 Prof Danlin Li Director, Centre of Media Law and Policy, Communication University of China Oxford 15 th June 2012

 The three phases of reform in China’s culture/media law and policy  The evolution of China’s cultural media policy in the new century: A review  People.cn Co., Ltd: Background, recent IPO and its implications  Some thoughts on the reform of China’s culture/medial law and policy in future 2

 This paper investigates the reform and evolution of China's culture and media sectors, especially the process they have gone through and the problems they have faced.  In particular we discuss the implications of the successful IPO of People.cn Co., Ltd on the reform and evolution of China's culture and media policies. 3

Three phases of reform in the culture/media sector since China’s adoption of economic reform at the end of the 1970s:  1978—1992: recognition of cultural market and escape from political dominance  1993—2000: differentiation between non-profit making and profit making entities in the cultural industries  2001—2012: further development of the cultural industry based on marketization and corporatization 4

The relationship between culture and media in the Chinese context:  Cultural industry ： Culture and its related industries are defined as those (business) activities to provide the general public with cultural, entertaining products and services （ based on the official “Notice on the categorization of culture and its related industries” by the State Statistics Bureau of China in 2004)  Cultural industry is divided into core cultural industries, peripheral cultural industries, and related cultural industries.  Media industry is at the core of cultural industry, including: news & publication, broadcasting and Television, internet and film etc. 5

 The relationship between culture and media industry is like the whole and its part  Cultural system reform is entwined with the reform of media system. This is because media is very special and critical to the political life of any country.  Media as part of news broadcasting is more concerned with not only cultural system but also, maybe more, political system. 6

Policies developed since the beginning of the new century:  In 2001, the CPC Central Committee and State Council Office approved "Opinions on reforming news publication, broadcasting, film and television industries by Central Propaganda Department, the State Administration of Radio, and the Administration of Press and Publication".  In the 16th National Congress of Communist Party of China (16th NCCPC) 2002, the field of culture and media has been divided into public non-profit making and profit making categories, which extended the understanding and practical implementation for further reforms.  In October 2003, the Third Plenary Session of the Party's Sixteenth National Central Committee approved the decision on improving socialist market and economic system, and proposed to promote the coordinated development between cultural affairs and industries. Press and Publication Administration issued a programme on the implementation of the news publishing system reform. 7

 In September 2004, the Fourth Plenary Session of the Party's Sixteenth National Central Committee approved the decision on strengthening the Party's ruling capacity and proposed the idea of cultural restructuring, liberation and development of cultural productivity.  In December 2005, the CPC Central Committee and State Council Office issued "Opinions on promoting the reform of cultural system" which contributes to the development of cultural system. The government will support Party's newspapers and journals, radio and television stations, news agencies, news websites, current affairs newspapers, and a few institutions which have political or public welfare publishing responsibilities. Other publications, newspapers and magazine presses should be transformed into enterprises gradually.  In the 17th National Congress of Communist Party of China (17th NCCPC) in October 2007, it was proposed to improve the building of socialistic culture, enhance the soft power of national culture, and promote the development and prosperity of socialist culture, in accordance with the view of socialism with Chinese characteristics and "Four in One" strategic framework. 8

 In June 2008, Press and Publication Administration proposed the strategic "three-year three-step" plan¹, paving the way for transforming business-oriented publication organizations to real enterprises.  On February 19, 2009, the Political Bureau of the Party’s Central Committee issued "Opinions on promoting the institutional reform of central government departments and units", and established leading groups with responsibility of reforming the central departments and units. In April, the State Press and Publication Administration issued guidance on further structural reform in the press and publication sector. On the 22nd September, the Central Office for Overseas Publicity issued the plan of restructuring key news websites into enterprises. So far, the programme of transformation and the IPO of so- called "official websites" has been listed on the agenda. At the same time, China's first cultural industry plan, named "Cultural Industry Promotion Plan", has been proposed and adopted by the State Council executive meeting. 9

 In April 2010, a guidance on revitalizing and supporting the prosperity of financial and cultural industries has been jointly issued by nine ministries, including the CPC Central Propaganda Department, the People's Bank of China, the Ministry of Finance, the Ministry of Culture, Administration of Radio, Press and Publication, CBRC, CSRC, and CIRC.  In April 2011, the State Council Information Office issued "Opinions on promoting transformation and IPO of news website". In May, the CPC Central Committee and State Council issued "Opinions on promoting transformation of non-political newspaper publication institutions". On October 16, the Sixth Plenary Session of the Party's Seventeenth National Central Committee made the decision on restructuring and promoting cultural development and prosperity. 10

The traces of government policy development  Differentiation between profit making and non profit making  Corporatization of profit making organizations  Allowing more organizations to be corporatized in much wider business lines within the media industry  Encouraging the establishment of business groups  Selected firms to conduct IPO for access to capital market 11

Value orientation of the latest policies  “Efficiency” ： ethically acceptable, primary value orientation  “Order” ： fundamental value, more important when there is a clash between efficiency and order  “Fairness” ， reflection of citizen rights protection, Cultural and media industry policy has swayed between efficiency and order 12

Review: There has been a huge progress in the media industry given that the media sector can hold different views, and that citizens can enjoy the freedom of expression on internet. Overall, media becomes more important and can contribute to the protection of citizen rights by monitoring legislative, executive and judiciary bodies Hence, the policies and legislations for media reform based on efficiency orientation have promoted the economic performance of the cultural industry and strengthened its international competitiveness. 13

Review: Although the Chinese government has been much more open and rational in the recent past, it does not indicate that the protection of citizens’ fundamental rights has been the primary consideration in handling social conflicts. 14

Existing problems: 1. The irrationality of content control system 2. The unlawfulness of the authority of content control organizations 15

Existing problems: 1. The irrationality of content control system On one hand, over strict in content control; too many permission requirements, authority check, screening before publication etc. On the other hand, absence of relevant rules and relaxation or non-existence of checks on vulgar and violence contents 16

Existing problems: 2. The unlawfulness of the authority of content control organizations - Too many content control authorities - Lack of effectiveness in administrative proceedings - Absence of constitutional litigation - Randomness in legislation and policy making 17

Explanations for the existing problems 1. The traditional Chinese value of “wen yi zai dao” (articles are there to teach principles and virtues) hence government has a duty to intervene in content control to make sure all media contents are in accordance with disseminating principles and virtues 2. The revolutionary logic and rationale from revolutionary wars and struggles against non-revolutionary thinking 3. Lack of democratization in existing political system 4. Low professionalism in social management 5. Widespread mentality of the Chinese society regarding government officials and ordinary people (i.e., officials can manage ordinary people) 18

Basic information regarding Peole.cn  “Peole.cn” i.e., Peole.cn Co, ltd, previously named People.cn Development Ltd, was established on 6 th February 2005 by People’s Daily Newspaper Press, Global Times and Zhongwen Assets Management Ltd. In June 2010,  In June, 2010, it became joint stock company Limited with main shareholders including: People's Daily, Global Times, Jinghua Times, Automobile News Paper, China publishing house, China Film Group and the Eastern Media to form the new company with a registered capital of yuan approved by the Ministry of Finance 19

The political and economic privileges enjoyed by People.cn Co., Ltd  Exemption of corporate tax for four years.  Controlling shareholder gained profit even though no income ever recorded.  The specialness of its clients – its largest client is the Ministry of Finance  It has over 130 journalists on its pay book, which other news websites or commercial sites cannot match. Hence, the revenue of People.cn Co., Ltd comes from preferential policies, government support and monopoly. 20

The policy breakthrough and possible implications of the IPO by People.cn Co., Ltd  The IPO and listing in the stock market by People.cn Co., Ltd has the obligation to disclose information by law, which will promote the transparency in the control of media sector.  Content editing is part of the business that People.cn Co., Ltd brings with it to the stock market listed company. This is a breakthrough for content control.  People.cn Co., Ltd as a stock market listed company has clear cut ownership structure. This is in contrast to the blurred ownership concept in traditional media entities. 21

Queries and different views on the IPO of by People.cn Co., Ltd 1. An arrangement for People.cn Co., Ltd to seek capital for fast expansion according to the call of national cultural development, prosperity and the corresponding political concept. 2. Business principles have to dominate. How can a media firm develop and grow to truly create public space for democracy and law society? 22

Queries and different views on the IPO by People.cn Co., Ltd - Being naïvely optimistic - - Vulgar political correctness 23

 We cannot think China will adopt the system of protecting press freedom and citizen's freedom of expression, and public interests will become the primary goal of media management and control.  The listing of People.cn Co., Ltd in the stock market is a result of the confrontation between commercial appeal and special political target, which has a positive role in relaxing strict control system in use for media and promoting institutionalization of media management and control.  We still cannot see the words like "public interest" to appear in our existing legislation, policy and variety of related documents. 24

 On one hand, efficiency has continued to be the top priority of legislation and policy making;  On the other hand, insisting on content control to ensure order will still be at the core of the current system.  The IPO and listing of People.cn Co., Ltd will not be repeated by other key news websites.  Protection of citizen’s basic rights, public interests in line with the requirements of a democratic society, will gradually become a key target of cultural media legislation and policy development. However, this will take a long time to achieve. 25

 Thank You 26