purpose and thereby eliminate the institutional obstacles and structural tensions in cultural development as expected. Shifting the way that the Party manages ideology in exercising state power is a decision made necessary by the change of the historical position of the Party, which was explicitly summarized in the Sixteenth National Congress of the CPC: “Our Party has evolved from a party that led the people in fighting for state power to a party that has led the people in

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exercising the power and has long remained in power. It has developed from a party that led national reconstruction under external blockade and a planned economy to a party that is leading national development while the country is opening to the outside world and developing a socialist market economy”. The former points out the transformation of the historical role of the Party, while the latter indicates the change of content of the Party’s governance of the country as it shoulders different historical tasks under the new historical circumstances. It is this change of the content of governance that reveals on a deeper level the specificity of the turn of the Party’s historical position. Such specificity is determined by the demands of the new age and is historically inevitable. Hence, the party in power must adopt a new philosophy and style of governance in accordance with the law of governance. The decision to shift the way ideology is managed by the Party in governing the country is but a response in the field of ideology to the change of the historical position of the Party and an inherent requirement of CPC’s law of governance, rather than an external force imposed on the Party. In China, the CPC is the governing party, and the government is its legitimate governing body that epitomizes institutions and systems. The Party communicates its will directly through government actions, thus realizing the absolute rule over culture. Both the cultural system of the country and that of the government are an embodiment of the understanding, requirements, and ideals of the culture of the CPC. Cultural governance by the government, whether through the management or regulation of culture, reflects the Party’s way of governing. In essence, to transform government functions in cultural restructuring means that the CPC should shift the way it manages ideology and the system and mechanism of its cultural governance based on changing circumstances at home and abroad. Based on the new and advanced socialist culture, the Party should rebuild the institutional form and system in which it manages ideology. In other words, through cultural restructuring, we should separate the functions of the Party from those of the government, government administration from enterprise management, and government regulation from management. The government should shift from micromanagement to macromanagement of culture, which is to allocate social cultural resources in a new way in the socialist market economy, rather than to shift the cultural administrative function of the government directly to the Party. On such a basis, the Party will achieve its will and purpose and improve its capability and efficiency in managing ideology.

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We must strategically transition from an approach in which the Party fully controls ideology to one in which the Party focuses on the construction of mainstream ideology. Through the creative development of the theory on mainstream ideology, it can then influence public opinion and shape the cultural image of the country. Without a shift of focus to the construction and innovation of mainstream ideology, it would be difficult for the Party to break away from the mode and line of thinking formed during the period of class struggle and the institutional dependence arising from it in its ideological management. Innovation in the choice of reform path is even less likely. Therefore, an important question in cultural restructuring is how we can straighten out the working relation between the Party and the government in the realm of culture. In the fields of ideology and culture, the Party should concentrate on the theoretical construction and innovation of mainstream ideology, and through it drives cultural innovation, guide system innovation, and perfect the art of governance. The management of specific cultural matters should be left to the government. Through government administration by law, the public cultural administrative system of the country is established. The Party, on the other hand, manages guidelines and policies and translates its cultural will into government actions through legal procedures. In this process, the Party should be fully equipped with cultural theoretical knowledge to provide a basis of rationality and legitimacy for the country’s guidelines and policies on cultural development and management. Only in this way can the principle that ideology is managed by the Party be effectively implemented in the cultural system of China while giving the government sufficient space to exercise law-based administration. Hence, the extent to which policies and the system can be innovated in this round of cultural restructuring depends directly on whether a new understanding of the philosophy of ideological management can be established. We must make sure that cultural restructuring is not subject to the “Huang Zongxi law”, which, according to the scholar and reformer of the early Qing Dynasty, refers to the tendency in which throughout the course of Chinese history, whenever tax reform was introduced, a brief decrease in the tax burden on farmers would be followed by a steep increase, often reaching rates even higher than before the reform. In other words, we should prevent the achievements of this round of reform from being reversed in the next. The choice and formation of the way of governing are determined by the specific task, goal, guiding thought, and environment of governance over a certain period of time. As we have accomplished the task and goal

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of a given period, leading to drastic changes in the environment, and set new tasks and goals, the style of governance must then adapt to such new tasks and goals. Therefore, shifting the way the Party manages ideology in exercising state power does not run counter to the Party’s goal of governance but accords with the need to transform and improve itself in advancing its cause of governance. Changing the way of governing when it is no longer conducive to enhancing the Party’s governing capability is of strategic significance, as it concerns whether the new goal and task of governance can be achieved and whether a new growth mechanism can be created for the Party’s position of power after its historical position has been redetermined. Ideology and ideological management are a dynamic system of processes. The social existence of people determines their social consciousness, which reacts upon existence, thus driving the continuous progress of human society. When our social existence has undergone fundamental changes that have profoundly reshaped our consciousness, whether the management of ideology meets its need for development is no longer a question of ideology per se. Due to the reaction of consciousness to existence, the theoretical construction of ideology plays a direct guiding role in social development. Ideology becomes an obstacle to social development when ideological management fails to create a new institutional environment for ideological revolutions and ideological creations fail to provide new spiritual guidance and theories of ideal models for the developing existence. Therefore, a shift in the way the Party manages ideology, in its ultimate sense, is a major matter that bears on whether the Party can remain in power in the long term. 3. Relations of cultural production that are ill adapted to the need to develop cultural productive forces should be transformed and liberated The cultural system is an institutional manifestation of cultural production relations reflecting the relationship between society and the state, citizens, and government in the distribution of cultural interests and cultural rights. In the early days of the PRC, when our cultural productivity was still low, the government gave full play to the advantages of socialism in pooling resources to accomplish major undertakings and rapidly established new relations of cultural production. Such relations

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were consistent with the planned economic system in China and reflective of the relations of economic production in culture at that time. Meanwhile, it was through the establishment of such relations that the cultural productive forces of our society had been greatly liberated and made great headway within a short period of time. For quite some time, however, these relations of cultural production have been unable to keep pace with the development of advanced cultural productive forces. Cultural restructuring fell far behind economic restructuring, especially after the Fourteenth National Congress of the CPC, which set the goal of building a socialist market economic system. The market economy and the planned economy represent two vastly different relations of social production and two disparate ways of allocating resources. The planned economy emphasizes the leading role of the government in resource allocation, while the market economy highlights the basic role of the market in distributing resources. Such a difference in the dominant force in resource allocation between them reflects two different relations of social production based on the ownership of resources. Therefore, as China entered the stage of developing a socialist market economy in an all-around way, it was demanded that the relations of cultural production be rebuilt to adapt to advanced cultural productive forces. Such relations have become an institutional obstacle and structural tension that hinders the development of advanced cultural productive forces. Without innovating the existing relations of cultural production, namely, the cultural system, there is no way to boost the development of advanced cultural productive forces. Cultural restructuring has thus become the main aspect of the principal contradiction. Therefore, cultural restructuring means the reform of the backward relations of cultural production that are not compatible with the advanced cultural productive forces of society. It is to transform the cultural system, cultural institutions, and the power structure of the redistribution of cultural resources, which are manifestations of the relations of cultural production in modern China, that are out of keeping with the socialist market economy. An important goal of cultural restructuring is to rebuild the country’s cultural system and push its development in all aspects, thereby helping to build a harmonious society and effectively safeguarding the cultural rights of citizens. This is the goal set at the Sixteenth National Congress of the CPC, where a new round of cultural restructuring was launched as a major national cultural strategy. Based on this, we should understand the value of this round of cultural restructuring in terms of system innovation and establish our way of thinking.

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This is because the changes involved here are bound to touch the Party’s vested interests. In other words, we must return to the people the cultural rights and interests that are rightfully theirs. Due to historical reasons, the Party has long monopolized the power of cultural administration, albeit with some positive effect. However, it runs counter to the purpose of the CPC. Now is the time to restore history to its true colors, which is that it is made by the people. As Mao Zedong said, there has never been a culture of landlords, only of peasants. Even if there was a culture of landlords, it was created by farmers. The point of shifting the role of the government from an operator of culture to an administrator of culture is not to stop the government from running cultural programs. The government should of course continue to manage the cultural sector, particularly cultural undertakings for public interests and some profitmaking cultural industries that have a bearing on national cultural security. However, it should not monopolize the cultural sector, especially the market operation part of it, as it used to. Cultural industries should be run by nongovernmental forces, except for those that concern national cultural security (this is also an international practice). Cultural rights should be returned to society and citizens. There is certainly a question of equity and fairness here. Instead of giving priority to efficiency with due consideration to fairness, special attention should be given to upholding fairness. An important issue in safeguarding the legal cultural rights of the average citizen when many of them are not fully engaged is to prevent the emergence of new monopolies, especially oligopolies. We need to prevent the fruits of cultural restructuring from becoming “fast food” in a few people’s bowls, as is the case with economic restructuring. It is necessary to prevent a vacuum in the cultural rights of citizens in those areas from which the government has withdrawn. Otherwise, all initial reform efforts could come to naught. To this end, while advancing cultural restructuring, we need to put in place an early warning mechanism to monitor the process of reform and ensure that the fruits are shared by the greatest possible number of people. Therefore, to transform the relations of cultural production that are ill-adapted to the advanced cultural productive forces is to innovate the relationship between society and the state, citizens, and government in the distribution of cultural resources, cultural interests, and cultural rights. Through this, we can then liberate cultural productive forces to the maximum extent and minimize the gap between the development of cultural productive forces and the increasing intellectual and cultural needs of the people.

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A prominent and long-standing flaw in the leadership in our cultural system is that the functions of the Party, the government, and enterprises are not separated. Such a drawback reflects a significant deviation in our understanding and implementation of unified leadership by the Party. In view of this, Deng Xiaoping pointed out at the Central Work Conference before the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China that “strengthening the leadership of the Party has caused the Party to do everything and intervene in everything; implementing unified leadership by the Party has resulted in a lack of distinction between the functions of the Party and those of the government, and the former substituting for the latter”. This is a question of the way of governing the Party in power. Being in power does not mean that the Party should take over the affairs that fall within the administrative scope of the government. To address the overlapping functions of the Party, the government, and enterprises in the field of culture, it is necessary to radically reform party leadership and national leadership in the cultural system of our country. The purpose of this reform is not to deny the Party’s leadership over cultural undertakings but to change the way the Party manages ideology in governing the country. In the national leadership system for managing cultural undertakings, the power of cultural governance that has been long held by the Party due to a lack of understanding of the law of socialist cultural development should be given back to the government. Meanwhile, we should restore the power and position of enterprises as market entities, return the power of cultural administration that rightfully belongs to enterprises and the market, and give full play to the basic role of the market in allocating resources. Ultimately, we should rationalize the relationship between the Party, the government, and enterprises: The Party is in charge of guidelines and policies, translating its will through judicial procedures into government actions that convey its propositions and purposes; the government shall administer all cultural undertakings according to law, and enterprises shall operate within the limits permitted by laws and regulations. The purpose of cultural restructuring, therefore, is to fundamentally align the Party’s leadership over culture with the law of socialist cultural development in the market economy and strengthen the Party’s capability of cultural governance, rather than the opposite. It is wrong to assume that cultural restructuring could weaken the Party’s leadership over ideology. For a long time in history, we were primarily preoccupied with the ideological issues of culture that were mostly political. There are certain

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ideological issues in culture, but culture is not all about ideology. It is so much more than that. Nor is ideology just a political issue. However, it is precisely the ideological issues of culture that fettered the development of China’s cultural productive forces. In the discussion of cultural restructuring and the vigorous development of cultural undertakings and cultural industries, we have been almost unanimous in proposing a change of ideas, the essence of which is to liberate cultural productive forces. This is because we have all seen outdated ideas becoming a hindrance to the development of cultural undertakings and cultural industries in the socialist market economy, a force in the depths of our consciousness that has long plagued the development of our cultural undertakings. To some extent, it is such a force that has seriously curtailed cultural productive forces, resulting in the contradiction between backward cultural productive forces and the growing intellectual and cultural needs of the people who has remained unsolved for a long time. The change of ideas and ideological emancipation in the realm of culture will thus be conducive to liberating cultural productive forces, not of a particular unit or individual, but of the country, the whole nation, and all the people. Only when cultural productive forces are liberated and the cultural creativity of the people unleashed is it possible to imbue our cultural industry with vitality, thereby generating creative industries and developing the content industry. The content of culture is the product of human creation. Without the liberation of cultural productive forces, there would be no content, as people’s creativity could not be brought into full play. Without the provision of a large number of content products, there is no way to satisfy the ever-growing intellectual and cultural needs of the people. 4. We should ensure that citizens’ cultural rights are fully exercised and that the Party’s capability of cultural governance is kept in line with the pioneering role of the Party In the socialist market economy, new standards have been set for the Party’s governing capacity in leading cultural development and managing ideology. As stated at the Sixteenth National Congress of the CPC, the purpose of the Party is to exercise state power in the interest of the people. In the keynote speech marking the Ninetieth anniversary of the founding of the CPC on July 1, Hu Jintao further proposed that the Party should wield state power in the name of the people, care about the

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wellbeing of the people, and seek interests for the people. To exercise state power in the interest of the people is a requirement put forward not only for party building but also for cultural governance by the Party in the socialist market economy. For a long time in history, the Party’s cultural governance was adapted to the system of the planned economy both in terms of the theory and its capability of cultural governance. There is in particular a direct causal relationship between the global situation and the international status of our country and the establishment of our system of socialist planned economy. The formation of the Cold War pattern after World War II, for example, was a direct cause of our choice of cultural development path and cultural system in the early days of the founding of socialism. Therefore, the emphasis on class struggle in ideology and the choice of cultural policies and guidelines at that time were historically inevitable. As a result, the cultural governance capacity of the Party was mostly confined to the class struggle in the field of ideology. Meanwhile, it was such an overemphasis on class struggle in ideology that gave birth to the unitary cultural system of our country dominated by the state, which reflects a lack of variety in the Party’s capability of cultural governance. Despite its historical rationality, such a lack of variety has lost its basis of legitimacy with the establishment of a socialist market economic system. The economic base of the cultural system has been altered. As is determined by the fundamental relation between the economic base and the superstructure, the cultural system must be restructured in a way that is suited to the market economic system. China’s economic system is and will remain a system dominated by public ownership and supported by various forms of ownership, which will also characterize our cultural system. To support multiple forces in working together and running the cultural sector, the Party naturally faces a new requirement of historical and strategic significance, namely, it has to expand, diversify, and strengthen its capability of cultural governance to adapt it to the progressiveness of the Party. The important thought of Three Represents (that the CPC represents the development trends of advanced productive forces, the orientations of an advanced culture, and the fundamental interests of the overwhelming majority of the people of China) is a creative summary and manifestation of the progressiveness of the CPC. The development trends of advanced productive forces and the orientations of an advanced culture are reflected in the great historical demand that the fundamental interests of the overwhelming majority of the people of China must be safeguarded. Therefore, the key to enhancing

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the Party’s capability of cultural governance is to govern for the people by effectively protecting their cultural rights and interests. This should be an essential purpose of the current round of cultural restructuring. Market access is one of the signs of a country’s openness and can also be regarded as an indicator of the degree to which its citizens exercise their cultural rights. Under the current conditions in China, the implementation of market access in the cultural field means that the government will have to give back to society and citizens some of the cultural rights and interests that it has long possessed. Citizens will truly enjoy the right to run cultural industries and become the true master of the country’s culture. It is not only the government’s responsibility to build a socialist culture with Chinese characteristics and achieve the rejuvenation of Chinese culture; the task also falls on the shoulders of state-owned cultural enterprises, the Party’s departments of publicity and culture, and the individual citizen. Such a cultural responsibility should be an important part of the consciousness of every citizen. As the saying goes, everyone is responsible for the rise of fall of their country. In today’s China, we all have a share of responsibility for the flourishing and decay of culture. Only by internalizing this responsibility and stimulating the cultural impulse of every citizen can they connect their own cultural interests closely with those of the country and regard the cultural interests of the country as their own. The desire to defend national cultural interests will provide a huge impetus to all the cultural activities and behavior of citizens once they see that the loss of cultural interests of their country will directly threaten those of individuals. To some extent, the greater the cultural rights of citizens, the greater the responsibility. It is therefore necessary to let every citizen see that their cultural rights and interests are at stake in cultural restructuring. They should not regard cultural restructuring as merely a matter for the Party and the government or the publicity and cultural departments to worry about. The ongoing cultural restructuring is the largest shift of cultural rights and adjustment and redistribution of cultural interests since the founding of the PRC. At no time should the cultural rights and interests of citizens be ignored in the choice of path and system innovation of cultural restructuring. Under the new historical circumstances, it may be a strategic goal of this round of cultural restructuring to build a new cultural and economic pattern and a cultural system featuring a national cultural and economic community. This goal is consistent with the progressiveness and purpose of the Party and the overall objective of building a harmonious socialist society.

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Hence, the decision to enhance the Party’s ability to govern culturally is not the result of some external force but an inevitable outcome as the cultural thoughts and cultural governance capacity of the Party evolve over time. There is a positive correlation between the extent to which the country is open to the outside world and the Party’s ability to govern in modern China. This is because the more open the country is, the more complex and varied the environment and situations it is likely to face, and the more diversified the Party’s ability to take everything under control and handle complexity is required to be. Restructuring the unreasonable cultural system, achieving the historic shift in the government’s cultural functions, and building a new national cultural system have set higher demands on the Party’s capability of cultural governance. Strengthening such a capability will be a great test for the Party. To enable people from all levels of society to fully express and communicate their will through the political platform, we should encourage more orderly public participation in political affairs. It is conducive to forming the political idea of cooperation among all social strata and facilitating healthy and orderly political activities. To establish a universal faith in the Constitution and build the authority of the Constitution and laws among citizens, we must first put into practice the idea of popular sovereignty, effectively safeguard citizens’ cultural rights and interests, and guarantee their entitlement to the cultural rights and cultural freedom stipulated in the Constitution. A radical overhaul of the entire cultural system is the key to cultural restructuring. In other words, we must advance the reform of the country’s cultural system so that it adapts to the socialist market economic system. This involves not only the abstract relation between the economic base and the superstructure but, more importantly, the direct connection between a considerable part of a culture based on cultural industries and the economy on a practical level, or, to put in another way, that this part of culture is the economy in the form of culture. The majority of this part of culture has found their way of being and value through the market and has become an important source of growing wealth in modern society. Objectively speaking, to adapt cultural development to the socialist market economy, various forms of economy and the various forms of ownership that follow should be allowed into the cultural industry and participate in cultural market competition. In the age of the planned economy, China implemented a unitary cultural system dominated by the state that was in line with its economic system. The current

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round of cultural restructuring aims to shift the role of the government from an operator of culture to an administrator of culture, transferring to society the cultural functions and rights that were formerly the responsibility of the government. This inevitably leads to the emergence and growth of social demand for a variety of forms of ownership in the cultural sector. This is a logical outcome. We cannot dictate which social capital can and cannot enter the cultural sphere, as this is against the principle of universal national treatment. Social capital is only prohibited from entering cultural fields that are critical to the country’s cultural security, which is also a common practice in the international community.

CHAPTER 11

The Relationship Between China and the World in the Development of the Cultural Industry

The relations between China and the world in the development of its cultural industry have been established through the country’s accession to the WTO. Before that, such relations were deeply influenced by the Cold War pattern and ideology, with distinct features of mutual isolation. Since joining the WTO, China has rebuilt its relations with the world, including its cultural relations. The cultural industry has served as a strong tie connecting the country with the rest of the world.

1 The WTO and the Innovation System of China’s Cultural Industry The inception of the WTO is the most remarkable feature of economic globalization and the embodiment of such a trend in the form of a world system. In addition to dramatically altering the modern world trade system and setting up a new global economic system, it has brought great changes to the international environment of its member countries and regions as a way for them to build an international presence. China joined the WTO before it was fully prepared in terms of policies, institutions, ideas, and talent. The decision has helped transform the international circumstances under which the country grows its economy and builds and develops its culture while creating difficulties and impacts in many ways.

© Social Sciences Academic Press 2022 H. Hu, The Development of the Cultural Industry in China, China Connections, https://doi.org/10.1007/978-981-19-3355-4_11

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1. A proper understanding of the WTO: an essential precondition for cultural policies and system innovation The WTO is above all a system of laws and policies. It is a global economic and trade organization established on the basis of the GATT to seek a new balance in the international community as the international division of labor has been further deepened. Over more than fifty years of development, the multilateral trading system has established a set of agreements accepted by all its members. Among them is the Marrakesh Agreement Establishing the World Trade Organization, the GATT, the Uruguay Round agreements, the WTO Agreement on TradeRelated Aspects of Intellectual Property Rights (TRIPS), and the GATS. Together, they constitute the rules of global economic and trade cooperation and competition, forming a complete international economic and trade system and legal system that is universally binding and mandatory in contemporary international economic and trade activities. Since the accession of any country to the WTO must be approved by the legislative body of the acceding country, the authority of the WTO is thus based on the domestic law of the member country so that international law is consistent with domestic law. Hence, the universally binding and mandatory force of the WTO has given it supranational power to some extent, making it the “United Nations” of international economic and trade activities today. In other words, it is the final arbiter of trade disputes between any of its members. Therefore, the WTO is not simply an international organization that enjoys independent status under international law. In fact, it is a supranational world system composed of binding principles and mechanisms formed by a series of agreements, a special form of institution in the modern world system, and a legal system that determines the legitimacy of this form of institution. The WTO grew out of the GATT, which was originally established as a consultation mechanism to resolve problems and tensions caused by the protectionist and discriminatory trade policies of different countries after World War II, coordinate such various trade policies, promote free trade, and facilitate the development of international trade. It is therefore an international economic and trade policy system composed of finance, investment, and trade to begin with. Although the WTO differs greatly from the GATT in both content and form, its nature as a system of international economic and trade policies remains unchanged. Establishing a review mechanism to manage trade policies so that global

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economic policies can be implemented is still an important function of the WTO. It is precisely this function that gives the WTO its authority as a dispute-settlement mechanism. Trade liberalization, nondiscriminatory trade barriers, nontariff barriers, transparency, and MFN treatment are all cardinal principles of the WTO. Among them, the principle of transparency clearly stipulates that trade policies that are not announced shall not be implemented. The policies of a country embody its will and interests. Similarly, as an international economic and trade organization with supranational power, the WTO must, of course, fully express its will and interests through its policies. It is precise because of this that the review mechanism of trade policies created by the WTO has a binding force and normative power on the formulation of domestic and international trade policies by its members. There are many agreements formed within the framework of the WTO involving various fields of culture. The rules and regulations concerning culture can be found mainly in the WTO’s basic rules regulating trade in services and intellectual property protection, namely, the GATS and the TRIPS. Naturally, such basic principles and provisions have provided a textual basis for WTO members to formulate and implement domestic and international cultural trade policies. This is bound to have institutional, legal, and policy implications for the cultural administration, cultural industries, and culture itself of the member countries and regions. By acceding to the WTO, China has not only clearly indicated its goal of becoming an important part of the world economy but also demonstrated the Chinese government’s willingness to accept the basic principles of the WTO and the international trade system, legal system, and policy system established on this basis. In accordance with the spirit of basic WTO principles and the commitments China has made in the protocol on its accession to the WTO, the country will adjust, amend, or repeal its domestic laws, regulations, and policies that do not conform to such basic principles. Thus, an institutional, legal, and policy system with Chinese characteristics and consistent with the basic principles of the WTO can be built on a new platform of institutions, laws, and policies. 2. Tensions between the WTO and China’s view on national cultural security and cultural regulation The WTO system is essentially one of global economic security. However, at the same time, it is a culture, a world of meaning, and a value orientation.

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The formation of WTO principles is a global historical process reflecting the universal aspiration of postwar countries to build a world of equality, justice, mutual benefit, peaceful coexistence, and common development. Such an aspiration embodies the cultural significance of the contemporary world spirit. In terms of content, the principles established by the WTO constitute a code of conduct in international trade. Once written into policies and laws, however, they will be elevated to a universal concept of communication behavior and code of business ethics. They will develop into a measure of the level of modernity and civility achieved in our communication behavior, a notion and system of values, and a new world of meaning. A member country or region could be subject to intervention and even sanctions by the WTO dispute-settlement mechanism if any of its economic and trade behavior, including that of cultural trade, goes against WTO principles and the commitments it made when joining the organization. Despite its many factors that indicate irrationality and inequity, we have no choice but to accept the conclusions and policies generated out of this mechanism before a more rational and equitable one is formed. The principles of the WTO and the concept of communication behavior and value orientation conveyed by them have thus formed a universal cultural existence. Such an existence is the result of a new level of meaning sought and reached by human civilization in the process of communication. It is essentially an effort to avoid the clash of civilizations, seek the integration of civilizations, and achieve the goal of common development. Therefore, to join the WTO is not only to accept a system of law, economy and trade, and policy but also to assimilate into the culture of such a system and identify with the concept of communication behavior and cultural values under modern conditions. In other words, by acceding to the WTO, a country is enriching, improving, and expanding the value system embodied in its culture and negating the existing concept and order of communication behavior. Such a negation is necessary for a civilization to take its leap in modern times, as it is the only way to align two principles of communication behavior and achieve win–win results on the new platform of globalization. Within it lies the affirmation of a new value. Today, it is an indispensable driving force for China to further deepen reform and open beyond the outside world. Without it, the country will be bereft of a strategic mechanism and lose its bearings in the process of integrating into the world system. Consequently, China could lose the opportunity for self-development in the process of economic globalization, in another profound division of

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labor, and in seizing the chance to actively engage in global economic restructuring. For China, joining the WTO is not to passively absorb other cultures but a strategic choice made for self-development after meticulous consideration. It is a cultural choice of the century as well as a choice of international economic and trade system. This choice is not as much painful and tragic as triumphal. It has laid a foundation for China to end its closed-door policy since modern times, resume its cultural status in the world system, and create a new possibility for the rejuvenation of the Chinese nation. Its effects on the future development of Chinese civilization could be immeasurable. China’s accession to the WTO has brought changes to relevant laws and regulations at home and thereby even more radical ones to the structure of economic production and communication relations. This is bound to produce a huge impact on the values, ways of behaving, and concepts of communication built on traditional relations of production and social production modes. The original systems and management models, as well as the corresponding ideas and theories, will also face unprecedented challenges. Ultimately, a potent influence will be produced upon the modernization of China’s cultural effort since the May Fourth Movement to rebuild its mechanisms, systems, and world of meaning. Thanks to the strong overall support from the world, China will grow and modernize its culture and enrich contemporary world culture with a new and sustainable form of culture, thus pushing forward the historical process of the world. However, behind all this, there lurk conflicts of interest concerning national cultural security, including political, economic, and cultural interests. As a result, the foreign culture brought into China through its accession to the WTO will naturally encounter resistance from various aspects, such as institutions, mechanisms, systems, and ideas. Such resistance serves not only to preserve outdated cultural systems and ideas but also to safeguard the cultural sovereignty of the country. As China joined the WTO, a series of behavioral patterns and concepts of communication were formed, which are bound to impact and revolutionize the present state of cultural industries, the cultural administrative structure, and the cultural order and idea of cultural security of the country. All the existing policies and systems concerning cultural administration, cultural industries, and national cultural security will be restructured in the process of violent collision on this platform. Eventually, all these will be fully and vividly manifested in the changes in policies and regulations concerning national cultural security.

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3. The main contradictions and several policy issues in the development and management of China’s cultural industry After its accession to the WTO, to investigate the current situation of China’s cultural administration and cultural industry, it will act in accordance with the prevailing international rules, abide by the multilateral trade principles, practice market access, increase the transparency of trade policies and administration, and implement national treatment and the policy of nondiscrimination. In terms of cultural policy, the country has arguably made insufficient preparations for joining the WTO. There are still many contradictions and policy issues, some of which loom large, manifested mainly in the following aspects: (1) There is no linkage of innovation between the reform of the cultural administrative system and the formulation of cultural industry policies, and the innovation of industrial policies falls behind that of system reform, forming a major hindrance to the development of China’s cultural industry. Since the beginning of cultural restructuring in the 1980s, China has established a preliminary cultural policy system composed of a range of administrative rules and regulations and a corresponding mechanism of cultural administration. These include Regulations on the Administration of Cultural and Entertainment Venues, Regulations on the Administration of the Performance Market, Regulations on the Administration of Films, Regulations on the Administration of Publication, Regulations on the Administration of Radio and Television, Regulations on the Administration of Audio and Video Products, etc., which basically cover the existing cultural industries. The problem is that the existing cultural policies were largely made in the transition process from a planned economic system to a market economic one. Consequently, these policies retain many of the characteristics of the former system. They were not designed for accession to the WTO or in accordance with WTO principles. As China became a WTO member, its cultural industry policies will face radical changes. Meanwhile, such policies were developed by different cultural administrative departments and issued in the name of the government with an emphasis on the protection of industries and sectors. They are based on the vision and interests of cultural administrative departments of the cultural industry. Hence, there is a relative lack of publicness, justice, and equity in

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determining the value and function of the policies and the authoritative allocation of social cultural resources by the government. Policies such as these are less effective in standardizing the cultural industry, adjusting the industrial structure, and guiding industrial planning. Although China has gradually intensified the reform of its cultural administrative system in recent years, issues such as the separation of government administration from enterprise management, that of the functions of the government from those of public institutions, and the shift of the cultural administrative functions of the government have not been fundamentally addressed. In contrast, such reform has further aggravated the existing tensions and conflicts. At the same time, the original system of cultural policies continues to have an effect despite institutional reform and the merging of cultural administrative departments. As a consequence, new institutions are implementing old policies, similar to putting old wine in a new bottle. Without support from the innovation of the policy system, the country has failed to establish and administer a system of great culture in accordance with the law as expected. Nor has there been a strategic shift in the role of the government from an operator to an administrator of culture. In the name of reorganizing resources and optimizing allocation, cultural administrative power has been unprecedentedly concentrated in some regions and fields. Due to this centralization of power, the cultural industry policies formulated alongside the transformation of the economic system have not only maintained the original institutional foundation but also received renewed and powerful support. In turn, such a concentration is justified by this policy rationale. This is a fundamental issue that does not adapt to the change in China’s opening-up policy from that which is limited in scope and area to the two-way opening-up between the country and other WTO members. What matters most to China is the innovation of system and policy in a holistic way, without which its cultural industry is likely to face bleak prospects in the twenty-first century. (2) Unbalanced cultural economic relations and the highly centralized system of cultural administration have resulted in the administrative monopoly of the cultural market; as a result, tensions in terms of market access have been intensified, and the cultural industry faces the threat of a possible oligopoly. Since the 1990s, a number of cultural industry groups in fields such as film and television, newspapers, publishing, distribution, and printing

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have been successively established in some localities in China. The guiding principle is to tap the full potential of existing resources, optimize resource allocation, aggregate multiple capabilities, and improve overall efficiency. On the basis of expanding horizontally and vertically and increasing scale efficiency, we will give further play to the combined effect of multiple media and boost economic vitality through diversified operation. The intention is good. However, these industrial groups are the result of government arrangements rather than market competition. The basic role of the market in allocating resources has been replaced by government power, and the role of market players weakened due to the merger of industrial groups. As a result of government planning and arrangements, cultural enterprises are unable to act as key innovators in the industry. Such mergers and establishment have not succeeded in shifting the function of the government from running culture to administrating culture, nor have they restructured assets or the interests and power of the cultural industry by using idle assets in an efficient way. Instead, it is simply the pooling and use of assets that were previously segmented and fragmented among different departments and regions. It has failed to fundamentally alter the structure of assets and capital, embrace new forms of capital, and create a new capital structure. Put simply, these cultural industry groups remain wholly state-owned. There has been essentially no capital expansion. In contrast, an industrial monopoly larger than the planned economy has been formed under the guise of a market economy. This is an administrative monopoly, namely, a monopoly formed through state power, completely ruling out the possibility of fair market competition. Nonpublic capital is not allowed to enter the core cultural industries; it is difficult to even for public capital outside the cultural system to cross the barrier of the “heavily fortified” management system and gain market access. The unitary structure of the cultural economy and cultural capital dominated by the state has further aggravated the already unbalanced cultural economic relations. From a static point of view that focuses on a certain stage and partial cultural interests, the reform of the cultural administrative system and the implementation of the cultural industry policy have indeed strengthened and consolidated state-owned cultural industries. However, from the perspective of dynamic and comprehensive development, as well as the promise made by China to gradually relax its control over market access after joining the WTO, this policy is likely to exclude social cultural capital,

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an effective entity and true force of the market, in the long term. Ironically, it is precisely such a force that is capable of resisting the impact of foreign cultural capital, cultural technology, and cultural products on China’s cultural industry and cultural market after its accession to the WTO. Such a unitary economic and capital structure has led to an imbalance in the cultural economic relations of the cultural industry as a whole. Effectively defending the Chinese cultural industry against external shocks could be a daunting task without the support of social capital forces. (3) Administrative barriers between departments and regions, industry barriers, and a unitary investment entity are not compatible with the trend to diversify and liberalize cultural investment and stand in sharp opposition to the need for capital expansion to develop advanced cultural industries, enliven the circulation of culture, and establish a large cultural market; hence, they have become a bottleneck in China’s cultural industry development and weakened the cultural innovation capability of the country in handling its WTO accession. System innovation in the past has failed to achieve the expected results, as administrative barriers between departments and regions, industry barriers, and the policy of a unitary investment entity generated in the administrative system of the planned economy remain in effect. Entities outside the cultural system are not allowed to run cultural industries (they can only engage in the entertainment industry driven by catering in the usual sense and the art industry), especially core cultural industries such as film and television, publishing, newspapers, and periodicals. Even Wenhui Xinmin United Press Group (merged with Jiefang Daily Group into Shanghai United Media Group in 2012), Shanghai Century Publishing Group, Shanghai Film and Television Group, and Shanghai Yongle Film and TV Group have thus far been unable to operate other forms of cultural industry. The establishment and operation of cultural industry groups with a larger scale, wider coverage, and greater inclusiveness across regions and even nations are definitely off limits. This, however, is an essential element and indicator in expanding and strengthening the cultural industry. Time Warner, Disney, News Corp, and other major media groups in Western developed countries are all cultural industry groups with specialized expertise in a certain area and diversified operations across different industries and all media. Among them, consortiums of such groups with a clustering structure control nearly

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eighty percent of the global cultural market, which shows its advantages in resource integration. We will not be able to go out if we don’t let others in. Local and departmental cultural protectionism has helped preserve an outdated mechanism of cultural administration while contributing to vicious competition at the expense of national cultural interests. As a result, we face a crisis of survival and development as outsiders reap the benefits. This is a problem pervasive in the current development of China’s cultural industry that demands a prompt solution. In fact, reports reveal that international cultural capital is taking advantage of China’s weak links in its market access mechanism, investment policies, and industrial laws to take an indirect approach to open the Chinese market. Through various forms of capital operations, such as equity participation and mergers and acquisitions, they have entered some core areas of China’s cultural industry. The threat they pose is far greater than cultural investment entities in the general sense. (4) There are prominent policy and strategic contradictions between the need for advanced development of the cultural industry and insufficient human resources in the cultural industry. The cultural industry, an industry that combines high technology with a rich cultural heritage, embodies the great consistency between the need to develop advanced productive forces and the orientations of an advanced culture. It is therefore a field in particular need of highly qualified talent. Naturally, it places great demands on the operators and administrators of the cultural industry, especially cultural administrators, in terms of knowledge, intelligence, and overall cultural quality. This is particularly true in the age of information where digitization, including that of the cultural industry, has become an inexorable trend and various high technologies are being integrated with a rich cultural heritage into high-tech cultural industries. As China acceded to the WTO, the greatest challenge facing the country lies in a desperate lack of cultural human resources. Policies can be changed immediately, and systems can also be quickly adjusted through legislation. The training of talent, however, takes time. As a Chinese proverb goes, it takes ten years to grow a tree but a hundred years to bring up a generation of talent. There are no quick fixes to the shortage of talent. With China’s accession to the WTO,

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overseas cultural industry groups allowed into China will scramble for a share in the domestic cultural market. The need for talent localization will certainly ignite a battle for talent. A possible brain drain will leave the ill-prepared cultural industry of China facing even more severe shortages. This is precisely where we are most at risk and vulnerable. 4. China’s choice of policies and revolution of systems in the cultural industry after joining the WTO (1) Formulate proactive cultural industry policies and build a policy system for cultural administration and the cultural industry that conforms to both WTO principles and China’s cultural conditions and cultural development needs. Through its accession to the WTO, China is not only joining a global economic and trade organization and becoming an important part of the world economy but also accepting a new form of system, a legal culture, and a policy system and reshaping its own in accordance with the principles and spirit of the WTO. Thus, a complete national innovation system can be created. There is no doubt that this innovation will be revolutionary. It is to rebuild China’s social, political, economic, and cultural system with a new system model, a new policy system, and a new legal system as a reference. Facing such a dramatic change, the country should formulate proactive cultural industry policies and build a policy system for cultural administration and the cultural industry that conforms to both WTO principles and China’s cultural conditions and cultural development needs. So-called proactive cultural industry policies mean that based on a cultural platform that combines the past, the present, and the future, China should comprehensively advance the construction of a national innovation system for the cultural industry and implement cultural industry policies that encourage greater openness to the outside world on all fronts. At the Fourth China International Fair for Investment and Trade, State Councilor Wu Yi pointed out that China’s opening to the outside world would enter a new stage after its accession to the WTO: “First, it will shift from opening in a limited scope and limited fields to opening in all directions. Second, it will transition from pilot opening in selected locations in terms of policy to predictable opening within the legal framework, that is, to open according to the promised timetable. Third, it will

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change from unilateral opening to two-way opening between China and other WTO members”. In particular, Wu stressed that “expanding the opening-up of the service sector is an important measure for China to achieve coordinated economic development”. Cultural industries fall into the category of the international service trade to which China should give a positive response. According to the timetable promised by the Chinese government, we should enter the “rehearsal ground” in advance and re-examine China’s cultural industry policies and cultural administrative mechanism in a comprehensive rather than partial way and thoroughly rather than with reservations. We should keep a firm grip on what should be controlled and relax control over other areas. A scientific, efficient, and impartial system of policy innovation is a must. This includes a policy formulation system and one system innovation. The former requires the establishment of a public policymaking department that is independent of the current cultural administrative system and with no self-interests at stake so that it can formulate national policies for the cultural industry based on the cultural interests and overall strategic development needs of the country. It is necessary to radically reform the current system of cultural administration in China, as the management of a great culture cannot do without the support of a sound system. The government should be stripped of all its functions as an operator of culture and assets restructured as per the modern enterprise system. The establishment of public institutions should be completely abolished and replaced by enterprise management. Institutional measures should be adopted to eradicate sectoral protectionism. The functions of the publicity department of the Party committee and the cultural administrative department of the government need to be straightened out, and there should be a division of labor in management with clear boundaries. The Party is in charge of ideological issues, while industrial issues are mainly about market behavior that comes under the administration of the government. This does not mean that the Party committee should ignore market problems or that the government should be indifferent to ideological problems but that we should avoid repeated administration and overlapping functions. Rather than directly regulating the market, the Party should translate its will into government actions through judicial procedures to achieve its leadership over ideology. It would be difficult for China to face WTO challenges without an innovative system as a guarantee.

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(2) Aiming at the strategic adjustment of economic interests and the cultural industry pattern, formulate and implement a proactive and prudent policy in which state-owned enterprises withdraw and privateowned enterprises enter, build a community of shared cultural and economic interests of the nation and the people in developing the national cultural industry, and establish a new system of cultural administration characterized by partnership and a new pattern of cultural industry development with the help of state power. The cultural industry is a broad industrial system covering such industries as culture and art, journalism and publishing, radio and television, film, audio-visual products, copyright, and performance. To cope with the challenges arising from China’s accession to the WTO, we cannot rely solely on the state. This is particularly true, as China faces immense market pressure upon joining the WTO and the ensuing profound impact on the national cultural industry. Worse still, the government alone cannot address the insufficiency of capital, technology, manpower, and management that has long plagued China’s cultural industry. To effectively overcome these difficulties, we have to open the market on all fronts not only externally but also internally. By fully integrating the will of society to participate and drawing support from the private sector, we should develop and implement strategies for privatizing the cultural industry. More specifically, state-owned enterprises should exit such cultural industries, allowing private-owned enterprises to enter. The responsibilities and services that have long been assumed only by the state can now be transferred to the private sector. By perfecting the policy system of the cultural industry that focuses on diversifying investment entities and restructuring cultural investment accordingly, we can rally nongovernmental forces to help meet WTO challenges. A key issue here is to allow all kinds of market entities outside the cultural system, including consortiums, enterprises, foundations, and other legitimate social groups, to operate key cultural industries, including newspapers, periodicals, publishing, and film and television, in the domestic cultural market. A shareholding cooperative system or other forms of investment can be adopted to transfer the assets originally owned by the state and redress the existing imbalance and unipolarity in cultural and economic interests. What is now under the control of the state should be handed over to social and nongovernmental capital forces in a planned, step-by-step manner. In other words, the cultural power and rights formerly controlled by the state should be returned to the

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public so that private capital and state capital can form a community of shared economic interests to cope with the impact of international cultural capital on China’s cultural industry after the country’s accession to the WTO. The people have great enthusiasm for engaging and investing in the cultural industry as well as a sense of responsibility and mission to help meet WTO challenges by developing the cultural industry. Only by allowing more social forces and private capital to actively participate and invest in the cultural industry and encouraging them to combine their own interests with those of the state can China receive strong national support. To make room for private capital, state-owned capital should withdraw from the general fields of circulation and competition of the cultural industry in an orderly way. However, the privatization of the cultural industry does not mean that the whole industry will be privately owned; rather, the investment in its key areas will come from diverse channels, including the public. A new development pattern of China’s cultural industry will be built with the help of public cultural forces. In this process, the government should participate in market competition equally as an investor in the cultural industry. It may enjoy priority in investment but never the right to monopolize. Only those aspects and areas involving national cultural sovereignty and cultural security should be firmly controlled by the government in accordance with the power granted by the Constitution and laws. To make that happen, we must fully innovate the present mode of cultural administration and the idea of policy and establish a partnership between state-owned and private capital and between operators and government administrators. This is a new relationship of equality and cultural democracy built on the basis of common interests. The function of the government is not only to regulate culture but also to straighten out, understand, and rationalize cultural matters so that in addition to the traditional role it plays, the power of private cultural forces can be given full play in promoting the development of national cultural industries. As China’s central leaders have said, any market that allows foreigners in must first be open to us Chinese. This is critical in our opening-up to the outside world. (3) Formulate anti-monopoly policies for cultural industries and access to cultural markets, implement the principle of cultural market access in a wide range of areas, resolutely breakdown industrial monopolization and industry barriers, establish a mechanism of equal and fair market

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competition, and establish a pattern of large-scale circulation of cultural commodities by broadening and deepening cultural industry development while making it increasingly stronger. There were historical and objective factors that gave rise to the existing administrative monopolization and industry barriers in the core cultural industries of China. However, circumstances have changed a lot. As China opens its market to the outside world in all directions after joining the WTO, it is obviously harmful to continue such administrative monopolization and industry barriers. First, monopolization, by its very nature, excludes free, equal, and fair competition, which will inevitably infringe upon consumer interests and impair the overall development of the cultural industry in the long run. Second, monopolization will lead to the protection of backwardness, which is not conducive to innovation. The case of the U.S. Department of Justice v. Microsoft is an example. Third, monopolization impedes the progress of cultural diversification, which will adversely affect the overall advancement of Chinese culture. Finally, monopolization will eventually endanger the survival and development of China’s cultural industry. Therefore, it is necessary to formulate anti-monopoly policies for cultural industries and access cultural markets and break industrial monopolies. In particular, the use of state power by cultural administrative departments to protect the interests of their subordinate enterprises must be resolutely abolished. An important reason for the expansion of the nine global media giants in the international cultural market lies largely in their clustering structure. They integrate with and complement each other as competitors and partners at the same time. In terms of technical means, large media groups have achieved media convergence, namely, the comprehensive use of a variety of technical means. All media giants have operations in almost every field of media, such as film production, book publishing, music production, channel management, web development, entertainment parks, magazines, and newspapers, with combined profits much greater than the sum of their parts. Therefore, while expanding and strengthening the economic scale of state-owned cultural industries, we should broaden and deepen nongovernment-run cultural industries. In other words, we should throw open the doors to all with an open mind and treat the domestic market as we would the international market. Cultural entrepreneurs, financiers, operators, and managers from all over the country and all over the world can find their place in China’s immense market as long as they abide by the country’s laws.

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(4) Reform and build a new system of foreign cultural trade, formulate and implement the strategy of taking our cultural industries into the global arena, vigorously encourage the export of cultural products, and make full use of the global cultural market provided by the WTO to participate in international competition and expand and strengthen our international cultural trade. Drawing as much as possible on the successful experience of China’s foreign trade system reform in these years and the flexible, loose, and free foreign trade policies that have been implemented, we should relax requirements in the examination and approval of the export of cultural products, simplify export procedures, and formulate and implement the country’s long-term foreign cultural trade strategy. In copyright trade and the import and export of films, in particular, more liberal policies should be adopted, and relevant authority should be delegated to lower levels. State-owned, privately owned, national, and local cultural forces should be encouraged to develop international cultural agencies and intermediary services in accordance with international practices and implement new mechanisms of foreign cultural trade. We should actively cooperate with transnational media groups and make full use of their market systems and network systems to tap the international cultural market and compete in it with a new foreign trade system. We should focus on spreading the fine traditional culture of the Chinese nation while playing down the role of ideology and integrating it into a culture. Instead of deliberately exporting our values, we should incorporate them into a form acceptable to all countries in the world, especially Western developed countries. We should adapt to the new requirements of cultural communication as the cultural landscape of the world shifts. Such successful activities as the Sino-U.S. Cultural Exchange Week and A Journey into China held by the Chinese government during the United Nations Millennium Summit are good examples. (5) Make active and reasonable use of the cultural exception clause of the WTO to set up an active early-warning system to safeguard national cultural security and strengthen legislation on cultural security. Since culture itself has become an important component of national interest, the development, control, monopolization, and utilization of cultural industries and cultural markets, as well as cultural penetration and reverse penetration and cultural invasion and counterinvasion, have

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become part of what countries vie for against the background of globalization. Opening our cultural industry to the outside world on all fronts does not mean that we should be left defenseless. Protecting the country’s fundamental cultural interests, especially those involving national cultural security and national cultural traditions, is in line with the spirit of WTO principles. We should therefore make active and reasonable use of the cultural exception clause of the WTO to formulate a cultural security policy suited to China and integrate it as an important part of national security into the legal system. In this way, a complete, scientific, and efficient system for maintaining national cultural security, a perfect market for the import and export of cultural commodities, and a sound mechanism of market supervision will be established; a system of risk assessment and management for investments in the cultural industry will be developed. The ultimate goal is to keep the level of threat to China’s cultural industries below the security line by analyzing flows of cultural commodities in the international market and possible threats to our cultural industry and market as such commodities enter the country through various channels. (6) Push the development of a national cultural innovation system in all respects by further improving the policy environment for the overall innovation of China’s cultural industry and cultural administration, increasing the policy input in creating a system of cultural originality, and building training bases for talent in cultural industries and cultural administration. The flourishing of culture and the cultural industry in a certain region depends directly on the cultural environment in which cultural policies are a major factor. At present, China has yet to build a complete legal system specifically aimed at serving society’s cultural needs, and there is a long way to go before the law-based management of cultural undertakings and industries can be fully realized. As a result, management through policies remains a principal means and mechanism of cultural administration in the country. In this sense, the quality of the cultural policy environment becomes a decisive factor in achieving modernized, scientific, and democratic cultural administration and a direct determinant of the quality of cultural administration and how well-developed the cultural industry will be in such an environment. To improve the policy environment of cultural industries and cultural administration is to improve the cultural policy environment of the whole country and the overall quality of our cultural environment and its indicators. To create a favorable environment for the overall innovation of the country’s cultural industries and

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cultural administration, we must foster a sense of overall innovation, build a mechanism of management by objectives, and coordinate in a strategic way the development of relevant policies. It is necessary to highlight the importance of the innovation of theories and ideas in the innovation system of China’s cultural industry. As the essential foundation of management innovation and system innovation, theoretical innovation contributes to the emancipation of the mind. We should actively encourage and guide cultural communities in China to make bold academic explorations and theoretical breakthroughs in a series of fundamental issues in the country’s social development at present and for a long time to come. They should also be encouraged to use the scientific theory of Marxism and the Marxist worldview to propose and establish various new theories to meet the needs of China’s social development in the twenty-first century. In addition, theoretical innovation, knowledge innovation, and cultural innovation should be vigorously advocated, and policy input should be increased in developing the system of cultural originality. Bold scientific explorations should be encouraged, supported, and protected as long as they do not violate the fundamental principles of the Constitution. Relying on the existing strength and resource advantages of colleges and universities and academic circles, the cultivation of senior professionals in cultural administration and cultural industries should be included in the goals of the Tenth Five-Year Plan for Economic and Social Development of the PRC and in the national MPA (Master of Public Administration) training system. Colleges and universities should offer master’s and doctoral degrees in cultural administration and cultural industries, building a strategic reserve of talent resources from undergraduate to doctoral education. By tracking and studying the development trends of the global cultural industry and integrating the dispersed academic resources and strength of China, we will conduct fair and equal dialogues with international academic circles on a wide range of cultural industry and cultural development issues concerning the WTO on the platform of globalization and establish an innovation system of Chinese culture and cultural industry with a global influence. This should be China’s goal after its accession to the WTO.

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2 Taking China’s Cultural Industry onto the Global Stage As a new way to create wealth in contemporary human society, the cultural industry and its huge multiplier effect are attracting increasing attention from the international community. It is turning into a strategic high ground that all countries in the world are battling for and beginning to produce an unprecedented strategic impact on the global landscape. Both the establishment of a new international cultural order and the restructuring of global cultural power are taking place along the “central axis”, that is, the cultural industry. Naturally, it became an important part of the rapid adjustment of China’s cultural strategy after its accession to the WTO. As suggested in the Proposal of the CPC Central Committee for the Formulation of the Tenth Five-Year Plan for National Economic and Social Development (2000), to further open to the outside world and develop an export-oriented economy, we must take China’s cultural industry onto the global stage and strive to make new breakthroughs in utilizing domestic and foreign resources and markets. This provides a new idea for strategically adjusting the cultural industry after China joined the WTO, namely, that it should go global, not only economically but culturally. The development path and model of the cultural industry must be reconsidered in the context of globalization and China’s WTO accession. All in all, such a suggestion has provided a basis for important strategic choices as China opens up culturally to the outside world. 1. Reestablishing a balance in cultural strategic power between countries A large number of outstanding academic achievements and advanced technologies have been brought into China since reform and opening-up as an effort to bridge the gap between the cultural progress of the country and that of the world and provide intellectual support for reform and opening-up. They have played an important role in driving China’s ideological emancipation, change of ideas, theoretical innovation, and cultural modernization. Thanks to the introduction of modern advanced technologies and the idea of cultural industries, we have gained a much richer understanding of culture, and a cultural industry system is rapidly taking shape. In the process of digesting and absorbing such technologies, we quickly kickstarted the mass production of cultural products, especially

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electronic cultural products, which have entered the world market and competed with products from other countries. A significant cultural trade deficit, however, arose in this process. According to incomplete statistics of the National Copyright Administration, the import–export ratio in China’s copyright trade in 2001 was 10 to 1. Due to a lack of independent intellectual property rights, the country has yet to develop its own core standards and featured products in the trade of electronic cultural products. One typical case is that our DVD exports to the EU were seized by local customs in April 2002. Meanwhile, however, international cultural trade that focuses on copyrights has become a pillar industry in some major Western countries. Major shifts in the structure of international trade have been altering not only the content structure of international trade but also the balance of power in the international cultural landscape. Cultural hegemony characterized by cultural imperialism is rapidly carving up the global cultural market by virtue of its strong position in the cultural industry. Consequently, the contemporary development of China’s cultural industry is facing a problem of space. Furthermore, the country would be stuck in a serious import surplus of cultural products and unequal market competition after becoming a WTO member if this adverse situation remains unchanged for a while. In fact, both import and export come down to the issue of equality and democracy in the exchange and circulation of international cultural commodities. It concerns not just a country’s voice in international cultural affairs in general but also the interactions between countries as equals. The asymmetry of cultural information will inevitably lead to the asymmetry of cultural communication, which will be followed by an imbalance in the cultural market. As a result, countries in a weaker position are bound to lose their market initiative, affecting the weight they carry in international relations. Going global, therefore, is a strategy for cultural development as well as economic development. As China shifts the focus of its economic development from imports to exports, it is necessary to develop and implement a strategy for taking our culture and cultural industries into the global arena. A new pattern of reform and opening-up that encourages both the import and export of cultural products should thus dominate the long-term strategic arrangement for the development of China’s cultural industry. Going global is not only the result of a simple analysis of the current development trends of the international cultural industry but is also determined by the overall interests of our country and the laws of global economic and cultural development.

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2. Seeking new sources of cultural growth Since the beginning of the twenty-first century, uncertainty has acquired a new form and expanded in scope that constitutes the global environment today. The domestic market alone does not possess a capacity strong enough to drive the effective spread or growth of the culture. This is why the strategy of going global is necessary in our integration into the modern world system. It enables us not only to participate in the establishment of a new global cultural order but also, more importantly, to obtain market demand, an essential driving force for cultural growth. As an important force in adjusting the economic structure and stimulating domestic demand, the development of the cultural industry itself also needs to be boosted by domestic demand and by overseas market demand. We can stimulate the domestic market with the world market, introducing overseas demand to drive the growth of domestic demand and the competition between Chinese enterprises for international market shares. By bringing in foreign markets and competition, we are reinforcing our ability to go global. This has become an important strategic choice for the development of cultural industries in some countries. For any country in the world, however big the domestic market is, it pales in comparison with the world market. It is impossible for a country to achieve the comprehensive and sustainable development of its cultural industry if it only sets its sights on the domestic market without a global vision and support from the world market. Thanks to demand from the global cultural market, the American film industry has become a symbol of American culture and one of the pillar industries that earn foreign exchange through exports with a complete industrial system. Such support has not only greatly boosted the development of the American film industry and its related cultural industries, with a huge cultural industry system formed, but won the country enormous space for seeking global interests. Today, Hollywood is not just a synonym for the American cultural industry but a symbol of power and cultural hegemony. After all, the American film industry is no longer a form of mass culture in the general sense. It has, to some extent, become an important component of national strength for America and a bargaining chip in its negotiations with other countries over cultural market access. Moreover, it has been playing an increasingly significant role in international politics, economy, and culture. One of the important reasons why China’s cultural industry has not been able to compete effectively in

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the world market lies in the lack of an idea of the world market and an awareness of the global audience. Our blind confidence in the vastness of the domestic market has resulted in a lack of originality and imagination in content production and a massive loss of cultural consumption resources as international cultural products flood in. There is certainly no way for the domestic market with its limited capacity to accommodate the demand of various market entities for unlimited expansion. Troubled by vicious competition in the cultural market, China has failed to establish effective ethical principles that guide the development of the cultural industry, nor has it been able to form a powerful pulling force for domestic demand, economic growth, and strategic adjustments of the economic structure. In trying to regulate the market, the country has paid exorbitant administrative costs. Therefore, shifting the focus of cultural industry development from import to export is not only a measure taken in response to WTO challenges but also a conscious and active choice made to improve our cultural originality and cultural environment. It is thus urgently called for in our efforts to push the strategic adjustment of China’s cultural industry structure. However, we have long been paying more attention to intergovernmental cultural exchanges in our cultural relations with other countries and have seldom or almost never considered the issue of bringing Chinese cultural products to the world from the perspective of markets. As a result, foreign trade in culture occupies a meager proportion in the structure of China’s foreign trade. The Chinese cultural products that we see being disseminated internationally have largely been products of the natural economy that rely on the consumption of cultural resources such as Chinese acrobatics and Beijing opera. With their influence limited to diplomatic occasions, such products have not yet reached the mainstream cultural markets of the world. There are too many institutional barriers to foreign cultural trade, as too much emphasis has been placed on the importance of ideology in foreign cultural exchanges. China’s foreign cultural trade is excessively controlled by the central government, depriving local governments of their autonomy. There is no effective system of international cultural trade or strategies for conducting foreign cultural trade. Nor have we cultivated cultural industry clusters or large multinational cultural enterprises that can engage in international competition. Without a group of large cultural enterprises capable of transnational cultural production and management, we will not be able to make full use of both domestic and overseas resources and markets

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after China’s accession to the WTO. China’s cultural industry will not be able to take full advantage of WTO rules to reasonably allocate resources on a global scale so that our cultural industry will gain a competitive edge in the global market. The country is even less likely to become an active part of the international cultural division of labor and the reconstruction of the international pattern of cultural interests based on the strategic needs of economic development and cultural industry development to gain more and greater strategic interests in the diversification of world culture and globalization of cultural industries. Therefore, it is necessary to build a group of transnational corporations with the ability to participate in international competition and speed up the restructuring of foreign cultural trade enterprises so that they can truly become market entities with an independent legal status. We need to combine the strategy of going global with the strategic adjustment of the cultural industry structure and take both the cultural industry and the economy onto the international stage. While restructuring the cultural industry in a strategic way, we should also adjust the product structure and industrial structure of China’s foreign cultural trade. The markets explored and experience accumulated as our economic development goes global should be fully utilized to drive cultural export. Instead of discussing cultural exchange and international trade in the general sense, we should foster an awareness of international cultural trade. 3. Participating actively in the establishment of an international cultural trade governance system To take the cultural industry onto the global stage, we must rebuild the policy system and legal system of our foreign cultural trade and reform and reestablish the foreign cultural trade system based on the overall strategic needs of China’s opening to the outside world after its accession to the WTO. We should vigorously encourage the export of cultural products, make the utmost of the global cultural market provided by the WTO, and actively engage in international cultural trade competition. Drawing on as much as possible the successful experience of China’s foreign trade system reform in these years and the flexible, loose, and free foreign trade policies that have been implemented, we should relax requirements in the examination and approval of the export of cultural

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products, simplify export procedures, and formulate the country’s longterm foreign cultural trade strategy. In copyright trade and the import and export of films, in particular, more liberal policies should be adopted to deregulate and relevant authority delegated to lower levels. State-owned, privately owned, national, and local cultural forces should be encouraged to develop international cultural agency services and intermediary services in accordance with international practices and implement new mechanisms of foreign cultural trade. We should take the initiative to cooperate with transnational media groups, using their advanced technology, effective management experience, strong financial strength, and global market systems and network systems to tap the international cultural market and compete in it with a new foreign trade system. We should play down the role of ideology and integrate it into the fine traditional culture of the Chinese nation. Instead of deliberately exporting our values, we should incorporate them into a form acceptable to all countries in the world, especially Western developed countries. We should adapt to the new requirements of cultural communication as the cultural landscape of the world shifts. In accordance with the principles of a unified legal system, nondiscrimination, openness, and transparency, the government’s actions should be standardized to create a fairer, more transparent, and more predictable market environment for cultural enterprises. Meanwhile, we should build a system to support and facilitate the efforts of all kinds of cultural enterprises to explore the international market so that the strategy of going global can be put into effect. The strategic goal of a country’s cultural development is to give full play to its comparative advantages. In other words, one should play to their strengths and minimize weaknesses. To bring China’s cultural industry to the world, we should also follow this principle and select the cultural industries and cultural products in which we have a comparative advantage. Only in this way can our companies gain a competitive edge in the international market, and the structure of our factor endowments continue to improve with the development of the cultural economy, thereby catching up with developed countries in the end. Judging from the current development of our cultural industry, its comparative advantage lies still in the rich cultural heritage and traditional cultural resources. Whether it is the Beijing opera tour in Europe, Kunqu opera being listed as oral and intangible heritage of humanity by the UN, or Crouching Tiger, Hidden Dragon winning the Academy Award, it is the uniqueness

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and irreplaceability of national culture that attracts the world’s attention. It is precisely because of the universal value of such a comparative advantage to human culture that the exploitation and utilization of this resource has naturally been included in the cultural industry strategies of some Western countries. The most typical example would be Mulan, a 1998 American animated film inspired by the tale of the eponymous legendary folk heroine from the Northern and Southern Dynasties era of Chinese history. Moreover, the last ten years of China’s international book trade and copyright trade have been dominated by traditional cultural content. If our selection of cultural industries and cultural products is not based on our comparative cultural advantages but on catching up with and surpassing others in a general sense, we will not only fail to form a competitive edge in the global cultural market but also risk losing our entire market base. As the proverbial saying goes, haste makes waste. The rush for quick results will surely widen the gap between us and developed countries. The overtaking strategy in culture must be based on making the most of one’s cultural comparative advantages. Going global culturally is not just about exporting cultural products. Pushing cultural products into the global market, or the international trade of cultural products, is but one part of the entire strategy. The cultural experience of Western countries provides a major theoretical basis for a series of research articles that advocate cultural restructuring and striving to develop cultural industries. Among all the arguments, the most cited and influential one is about the organizational, institutional, and system arrangements involving cultural industry development in these countries and their cultural legal systems that center around such arrangements. In other words, while introducing Western experience as a reference, we are also bringing the theoretical propositions and modes of arrangement of Western cultural systems into the development of our cultural industry and the establishment of a cultural industry system. For Western developed countries, the strategy of going global culturally refers to the massive export and trade surplus of theories and models of cultural systems as well as cultural products to China. China has gone through the posttransition period after its accession to the WTO. On this long journey to the world aimed at rejuvenating Chinese culture, the country will encounter not only the great challenge posed by Hollywood-style cultural product markets but also, more importantly, the institutional challenge of the overall international cultural strategic competition behind such cultural product markets.

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The debate on carbon emissions at the United Nations Climate Change Conference in Copenhagen is a major one on new values concerning the future destiny of mankind, world development, and the reconstruction of a global governance system, offering a preview of the new international cultural strategic competition. The international cultural trade system and reform in global governance will face new challenges and opportunities in this process. The issue of low carbon concerns a country’s cultural and economic strategies. Having a strong voice and taking the moral high ground can help us occupy a strategic position of commanding height in the global economy today and in the future. Hence, in the era of international low-carbon competition, the development of China’s cultural industry cannot be limited to the international trade of cultural products or the reversal of its cultural trade deficit with foreign countries, although both are crucial to the enhancement of the country’s cultural soft power. To gain real advantages in the world’s future cultural strategic competition, China must achieve strategic innovation while taking its cultural industry onto the global stage. The country should play an active part in building a system of international cultural trade governance and establish Chinese standards for measuring the rules of the international cultural market as well as the Chinese experience and idea of cultural industry development. The key to and foundation of going global culturally is the internationalization of cultural systems and standards. Creating a platform for equal dialogue and common development for different civilizations is necessary for building a harmonious world, which offers immense opportunities for creating a new cultural order and innovating the cultural industry system in the international community. Those who take the initiative to achieve innovative success will acquire strong soft power and core cultural competence. By seizing the strategic high ground in the future development of the global cultural industry, they will exert their influence upon the development trends of world culture and gain a powerful voice and a tremendous advantage in cultural resources. Generally, the cultural industry falls into the category of a lowcarbon economy. However, there are in fact low-carbon and high-carbon cultural industries. In other words, the cultural industry is not without problems such as carbon emissions, resource depletion, and environmental pollution. Therefore, we need to transform the mode of not only economic development but also cultural industry development. Low

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carbon is a global issue with universal value and a broad base of international consensus and recognition. Internet governance is related not only to ideology but also to the basic rights and interests of citizens, national image, national sovereignty, and national cultural security. A British research team is looking at the carbon dioxide emitted through the production of each disc, which means carbon emissions in the general economic sense in the production of cultural products have been incorporated into the timetable of a carbon-led strategy for large countries such as the U.K. It will be an extremely severe challenge for China, a major audio-visual export country, once such research results are published and used by Western powers to develop a new carbon emission standard for international cultural trade and establish a new order of international trade in cultural commodities. China’s cultural industry strategy of going global will be barricaded by the West on the issue of carbon. Due to a series of problems caused by an extensive mode of development, China’s cultural industry has not only come under repeated fire from the public at home but also been criticized and even boycotted by the international community. In the face of a new international cultural order that is being reconstructed, efforts should be made in the utilization of cultural capital, the introduction and development of cultural resources projects, and international cultural trade. China should start building its own pricing mechanism based on low-carbon standards and define its energy conservation and emission reduction targets with energy consumption per ten thousand yuan of output value as an indicator. On this basis, the standards and discourse of China on developing low-carbon cultural industries will be established, and the voice and sense of cultural security of China will be created through proactive innovation of its cultural strategy and system. On the issue of low carbon, the country must maintain its momentum of development and dominant position. There is no way to ensure development without dominance. This is true culturally as it is economically. As early as 2005, the U.S. Congress passed the Broadcast Decency Enforcement Act, which was signed into law in the next year. To purify the social and cultural environment and promote the green development of cultural industries, we introduce such low-carbon values as a basis of the new strategy for developing China’s cultural industry. With the advent of the global low-carbon era and a deeper integration of culture and economic development, the relationship between the economic base and the superstructure is being reconstructed. The two share each other’s characteristics, which is vividly manifested in our

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modern economic and cultural life. Creative industries have been introduced into China, and cultural industries have begun to cross industry boundaries. As a result, the formerly rigid economic structure is evolving toward greater flexibility, giving birth to the cultural economy and creative economy and dissolving the conventional line dividing the three types of industries. A new social structure that is both material and spiritual arises from this. The materialization of spirit and the spiritualization of material, as well as materiality and spirituality replacing each other in objects, are becoming a new development trend in human society. Low carbon is a salient feature of such a new social structure that is taking shape, a sign that human society is moving toward ecological civilization. Every major restructuring of human society is achieved first in values. To restructure China’s international cultural relations in the low-carbon era, we need to think beyond the relation between the economic base and the superstructure when taking our culture and cultural industries onto the global stage. In our cultural exchanges with other countries, we should express our respect for common market principles more profoundly and apply them in depth. The spiritual principles of material development should be deeply embodied in the principles of intercultural communication in our spiritual and cultural development, and the latter are innovated based on the former to restructure and shift the power of discourse. This should be a guiding thought for China to pivot from going global culturally to cultural internationalization. Today, low carbon is a spiritual principle of material development that is being actively pursued in the international community. We should therefore proceed from the application of such a principle in cultural development, especially the strategy for cultural industry development, in internationalizing Chinese culture.

3

Building a Harmonious World and the Development Strategy for China’s Cultural Industry

The concept of a “harmonious world” was put forward by Hu Jintao, former President of China, in his speech titled “Striving to Build a Harmonious World of Enduring Peace and Common Prosperity” delivered at the summit meeting commemorating the sixtieth anniversary of the founding of the UN on September 15, 2005. This is another strategic theory on the world order with universal strategic significance after the

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“three worlds theory” presented by China, a totally different cultural strategic theory and concept put forward after the “clash of civilizations”, and a value proposed as China adopts a global vision, participates in international affairs, rebuilds its relations with the world, and restructures global governance. This strategic theory and concept has clearly demonstrated that the Chinese government is committed to engaging in international affairs and becoming a part of globalization. In the context of such a new national strategy, rethinking and reselecting its strategic goal has naturally become a major problem facing the development of the cultural industry in contemporary China. 1. The great concept of a harmonious world envisions a structure and state of world order and reflects upon the restructuring of the global cultural order The idea of a harmonious world is a diplomatic vision and cultural description about the structure and state of the world order. It includes all the future political, economic, and cultural goals of the world. Culture is an important component and symbol of world harmony, and cultural harmony is a major and distinct feature of a harmonious world. To build a harmonious world, we must create a harmonious world culture. Recognizing and respecting the cultural diversity of the world is a basic prerequisite for building a harmonious world. There are different ways of forming a civilization in different societies, which are manifested in different forms of development of social productive forces and specific dominant forms of achieving a high level of productivity. Culture in the ultimate sense reflects the development of social productive forces and forms of civilization. Hence, the relation between culture and forms of modern social civilization changes with the mechanism and degree of cultural materialization only when all the achievements of civilization in the material world are accumulated and manifested in culture and when the materialized form of culture has acquired the value of civilization. The particularity of the way in which a civilization is formed is the yardstick by which one civilization is distinguished from another. The way of forming a civilization uses the development of certain social productive forces, which determines its historic significance, as an indicator. In discussing the relationship between spiritual production and material production, Marx pointed out that material production itself must, in

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the first place, be considered not as a general category but as a certain historical form. For example, the spiritual production adapted to the capitalist mode of production is different from the spiritual production suited to the medieval mode of production. If material production itself is not seen in its particular historical form, it is impossible to understand the characteristics of the corresponding form of spiritual production and the interaction between the two.1 Agricultural civilization relies on agriculture as its main form of social productive force and, based on this, establishes its organizational form and way of existence composed mainly of rural societies. On a global scale, this is a form of cultural production devoid of effective interconnection. The primary form of social productive forces in industrial civilization is its industries. In addition to generating new social productive forces, the invention of machines and the revolutionary changes in production tools have contributed to new advancements in the social space of human existence by leaps and bounds. Agricultural civilization that depends solely on agriculture has developed into a diversified civilization dominated by industrial culture with a new structure with multiple driving forces. The birth of such a new structure is revolutionary in that it has blazed new trails for the development of human society that accord with the need to elevate our civilization, leading to a qualitative transformation and expansion of area in our capacity for spiritual and material appropriation of the world. The modern cultural industry, which was generated by large-scale machine reproduction, has connected the world for the first time. The level of industrial development has thus become a measure of how international a country is and a historical measure of the progress of civilization. Information civilization has removed the restrictions on productivity in agricultural civilization and industrial civilization. All the achievements of information civilization can be widely applied to agriculture and industry, thus surpassing the binary opposition of the above two forms of civilization in terms of the forms of productive forces, namely, the way in which a civilization is formed. In the 1990s, the United States began to implement the national strategy of building an “information superhighway”, through which the functional structural transformation of social existence was fully carried out. Since then, it has become a major global trend to give full play to the leading role of information technology in 1 Karl Marx and Frederick Engels, Karl Marx, Frederick Engels: Collected Works, Volume 26, Book 1, 296.

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the development and progress of a country and society by starting an information revolution and enhancing one’s digital presence. All areas of development and choices of national development mode in modern human society are measured by the extent to which they are informationbased. Digital technology is widely used in various fields of human society and is profoundly altering the existence of human society. The emerging Internet has replaced traditional carriers of information, with virtual living becoming an important way of life for people. There is no civilization that can last forever. They alternate with each other, as determined by their law of development. The length of time it takes for such an alternation to happen within a given space depends entirely on the rate at which a civilization evolves in that particular space. With the arrival of information technology, a new form of civilization is developing and growing into a form of human society. The cultural industry is a product of modern industrial civilization where machine reproduction has greatly improved cultural productivity and promoted the dissemination of cultural products and spirits. Space and time are no longer obstructing the exchange of civilizations, making the development of human society possible. The cultural industry is an important form of organization and civilization in modern society that participates in the allocation and integration of various social resources, including political, economic, cultural, social, natural, material, and immaterial resources. Changes in the cultural industry are affecting the form of human civilization and the trend of social development. The form of civilization varies with the historical period, which indicates the different stages of civilizational development. Such an integration of resources is manifested in its combination with information technology and the information industry in the technical form, leading to new combinations of the relations between social factors of production. In terms of content, it is manifested in a combination with the entertainment and lifestyle of people. As a result, the desire to meet people’s diversified demands for cultural consumption has become a driving force for the development of the cultural industry, contributing to a direct relation between the cultural industry and people’s social life. The degree to which people participate in developing the cultural industry marks not only the modernized development of the cultural industry of a country and society but also the extent to which citizens exercise their cultural rights. It is the difference in this extent that brings about the difference in the progress of civilization and modernization of a country and society.

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Modern people are already living in a surreal consumer society simulated and created by the cultural industry. In such societies, cultural life is no longer set in stone. People’s social relations are not only fluid but are rarely regulated or structured by established social norms. For example, the world of children’s games has changed radically since the birth of the modern cartoon and animation industry, which has provided countless animation products. The traditional real world of direct emotional communication between people has been replaced by the virtual world of the Internet or videos. The emergence of virtual worlds is pushing the creation and dissemination of fairy tales in traditional forms out of the mainstream of children’s world of games. Instead of learning about the world through real-world interactions with their peers, children form their judgment of the world in the virtual world of the Internet or videos. It is in the course of the continuous revolution of the cultural industry that the whole cultural ecology changes in modern society. Such changes have been taking place at an unstoppable speed since the printing and film industries were created. The faster they go, the faster social civilization changes, and the greater the cultural difference between countries will be. So-called strong and weak cultures are defined not in terms of the origin of culture but in terms of the influence of the modern cultural industry on the construction of modern societies. The reason why American culture is referred to as a strong culture lies not in its longer history but in its great impact on the construction of modern Chinese society. Such an impact comes from the American cultural industry epitomized by Hollywood. Modern society is being constructed along the path of cultural industry development. The development of cultural industries is a sign of the progress of civilization in modern society. Countries with well-developed cultural industries possess a stronger capacity for cultural production and cultural consumption, which determines the advancement of social civilization as well as the social resilience of a country or region. The development of cultural industries, therefore, mirrors the social structure and order of a country or region. Among the factors that constitute human society today, the cultural industry is the best indication of the political, economic, social, and cultural content and relations of society. The industrial structure of the cultural industry and the economic contribution it makes reflect not only the degree of economic modernization of a country or region but, more importantly, the share of strategic resources controlled by this country or region in the world economy.

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There are many forms of communication between civilizations. Today, the trade of cultural products is the basic form, for which the cultural industry is the most important platform. A harmonious world culture is built on diversified forms of civilization and their equal right to develop, manifested in the development of cultural industries. Therefore, in the spirit of equality and openness, we should uphold the diversity of cultural industries, whether as a modern embodiment of the diversity of civilizations or as an important driving force for the progress of civilization, under different cultural conditions. This should be an integral part of promoting democracy in international cultural relations and working together to build a harmonious world that accommodates all civilizations. 2. Guided by the purpose of building a harmonious world, a system of goals should be created in the development strategy for China’s cultural industry The cultural industry today can best reflect the world’s political, economic, and cultural conditions and tensions in the relations between them. In the internal tension of the cultural industry, the change of any force will lead to greater changes in other forces. Therefore, in a sense, the formation and changes of the forces of the cultural industry are actually a manifestation of the changes of the world’s political, economic, and cultural relations. This is as true in a country as it is in the structure of the world order. Hence, the competition of cultural industry policy on market access between countries and the dispute over intellectual property rights are essentially a fight for dominance in building the world’s cultural order. This is the core of the cultural strategic competition between countries. The modern world cultural order is embodied in the system of the international division of labor in the cultural industry. Generally, countries and regions at the bottom of this system have the least say in the reconstruction of the cultural order of the modern world. Judging from the basic pattern and situation of the modern international division of labor in the cultural industry, most countries are unfortunately marginalized in the world system of cultural industry development. A certain world cultural order is both a precondition for and result of the international division of labor in the cultural industry. The greatest disharmony

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in the current world cultural order is the disharmony in the international cultural division of labor, namely, that a few major cultural industry powers monopolize almost sixty-five percent of the global cultural market. The historical movement of the cultural industry has given rise to the structure of its division of labor and a system based on this structure. In China, the eastern, central, and western regions are not only a concept of space but also a concept of the economic and cultural division of labor, marking the different degrees of sophistication of these three regions in the development of cultural industries. This is why they each occupy a different place in the system of China’s regional development strategy: The east serves as a forerunner in development, while we actively develop the west and give impetus to the rise of the central region. In terms of the cultural industry, the eastern part of China has been listed as a key cultural industry development zone in the country’s first outline of the national plan for cultural development. From the perspective of geographical distribution, the eastern region is home to the most developed cultural industries and clusters of cultural industries in China. Thanks to the diversity of ethnic minority cultures and natural and human resources, cultural tourism has generally become a major part of and driving force behind the development of cultural industries in Western provinces, with other cultural industries basically formed based on it. Although some provinces may possess a considerable share in some areas of the cultural industry in the country, the basic spatial structure of China’s cultural industries is on the whole characterized by a high density in the east and a low density in the west. The central region is the belt of transition right between the two. Such is the case with the world as it is with China. The concepts of the East and the West refer not only to international political and economic relations but also to the international cultural division of labor in the modern world system. When we think about the strategic goal and positioning of China’s cultural industry in the building of a harmonious world from such an angle, all analyses should be placed within the international division of the labor system of cultural industries. In other words, formulating the development strategy for China’s cultural industry is a major task that should be examined in the system of the global division of labor in the cultural industry. In this process, we should seek a point of strategic integration between China’s cultural industry development and the building of a harmonious world and a relationship of strategic engagement based on this point of strategic integration. Furthermore, in

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this relationship, we should enable China’s cultural industry to flourish by adapting its development and division of labor system to the modern cultural division of labor of the world. The international division of the labor system of the cultural industry is a system that is constantly changing and expanding. Many resources are needed to develop the cultural industry, which is a complicated and systemic project. Not all countries and regions are suitable for the development of any form of cultural industry. Similarly, not all forms of a cultural industry can participate in the creation of an international division of labor system of the cultural industry and influence the establishment of the international cultural order. Only those that, as vital elements, have constituted the current international cultural order and deeply affected the ongoing changes of international political and economic strategies are deemed strategically valuable and eligible to participate in creating an international division of labor system. The form of cultural industry and its influence on international social life varies with the historical period of development. A cultural industry can be considered a key component of the international division of labor system only when it exerts a profound influence upon the current growth trends of culture and the restructuring of the world cultural order. In today’s world, the media industry has the most profound influence on the changes of the world. The media industry has a strong voice, which is one of the most important forces that affect and even intervene in the international power structure and changes in the world’s interest pattern. Whoever controls the media industry holds all the cards in the development of the world? The reason why the United States possesses so much influence and power in global affairs, in addition to its economic boom, is that it owns the most powerful media groups in the world and the media industry system formed by them. To a large extent, changes in the international division of the labor system of the cultural industry today are caused by the United States the “eye of the storm”. Therefore, to participate in the creation of a new system of the international division of labor in the cultural industry, we have to gain a clear understanding of its current situation and find our strategic position on this basis. We should also seek the best way for us to participate in creating such a system. When a single media industry is not strong enough, we can establish a mechanism of regional cultural industry cooperation and garner strength from the entire region to participate in the international market competition of the cultural industry. By virtue of international political or geopolitical forces, we could use the rules of

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competition to gather strength and gain a voice so that the new international division of labor system of the cultural industry and the new international cultural order will develop in a direction conducive to the maximization of the cultural interests of our country and regions. Hence, in terms of the strategy for international cultural development and competition, different regions should seek common ground and find a way to jointly participate in the creation of a new international division of labor system of the cultural industry and establish a mechanism and model of cooperation based on this common ground. Only in this way can we maximize the benefit of regional cultural industry cooperation, thereby achieving cultural harmony, prosperity, and development. 3. The setting of strategic development goals and the strategic value orientation of the cultural industry should be further deepened to provide strategic support for and diversify the forms of new international cultural strategic competition A harmonious world is an international environment that China must create to build a harmonious society. Without a harmonious international environment, it is impossible for the country to achieve the ambitious goal of building a harmonious society. This is because today’s China is an important part of the modern world system, and any change in the modern world system would bring even greater changes to China’s efforts to build a harmonious society. More importantly, China is facing a rare period of strategic opportunities for self-development. If it fails to seize such opportunities to achieve the rejuvenation of the Chinese nation, it will pay a greater price in future competition. Therefore, striving to build a harmonious world is of utmost strategic importance to today’s China and the most critical strategic need of contemporary China. Proceeding from such a national strategic need, it is a logical strategic choice for China’s cultural industry to redefine its development strategy and value orientation and provide strategic strength and diversified forms for new international cultural strategic competition. This is especially true after the posttransition period since China’s accession to the WTO, where China is faced with even fiercer global challenges. With conflicts arising in the field of intellectual property rights, strategic competition in culture has intensified and will increasingly become a new area in which Western powers represented by the United States engage in strategic competition with China. It is no longer a matter of time for China to further open its cultural industry and market to the outside world and to engage

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more deeply in global cultural competition and the international division of labor in cultural industries. As international strategic competition shifts to nonmaterial fields, cultural strategic competition between countries will be elevated to a major form of strategic competition between countries. Whether and to what extent the development of China’s cultural industry can provide strategic strength and diversified forms for the upcoming international cultural strategic competition will contribute directly to the international cultural strategic competitive strength of the country and the strategic position of the cultural industry in China’s overall pattern of cultural power in the future. The development of China’s cultural industry concerns not only the construction of Chinese culture itself. It is a world event, similar to the founding of the socialist cultural system. Whether in terms of construction or reform, the development of China’s cultural industry is a strategic adjustment and choice made by focusing on the overall national strategic interests. Any change in it will lead to greater changes in the international cultural strategic pattern and the international division of labor system of the cultural industry. Therefore, one of China’s greatest strategic motives for developing the cultural industry is to change its status in the new international cultural strategic pattern and new international cultural industry competition. In accordance with its planned economic model at that time, a national cultural industry system dominated by cultural undertakings was chosen by the newly founded China to meet the strategic needs of the country in international cultural strategic competition. Similarly, today’s China should actively participate in international cultural strategic competition, become involved in creating a new international division of the labor system of cultural industries, and build true national cultural soft power. There is no way to complete such a strategic transformation and realize its strategic intention without changing the system. Hence, profoundly restructuring the cultural system and opening the cultural market to the outside world has become a revolution that China must accomplish after economic restructuring. The accession to the WTO has offered a strategic opportunity. China should seize this opportunity to take an active part in globalization and, through this, participate in the reallocation of global cultural resources and the establishment of a new world cultural order. While striving to reshape itself, the country should obtain the strategic resources and strategic space necessary for its cultural development. Based on such a strategic perspective, China should develop

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its cultural industry into a major force in international cultural strategic competition. One fundamental goal of China’s development strategy for the cultural industry is to provide strategic strength and diversified forms for such new international cultural strategic competition. Before China joined the WTO, the global vision and theoretical achievements of its research on the development strategy for cultural industries made a great difference in strategic choices made by the country. In contrast, in recent years, there have been major limitations in our thinking on the development strategy for cultural industries, whether in theory or in practice. To be more specific, we tend to proceed only from local interests or the problems and difficulties to be solved in the current stage in considering and developing the system design and choice of path for China’s cultural industry development. Never or seldom have we sought a strategic foothold for the development of cultural industries based on the design of the cultural industry system needed by a country or region to participate in the future cultural strategic contests between countries and the rebuilding of an international division of labor system of the cultural industry. This is an important reason why China has encountered difficulties in deepening and advancing its strategy for the cultural industry, as well as the resulting strategic predicament, after the initial success of its development. Transforming the mode of economic growth has become a strategic need in China’s national economic and social development. Whether we can achieve such a transformation, as well as the extent to which it can be achieved and the time it will take, concerns the speed and quality of national economic development. Moreover, if handled improperly, this strategic problem will plunge the development and stability of our society into an immediate crisis. There is little room for a shift in the mode of economic growth. One major factor, apart from the ability to innovate, lies in cultural productive forces, meaning they have not been liberated as they should and demonstrated a feasible model for the mode of economic growth to meet strategic challenges. Vigorously developing the cultural industry should be established as an important part of the efforts to build a socialist culture with Chinese characteristics, thereby enabling the country to take an active part in international cultural industry competition and strengthen national cultural soft power. It is difficult to achieve the expected goal of cultural industry development if it is regarded only as a policy measure to overcome the structural tensions and institutional obstacles in the process of strategically adjusting the economic structure,

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namely, that it is defined only as a new economic growth point. Moreover, with the increasing difficulty of establishing and promoting a necessary system, cost increases in cultural industry development are highly likely. We should not let the economic goal of cultural industry development obstruct its strategic value orientation and misguide the liberation of cultural productive forces. We should actively explore ways for China’s cultural industry to participate in creating a new international division of the labor system of the cultural industry and a new global cultural order and reforming the international cultural industry system. New relations between countries and regions should be established in cultural industries and international cultural market competition to provide strategic strength and diversified forms for the country on the basis of a highly vibrant and resilient cultural order of the world. Strategic strength here includes the ability to make strategic cultural investments across distance, to innovate cultural products, and to create new forms of cultural industry, which we call diversified forms. Thus, through the establishment of diversified market forces and cultural industry forms, we can eliminate the increasingly intensified frictions from Western countries in cultural market access and intellectual property rights protection. Only through positive participation in international cultural strategic competition can a country safeguard its cultural security. To achieve harmonious and creative development of the world’s cultures, the cultural structure, particularly the cultural system and division of the labor system of the cultural industry, must be adapted to the cultural development needs of all countries in the world. There is no alternative. It is important not only to respect differences and diversity in theory but also to fully embody this theoretical concept in system design. Through institutional design and legal arrangements, the diversity of human culture should be maintained to the maximum extent. A new idea of maintaining the cultural diversity of mankind with the force of law should be established so that all countries in the world can enjoy the greatest and fullest freedom of cultural development and cultural rights in a global cultural order of mutual respect and equality. In recreating the international division of the labor system of the cultural industry, is it possible for China to push through the limitations on market access in its current system design, moderately open the market to international capital, and selectively participate in the international division of labor in core cultural industries based on international practices? In this regard,

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the success of the performance industry has provided exemplary experience in access to cultural industries and cultural markets in a broader sense. Overall, a new cultural system should be established under the effective control of law to promote China’s active participation in international cultural strategic competition and the international division of labor of cultural industries. This calls for systematic theoretical verification of the development strategy for China’s cultural industry from multiple angles. By comprehensively summarizing and reflecting upon the achievements of the previous round of cultural industry development, we should study the new institutional defects caused by the irrational system design and institutional arrangement of the cultural industry. Only in this way can the cost of exchange be minimized in system design and institutional arrangement through the new development strategy for China’s cultural industry. Over the long life cycle of the cultural system, we will liberate cultural productive forces, enabling the cultural industry to be an active part of the international division of labor and the building of a harmonious world. Harmony is achieved through the growth of strength. We cannot expect the strong side to make strategic concessions to achieve the great ideal and purpose of building a harmonious world. China should therefore establish the strategic objective to cultivate and enhance its own cultural strength as well as the overall and core competitive strength of the cultural industry, the specific vehicle for this strength. In connection with the currently deepening cultural restructuring, China should liberate cultural productive forces not only within the state-owned system and the publicity and culture system but also of the whole society. In other words, the liberation of cultural productive forces through cultural restructuring should not be confined to the system. Instead, we should define the value connotation and policy connotation of liberating cultural productive forces from the perspective of the whole society to establish a new strategic thinking and choice of the path of cultural restructuring while breaking through the limitations of the system. China’s cultural restructuring should fully reflect the strategic thinking and innovative principle of building a harmonious society and culture and should be closely combined with the cultural industry’s participation in the international cultural division of labor and the building of a harmonious world. On the basis of this combination, we can redefine new thinking on the strategic choice of China’s cultural industry development and new creations in the establishment of the cultural industry system. Only in this way can the

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development of China’s cultural industry provide strategic strength and diversified forms for the country to participate in international cultural strategic competition and build a harmonious world. To boost the development of China’s cultural industry in the context of efforts to build a harmonious world, we should understand the structure and liberation of cultural productive forces in a new way. It is vitally important to achieve balanced growth in cultural industry development. In developing socialist culture and building its cultural strength, China should focus not only on the local perspective but also on the international community. The quality of the people, democracy and the legal system, cultural and ideological progress, moral strength, and the cultural image of a country based on them cannot be established through the cultural industry alone. China’s cultural soft power and the national image formed from it are reflected more in the overall cultural quality of its cultural industry and its exchanges in the international community that manifest such a quality. While making every effort to develop the cultural industry, a broader cultural vision and strategic planning should be adopted to establish a system of it. In building a harmonious society and a harmonious world, we should make new breakthroughs in achieving the development and growth of China’s cultural industry and incorporate its global development into the overall development strategy. We should proceed from China’s entire system of institutions and social organizations, as well as the forces needed to participate in the reconstruction of the new world cultural order, and reform all the backward relations of cultural production and institutional barriers that are not compatible with it. We should formulate medium- and long-term development strategies and plans for China’s cultural industry and define its rights and obligations in actively participating in the international division of labor of the cultural industry. A sound regulatory system should be put in place to support China’s cultural industry as it tries to become more integrated into the global cultural market system. The establishment of an international cultural trade system with Chinese characteristics in which the government plays a central role and various social entities participate should be based on efforts to build a harmonious world. Without the support of such a new and comprehensive system, there is no way for the Chinese cultural industry to make creative achievements in the process of building a harmonious world. China is at a crucial stage of economic, social, and cultural transformation. Based on the lofty ideal of building a harmonious world, the country should enrich the strategy of going global

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culturally in developing its cultural industry. Bearing in mind the objective of taking an active part in the international division of labor system of the cultural industry, China should also promote the development of an innovative strategic system. 4. We should proactively create a new management system of core cultural strategic resources and combine the establishment of a cultural industry innovation system with Chinese characteristics with the great purpose of building a harmonious world Core cultural strategic resources carry the core cultural strategic interests of a country. China’s national interests have been globalized, and its core cultural strategic interests can be fully reflected only in a new and global allocation pattern of cultural strategic resources. In the context of the globalization of national core interests, it is necessary to ensure the cultural industry’s ability to participate in global action. In other words, China’s core interests in the cultural industry should be manifested in all aspects of the rebuilding of an international division of labor systems. This is a natural extension of the country’s strategic interests and the legal cultural rights that China should rightfully enjoy as a member of the WTO. To this end, we need to transform the management system of core cultural strategic resources based on a new idea of the development strategy for the cultural industry and combine the establishment of a cultural industry innovation system with Chinese characteristics with the great purpose of striving to build a harmonious world. We should look into the reasons for the current strategic predicament based on the preliminary experience of the strategy of going global culturally. With actively participating in the international division of the labor system of the cultural industry as a new strategic goal, we should strategically reorganize China’s existing core cultural strategic resources. The development of an industry hinges on system arrangements. The cultural industry is, above all, a system. System arrangements in the cultural industry, particularly those concerning market access and cultural product inspection, are closely related to the political system of a country or region and a manifestation of such a political system in the form of a cultural economy. China is committed to building a harmonious world and promoting democracy in international cultural relations. For this purpose, we must combine the establishment of a cultural industry

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innovation system with Chinese characteristics with the great purpose of striving to build a harmonious world. It is important to set up a sound and scientific cultural legal system that is adapted to such a great purpose, establish and perfect the cultural legislative process, and generate full details of the cultural legal system. China should gain international recognition for its cultural propositions through its own practices. An important part of further deepening its efforts of cultural restructuring, therefore, is to make active and scientific explorations to reform and innovate the management system of core cultural strategic resources by fostering a new idea of cultural development. Driven by major international projects in the cultural industry, the country should vigorously cultivate and encourage the establishment of cultural enterprise groups with a completely independent legal status and international strategic investment entities in the cultural industry. Thus, China can build the cultural soft power required in the strategic process of striving to build a harmonious world and help create a highly competitive international cultural environment that promotes the cultural prosperity and development of all civilizations. Cultural resources that have been concentrated and monopolized in the name of the market economy and reform should be returned to the market and society. Core cultural strategic resources, in particular, should be allocated in a way that is increasingly conducive to building a harmonious culture, a harmonious society, and a harmonious world. The great abundance of cultural wealth is a sign of cultural development and prosperity, which can be achieved only when a country or region is rich in locally produced cultural products. Without a plentiful supply of diverse native cultural products, China will not be able to meet the ever-growing spiritual and cultural demands of its people; there would be no equal dialogue between different civilizations and no spiritual drive and intellectual support for national strategic development, let alone the cultural soft power needed in the strategic competition between countries. To this extent, by proposing the great strategic purpose of striving to build a harmonious world, China has set basic tasks in its cultural work for a period of time in the future. More importantly, such a great purpose illuminates the strategic goals of the development of cultural industries in the future and is therefore a major historical mission that must be upheld for a long time to come. Since the beginning of 2017, China has adjusted its policy goal from building a harmonious world to building a community of a shared future for mankind, which will certainly carry the development of the relations between the country’s cultural industry and the world to a new realm.

CHAPTER 12

Conclusion: The Development of China’s Cultural Industry Stands at a Crossroads

As the infinite richness of China’s cultural industry unfolds, the complexities and tensions within it are also being further revealed. New problems have emerged as a result, bringing cultural industry development of the country up against new institutional obstacles and structural tensions. While posing new challenges to China’s development, the middle-income trap and Thucydides’ trap—a pattern of structural stress that results when an emerging power threatens an established one—are deeply affecting the future trend of development of the country’s cultural industry. Hence, China has to again redefine the role of the development strategy for its culture and cultural industries in enhancing its national cultural soft power and building itself into a strong socialist culture. After fifteen years of explosive growth, the development of China’s cultural industry has undergone profound changes as never before in terms of time and space and stands once again at the crossroads of changes.

1 Innovation: A Key Requirement for the Development of China’s Cultural Industry What is cultural innovation? What makes it possible? The difficulty of cultural innovation arises from human needs and human weaknesses. The great power of selfishness that guides innovation also hinders it. To whom should the achievements of cultural innovation be attributed? This

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question involves interest-based relations in cultural innovation. Under what circumstances will people innovate? Under what circumstances can cultural innovation be successful? Cultural innovation often emerges when there are no interests in the general sense at stake. Once it is used for the purpose of acquiring and distributing certain interests, cultural innovation will be monopolized, translating the creation of the many into the cultural power of the few. A hegemonic discourse emerges when a circle of cultural power is formed, excluding other discourses that do not accord with it. A new mechanism of cultural innovation will not be activated until the next production cycle of discourse begins. There are two kinds of cultural innovation cycles. One is naturally generated and depends on the needs of social evolution. It is characterized by a lengthy cycle and a slow process of self-renewal. Until this process comes to an end, the chain of intergenerational inheritance will not be broken. The other takes the form of violent revolution, blazing a trail for the generation of new cultural forms by smashing up the old world. There is a famous saying by Margaret Thatcher, the former British Prime Minister, that has been widely quoted in Chinese academia and by the Chinese media: China may export television sets to the world, but it does not supply the world with ideas.1 Iron Lady’s words were not 1 China will overtake South Korea to become the world’s largest supplier of TV sets in 2016, the Nihon Keizai Shimbun reported on December 7, citing a report by a Chinese research firm. It will be the first time that China has topped the global TV supply list. China is certain to surpass South Korea as the world’s largest TV supplier in 2016, Zuo Yanque, general manager of the brand center of China Market Monitor, a market research Institute, told the Global Times on Tuesday. This means the global television industry is quietly entering the Chinese era, he added. The TV supply of Chinese companies have thus far grown 12.5 percent year on year to 51.2 million units in 2016, increasing its global market share by approximately 4 percent to 33.9 percent, according to a new report released by Sigmaintell, a professional research and advisory company. In contrast, the global market share of South Korean companies is on a downwards trend, falling to 31.3 percent. South Korea’s television industry overtook Japan as the world’s number one in 2012 but has since lost momentum, while Japan’s market share has continued to shrink to 9.4 percent. China’s TV exports are strong and expected to grow 19 percent year-on-year to 32.4 million units in 2016, the Nihon Keizai Shimbun said, citing the report. Among them, TCL, Skyworth, Changhong, and other brands are constantly exploring overseas markets, making overseas acquisitions or setting up factories overseas. However, in terms of the global market share of individual brands, South Korean brands still take the top spot, with Samsung ranking first with 19.7 percent and LG ranking second, followed by TCL, Hisense, and Skyworth from China. Zuo told the Global Times on December 7 that China’s television industry no longer relies solely on small sales of complete sets as it

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short of contempt for China. However, inadvertently, she also expressed what the world expects from China: that the country should contribute its ideas to the world. In other words, China should supply not only television sets but also television programs to the world, contributing Chinese ideas to mankind and providing the ideological system and intellectual guidance that human civilization needs in its new process of transformation. This is what the human race expects of China as the world, having experienced the development of capitalism, encounters new difficulties in development and crises that defy solutions. Cultural industries are industries of ideas, and cultural markets are markets of ideas. Since the beginning of the industrial revolution, the capitalist mode of production has provided a complete set of systems, including a cultural product system, a cultural industry system, and a cultural market system, for the progress and development of human civilization. With the arrival of the postindustrial era, who will be able to provide mankind with a new set of systems that meet the historical and logical need of human civilization for transformation and development? The Thatcher statement has directed the world’s attention to China. In those eyes of contempt, we also see helplessness, hope, and expectation. The key to responding to this statement lies in whether and to what extent innovation can be achieved in China. The key to all innovation lies in the innovation of ideas, concepts, ways of thinking, and worldviews, all of which fall into the category of culture. Cultural innovation is the core of all innovations, manifested in cultural products and cultural industries. In this sense, the innovation of cultural products and cultural industries is of symbolic significance in that it represents the height achieved by a society in ideological and cultural innovation. It is to this extent that innovation becomes the soul of the development of China’s cultural industry. Without innovation, there would be no future for China’s cultural industry, and it will be stuck at the lower end of the value chain where we continue to supply television sets to the world. used to do twenty years ago. In the meantime, from the efforts made by BOE, China Star Optoelectronics Technology, and other panel companies in the upper reaches of the industry chain to break the ice, to targeting the international market in development, management, marketing, and branding by making use of the resources of partners, China’s television industry has gradually begun to adapt to global economic competition and technological competition, and continues to break the constraints on technological innovation and resources. (Source: “China will soon become the world’s largest supplier of TV sets,” Global Times, December 8, 2016.).

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There are two kinds of cultural industry innovation. One is the innovation of carriers and forms, and the other is the innovation of the content of cultural products. The former generates new forms of cultural industry, while the latter produces new content and resources for cultural development. The former is characterized by the features of technological development at the current stage and the constraints of time and space, while the latter boasts the attribute of sustainable development beyond time and space and the ability to regenerate cultural resources. Cine film has been replaced by digital media, but ideas and content remain the soul of films, without which there is no film or film industry. This applies to all other cultural industries. Therefore, cultural industry innovation is not one or two new weapons, although they sometimes contribute to a momentary victory on the battlefield. It is people who truly determine the success or failure of a war. The development of China’s cultural industry requires the modernization and postmodernization of equipment manufacturing and means of communication. Meanwhile, we need to inject cultural content into technology. Without culture, technology is merely a “TV without thought”. The cultural industry is a force. Its power is built by cultural products, the most basic element of the cultural industry, and achieved through the content of cultural products. This content is cultural content and spiritual content, which can touch people, inspire people, and offer spiritual satisfaction. From the perspective of the driving force mechanism of historical progress and development, such content can transform and create a world and promote the progress and development of human civilization. There is also content in cultural products that goes against history, humanity, and the progress of civilization, hence the need for cultural censorship. Cultural products containing the above content shall be prohibited from being published, broadcasted, and disseminated. The definition of what is against history, humanity, and the progress of civilization varies from country to country. However, it is a value shared by all countries in building their national cultural soft power to guide cultural industry development with such a content-oriented policy. An industry that does not create spiritual and cultural content is not a cultural industry. Only those made up of systems that produce cultural products containing spiritual and cultural content can be considered cultural industries. A publicly traded cultural company generates profits and nominal GDP through capital operations in the stock market. Nominal GDP does not produce content; only the GDP generated from the market value

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of cultural products or obtained from the transfer of copyrights leads to the creation of cultural and spiritual content. This GDP is a fundamental indicator of value for the cultural soft power of a country. The added value generated by the content of cultural products and its proportion in GDP are the real measure of the added value of cultural industry development and its proportion in GDP. Currently, the principal contradiction in China’s cultural industry is that the drawbacks of industrial civilization cannot be overcome or eliminated through industrial civilization itself, as GDP is a measure of value in industrial civilization. This is why the development strategy for China’s cultural industry should fundamentally shift from market orientation to value orientation. Otherwise, China’s contribution of ideas to the world would be empty talk, incurring nothing but scorn from the West. Why is China always calling for emancipation of the mind? Why is the mind never truly liberated? Knowing that the difficulty in emancipating the mind is an obstacle to China’s development, why not get to the root of this problem? All this indicates that the ideological and theoretical systems provided by our intellectual and ideological circles up to now do not suffice to provide a fundamental value orientation for China’s development. Values are based on faith. A nation lacking or bereft of faith has no clear values, and the only solution is to constantly liberate the mind. Such a liberation of the mind is therefore temporary and practical. Spiritual reproduction can be divided into simple, complex, and creative reproduction. The cultural industry is a combination of these three, with the core being creative reproduction. Cultural productivity focuses on spiritual creativity, without which there would be no innovation. Even the innovation of tools requires imagination and associative thinking. The focus of cultural restructuring should shift from transforming public institutions into enterprises to improving creativity. Without the improvement of creativity, there would be no cultural prosperity and development, not to mention cultural soft power. The whole world is talking about enhancing cultural soft power. What is the measure of the enhancement of cultural soft power? What is the definition of soft power itself? What is its essence? It is questionable whether cultural soft power can be enhanced if we still rely on Western standards and evaluation criteria. There is, above all, a conflict between the East and the West in terms of fundamental values. Socialist and capitalist values, as well as Chinese and American values, are essentially in conflict with each other. Tensions are unavoidable between the two worlds, especially in terms of

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their fundamental understanding of the nature of systems and values. To evaluate whether our cultural soft power has been strengthened with a value system that is utterly incompatible with our own will divert us further from the truth. The key to the internationalization strategy for our cultural industry lies in seizing bargaining power in negotiating for access to the international market of cultural products. Put simply, China should take the initiative in its negotiations with other countries over the international trade of cultural products. A case in point would be the negotiations between China and the United States over the introduction of American films into China. The introduction of cultural and creative industries has expanded the scope and increased the total GDP of cultural industries, but it has weakened the country’s ability to strengthen its overall cultural soft power. The change in the measure of value has led to a decline in our core competitive strength. The view that cultural products without economic benefits cannot generate social benefits is essentially advocating that the existence of narcotic drugs is beneficial or rational. A product will not generate profit or increase wealth if it cannot satisfy a certain consumer need. Meeting consumer needs is a prerequisite for growth in wealth. This is as true of spiritual products as it is of material products. However, not all products that satisfy consumer needs are legitimate. Narcotic drugs, for example, satisfy the needs of their users, but they are illegitimate. Such illegitimacy is not defined by the demand of the individual consumer but by the consumption demand of society. This is an important reason for global drug control. Even two governments that are politically and diametrically opposed to each other can join hands in the fight against narcotic drugs. This is a common moral issue of human society, rather than an economic or political one. The construction of cultural and creative industrial parks in China has a distinct meaning in deconstructing the existing cultural system. This is particularly prominent in the debate over the development model of the 798 Art Zone in Beijing. In the eyes of Western countries, the 798 Art Zone is an experimental park that embodies the idea of artistic freedom and artistic democracy and therefore subverts and deconstructs the original value system of China. The political significance of cultural industrial parks evolves from their nonpolitical significance, which is the rebellious nature of art. When this rebellion encounters the political reality of China, it becomes political.

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2 The Middle-Income Trap and Thucydides’ Trap: Two Major Threats to the Development of China’s Cultural Industry China is facing two major threats to its development: the middle-income trap and the Thucydides trap. The former is a threat to internal development resulting in a stagnant process of transformation, while the latter is an external threat caused by the clash of civilizations, which together constitute the country’s predicament in terms of development and security today. In the face of such threats and the resulting security risks, it is a question whether China’s cultural industry can remain immune. The amount of disposable income is closely related to people’s cultural consumption capacity and purchasing power. The so-called Engel coefficient, the percentage of total food expenses in total household or individual expenses, is a description of the cultural relation of such a capacity or power. Thus, the middle-income trap is not a purely economic problem but a systemic one that encompasses economic, political, social, cultural, security, and ecological considerations. If China falls into the middle-income trap, it would be highly unlikely for the cultural industry to see an upturn against the trend. Likewise, Thucydides’ trap poses a severe challenge to the development of Chinese culture and cultural industries. It cannot be assumed that the United States and the entire Western world will sit idly by while China’s cultural industry rises as a new force, with the rules of the world’s cultural market being rewritten by the country. The relation between these two issues and the development of China’s cultural industry has not yet aroused sufficient vigilance for us to carry out necessary research. We are caught deep in the “capital trap” and the “panentertainment trap” and even revel in it to some extent. Despite media attention given to the fact that China’s box office in the first half of 2016 was far below the level of the same period in 2015 and that the cultural capital market was sending a certain warning signal, expecting cultural consumption to boost economic development and growth remains the focus of cultural industry policies. Capital support is needed for developing the cultural industry, and people have every reason to enjoy a richer variety of cultural entertainment. However, financial support for the development of cultural industries does not represent the capitalization of cultural industries. Nor does having a wide variety of cultural entertainment choices mean that we have to “amuse ourselves to

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death”.2 Whether China can extricate itself from the capital trap and the panentertainment trap will to a large extent affect whether its cultural industry can overcome the middle-income trap and avoid falling into Thucydides’ trap. The design of cultural industry development in China must take into consideration not only the top level but also remote areas of the country. Imbalanced regional development is a basic reality of China. Despite constant and strenuous efforts to bridge the gap between different regions, it keeps widening. Regional competition in the market economy is making it even harder to strike a balance. While Beijing, Shanghai, Zhejiang Province, Jiangsu Province, and the Pearl River Delta are either overcoming or have already overcome the middle-income trap, the northeastern region lags behind with negative economic growth seen in some provinces. This is also the case with the cultural industry. The extent to which China is able to tolerate this imbalance will largely influence whether it can overcome the middle-income trap, as well as the timetable and road map for doing so. It is likely that some regions might be striding over the trap while others are still stuck in it. The Chinese way of overcoming the middle-income trap might divide the process into phases, regions, points, and belts, ultimately reaching the entire country. The cultural industry is deeply influenced and plays an important role in it. It is an important strategic task for China’s cultural industry to minimize the negative impact of the middle-income trap and seek a path of healthy development facing the dangers of such a trap. This is where China should not make any mistakes with disruptive consequences. As the product of globalization, China’s cultural industry encountered the challenge of postglobalization before it was fully developed. Today, it is losing the passion, impulse, and vision that it had fifteen years ago. The deep involvement of capital has deprived the cultural industry of its value standard before a system of soft power is fully built. It is now blindly entering the “postcultural industry era”. Although China has built a tangible form of power and acquired the ability to establish an order in the political, economic, and military spheres, it is far from being able to do so in the cultural realm. There is no doubt that the cultural industry has never been under tremendous pressure as it is today. Compared with its rapid development fifteen years ago, today’s cultural industry has had to build a form of power and acquire the ability to establish an order 2 Neil Postman, Amusing Ourselves to Death (Nanning: Guangxi Normal University Press, 2011).

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that is far beyond people’s imagination at that time. This should be the core objective and strategic driving force for the development of China’s cultural industry. Such an order of parallel development is giving rise to a new structure of driving forces and a new form of structural power for cultural industry development. We should reshape the structure and mode of governance of China’s cultural industry in such an environment of parallel development and competition to cope with a new era of global cultural governance and gain the power to build an order in this new structure of governance. This is a new mission for China’s cultural industry. China is already establishing its power to build a political and economic order. In the field of culture, however, it has failed to overcome the common predicament of development facing the world today by rebuilding a global order and reshaping the structure of global governance. This is an opportunity for China. The Summit of the G20 Heads of State and Government (G20 Summit) has indicated that China is capable of providing “Chinese solutions” and public products to the world. Cultural products are the most important public products in human society. One major reason why capitalist industrial civilization was able to give birth to giants when human civilization is in need of them is that the ideas created by these giants and the public cultural products provided by them offer publicness for the development of human civilization. The so-called power of discourse should include three aspects: the power to formulate political systems, economic pricing power, and the power to give cultural definitions. The power to give cultural definitions is of particular strategic importance. The most important question facing the world today is not who will govern it but who will define the governance of it. Similarly, it is not the concept of universal values itself that matters but the definition of universal values. Such is the key to the power of discourse. Therefore, China should not only contribute its own concepts to the world but also excel in giving its own definitions of concepts put forward by the rest of the world, especially the Western world, and make them universally applicable. The exposition of China’s understanding of human problems through the system of cultural products is a way for China to disseminate and share its wisdom with the world. This is a subtle approach with an incomparable advantage over political, economic, and military approaches. It is in this sense that China should make a greater contribution to mankind. This is what Mao Zedong expected and what China should strive for in developing its cultural industry.

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As Asia and the world adjust their strategies and policies in response to China’s rise, China must also adapt to its new role in the world and assume its responsibilities as a rising power. The success of the G20 Summit in China and the Chinese solutions proposed for a range of global issues are a sign of this. As the second largest economy in the world, China is reshaping the global economic pattern, overcoming the global economic crisis, and playing a major role in promoting the sustainable development of the world economy. The establishment of the Asian Infrastructure Investment Bank and the introduction and implementation of the “Belt and Road” strategy are driving the trend of reform for the global economic and political structure. However, China’s cultural industry is still indulging in the passion for market-oriented capital operation and has not been integrated into the profound transformation of national and international strategic needs. Although the strategic vision of the “Belt and Road Initiative” includes the strategic conception of the development of cultural industries and the concept of the “Belt and Road Cultural Industry Belt” has also been proposed, such a vision and concept have not yet been translated into action. Cultural restructuring and the market orientation of cultural development have led the cultural industry into a capital trap that poses unprecedented risks. Once all capital withdraws from the cultural industry, it will be plunged into a huge crisis. The immense temptation of capital will cause the cultural industry to abandon its ability and responsibility to contribute cultural content.

3 Shifting Cultural Power: “Heavy Is the Head That Wears the Crown” “Power shift” is a feature and theme of current international political changes. This is a question of world leadership that is causing an international debate over Thucydides’ trap, which then fuels a global panic about possible clashes between rising and established powers. At the heart of all the discourse and issues lies the relation between China and the United States. Various political forces are analyzing the possibilities of finding a way out of the Thucydides’ trap. However, there has been no analysis on the rise of Chinese culture and no analysis or discussion on the issue of Thucydides’ trap between rising powers and established powers in the field of culture based on this. This shows the cultural confidence of the Western powers that China’s cultural rise has not yet evolved to the point

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where it threatens and challenges their cultural hegemony and the recognition of this situation in the world today. This is another expression of the Thatcher statement. The shift of power from major Western countries to China has increasingly become a consensus within the international community and aroused actual fear and concern among traditional political powers. However, such a power shift has not yet presented obvious signs in the cultural industry. In other words, there is a mismatch between cultural development and the shift of power, to which China must stay highly alert. Adapting cultural industry development to the process of this power shift has become a prominent issue for the future strategic development of China’s cultural industry. This situation, if not approached effectively, is likely to seriously hamper China’s strategic process of power shift in the long run. The shift of cultural power is a far more complicated, profound, and lengthy process than a power shift in international politics. This process at a certain stage of development is often manifested as an imbalance between cultural and economic development. Rapid economic development and being a major economy do not make us a major cultural power by default, as it is harder to achieve cultural goals than to attain economic ones. The former will encounter the clash of civilizations and ideological containment, while the latter will be thwarted by trade barriers and Thucydides’ trap. This is why China, as the second largest economy in the world today, has not yet secured second place in culture. The formation of America’s cultural hegemony and the ensuing acquisition of cultural power are the result of a cultural power shift in the Western capitalist world, which is consistent with the shift of capitalist hegemonic powers. World War II disrupted this pattern, combining the reestablishment of a world order and rules with culture for the first time. As a result, the United States has achieved leadership not only in the economic and political affairs of the world but also in global cultural affairs through the postwar Marshall Plan in Europe and later the establishment of the WTO. Despite its withdrawal from UNESCO, the United States has, until now, defined international cultural rules. It is particularly worth noting that the possession of such cultural power by the United States is inseparable from its Hollywood way. Without Hollywood, there would be no American dominance in world cultural affairs. The United States opened the door to world culture through Hollywood and reshaped the rules of global cultural trade with it. Despite stubborn resistance from France with its

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principle of cultural exception, the United States, with its theory of American exceptionalism—that the country is unique and exceptional among all the nations of the world—possesses greater power to set up rules and give definitions in the realm of culture. Hollywood is by far the world’s largest cultural industry system, and few countries can escape its marketcontrolling power. China is no exception. It is based on the Hollywood system that the United States establishes its world cultural hegemony. Compared with Hollywood, China’s cultural industry is still in its infancy. It is impossible for the cultural industry to reflect the spirit, soul, and body of Chinese culture, let alone occupy a place in the shift of global power, if it is fed with insufficient local culture in its infancy. In that case, what China has will be incomplete power, fueled by an incomplete “Chinese dream”. The road to rejuvenating Chinese culture will remain a continuous and arduous “long march”, frustrated by constant encirclement and obstructions from all sides. It is in this sense that achieving the shift of cultural power becomes an essential strategic goal for the development of China’s cultural industry. In conclusion, the evolution, innovation, and transformation of China’s cultural industry stand at a crossroads, a crossroads of changes and opportunities.

Afterword

I have been working on this book for twenty years, from the publication of “China’s cultural development strategies at the turn of the century” in 1998 to the completion of “The development of China’s cultural industry stands at a crossroads” in 2017. It is a summary of my academic research into the cultural industry over the past twenty years and an account by a Chinese scholar as I bear witness to two decades of development of the theoretical research on China’s cultural industry. This is not a collection of theses in the general sense but an academic monograph centered on a core theme: the development of the cultural industry in China. The Chinese edition of this book consists of thirteen chapters, each covering one thesis. With the introduction and conclusion included, a total of fifteen theses and thirty-four topics are discussed. The book opens with an answer to what kind of a country we are bringing into the twentyfirst century and ends by proposing that the development of China’s cultural industry stands at a crossroads of changes and opportunities, covering topics such as the emergence of the cultural industry in contemporary China, the cultural industry strategy of China, and several strategic relations involved in the modernization of China’s cultural industry. From the perspectives of theory, policy, and strategy, a series of major, basic, and frontier issues concerning the development of China’s cultural industry have been tracked and studied in the book. It records the course of development of China’s academic research on the cultural industry over the past twenty years through the lens of one person, depicting the Chinese academic scene in the cultural industry in a panoramic way. On this basis, © Social Sciences Academic Press 2022 H. Hu, The Development of the Cultural Industry in China, China Connections, https://doi.org/10.1007/978-981-19-3355-4

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the English version has been rearranged to include nine chapters plus the introduction and conclusion, making a total of eleven chapters. In 1993, I was put in charge of the discipline construction project for the “Department of Culture and Art Management” in Shanghai Jiao Tong University (SJTU), where I work. I had the opportunity to fully participate in the creation of the first Department of Culture and Art Management (later renamed “Department of Cultural Industry and Management” according to the catalog of undergraduate courses of general higher education issued by the Ministry of Education) in China and served as the first head of the Department of Cultural Industry and Management. In 1999, the Ministry of Culture of China and Shanghai Jiao Tong University jointly established the “National Research Base for Cultural Industry Innovation and Development”, and I was appointed the project executive. Thanks to this project, which has provided me with excellent conditions, I have been engaged in the combination of discipline construction and academic research in the cultural industry for twenty consecutive years. I would like to take this opportunity to express my special thanks to Professor Xie Shengwu, former President of Shanghai Jiao Tong University, Professor Ye Quyuan, former Executive Vice President of SJTU, and Professor Zheng Chengliang, former Vice President of SJTU, for their trust and support. My heartfelt thanks also go to Mr. Wang Yongzhang, former Director General of Cultural Industry, Mr. Liu Yuzhu, former Director General of Cultural Market, and Mr. Han Yongjin, former Director General of Education, Science and Technology, of the Ministry of Culture of China. In addition, I have received strong support from many of my fellow scholars, whose academic cooperation and exchanges are one of the important sources of motivation for my academic research. Here, I would like to introduce the names of these fellow academic friends of mine, who are Zhang Xiaoming, researcher at the Cultural Research Center of the Chinese Academy of Social Sciences, Zhang Jiangang, researcher at the Department of Aesthetics of the Institute of Philosophy of the Chinese Academy of Social Sciences, Professor Jin Yuanpu of Renmin University of China, Professor Shi Weida of Yunnan University, Professor Yin Hong of Tsinghua University, Professor Qi Yongfeng of Communication University of China, Mr. Chen Xin, President of Shanghai Century Publishing Group, and Rong Yueming, Director of the Institute of Literature of Shanghai Academy of Social Sciences.

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Many chapters in this book have been published as research papers in Chinese journals such as Academic Monthly, Journal of Social Sciences, Journal of Shanghai Jiao Tong University (Philosophy and social sciences), Journal of Shandong University (Philosophy and Social Sciences), and Journal of Central China Normal University (Humanities and Social Sciences). I am particularly grateful to Mr. Xia Jinqian, Executive Associate Editor-in-Chief of Academic Monthly, and editors of all the other publications. The Chinese edition of the book was published by Social Sciences Academic Press in 2018. Marking the occasion of the publication of the English edition, I would like to express my appreciation to Ms. Chen Ying, the executive editor, for her hard work, as well as to the English translator and editor in charge of this book. This book would not have been possible without their dedication. Hu Huilin. February 8, 2019. Shanghai.