China consolidates print media
By Anthony Kuhn Posted Fri, Dec 1 2000
In a landmark step for China’s economic reforms, Beijing has launched a major consolidation of the official press, targeting both unprofitable official publications and politically wayward tabloids.
Official documents in recent months have banned Communist Party and government departments from publishing newspapers, eliminated government subsidies to the remaining papers and forced the closure of papers with daily circulation below 30,000. In China, where every media outlet is owned by the government, most government departments publish their own newspapers focusing on the developments in their respective fields.
“The use of administrative measures to control the number of papers will probably continue through 2002,” predicts government media analyst Simon Zhang.
The consolidation is closely tied to China’s overall gradual transition to a market economy, including efforts to trim the bureaucracy and separate its administrative functions from its business ventures.
With China’s expected admission into the World Trade Organization, companies in most industries are streamlining and merging to meet the challenge of oncoming foreign competition.
Although the media market is not open to foreign investment, newspaper owners at least consider it a possibility, says analyst Zhang. “It means they’re already feeling market pressures.”
As part of the consolidation, newspapers run by lower-ranking government bureaus and local governments are being forced to join leading official papers and their conglomerates, or face closure. This appears to be an extension of Beijing’s strategy to allow less profitable party papers to merge with conglomerates with more financially successful newspapers.
Therefore, for most state-owned newspapers, consolidation has ended not in closure, but in searching for and negotiating with new official or quasi-official patrons. China does not allow privately owned newspapers, and all papers must have some nominal affiliation with an official entity. So, for example, the State Tourism Administration’s paper, the Tourism News, shifted its affiliation to the Tourism Industry Association, which is also an official entity but isn’t counted as a government department.
People’s Daily, the mouthpiece of the Communist Party and already a conglomerate with several dozen publications under its aegis, has acquired papers ranging from the profitable China Automotive Daily, formerly run by the Machine Industry Bureau, to the moribund Coal Information News, which was in debt and down to six staff members. The popular China Women’s Daily, meanwhile, has absorbed the State Seismological Bureau’s China Disaster Prevention News, replete with earthquakes, shipwrecks and fires.
It is not clear how many newspapers have been merged or closed in the shakeout. Under the economic reforms of the late leader Deng Xiaoping, China’s press saw explosive growth, going from 186 newspapers in 1978 to a peak of 2,202 in 1996. There were 2,038 newspapers by the end of 1999, according to official statistics.
Much of the culling has occurred in the first half of this year. Yu Guoming, head of People’s University’s Public Opinion Research Center, estimates there are now some 1,800 newspapers left. The official Caijing (Finance And Economy) magazine recently reported that the consolidation has affected some 800 small and medium-sized newspapers, or roughly a third of the industry.
At the same time, almost all internal-circulation papers, which are produced and consumed by individual government departments, have been eliminated along with some 400 out of more than 8,000 periodicals.
The consolidation is intended to save the equivalent of a billion U.S. dollars in government subsidies for official newspapers and compulsory government subscriptions. The papers are a holdover from China’s centrally planned economy, in which each government agency’s and party organization’s newspaper served to employ bureaucrats’ dependents and act as a showcase for its leaders’ pronouncements.
On the streets of China today, nobody buys these propaganda-heavy papers with their own money. For example, the circulation of People’s Daily dropped from 6.2 million in 1979 to two million in 1999. In the meantime, a colorful array of newspapers competes fiercely for readers’ attention and money, offering news about stocks, entertainment, sports, fashion and consumer goods.
Media bosses say that the shakeout is targeting smaller papers not just for economic inefficiency, but for failing to toe the Communist Party’s political line. Propaganda officials commonly rail at tabloids for failing to “correctly guide political opinion” as well as for serving up sensational coverage of sex, violence and vulgarity. Observers say bringing the press to heel is on the agenda for the run-up to the 16th Communist Party congress in 2002, which will select successors to Chinese President Jiang Zemin and Premier Zhu Rongji.
Still, analysts point out that, due to basic economic factors, the number of newspapers is unlikely to see further, drastic declines despite the government’s effort to downsize the industry. The newspaper market in general is just too profitable, especially for publications focusing on human-interest, or in many cases, sensational stories.
According to Yu Guoming, the annual rate of return for Chinese newspapers between 1988 and 1998 ranged from 17 to 50 percent. Government licenses to run newspapers are a controlled commodity that few willingly give up. This in turn allows existing newspapers to charge high prices for limited advertising space.