Cultural
Revolution, Post-Mao
FROM PUBLISHING
TRENDS (FEBRUARY 2003)
Stroll
through Shanghai’s “Book City,” a four-story goliath
crammed with titles on a surprising breadth of subjects,
and you’ll notice something big is happening in the
land of Mao’s little red book. As the Chinese government
makes unprecedented moves to loosen its grip on book
retailing and distribution — working to satisfy obligations
under China’s 2002 entry into the ranks of the World
Trade Organization — opportunities for foreign investment
are being flung open in the world’s most populous nation
with a brazenness free-marketeers could barely have
imagined two years ago.
The great Chinese bookstore grab got its official green
light, anyway, at last month’s Summit of Book Publishing
in Beijing, where Niu Bingjie, Deputy General
Director of China National Press and Publications
Administration (NPPA), announced that China will
open the book retail market in over 30 cities to foreign
investment beginning this year, with detailed regulations
on the matter expected shortly. As a consequence, says
Wei Zhao, Random House Sales Manager for
China, “Barnes & Noble can open up a bookstore
in China if it chooses to do so. Both non-publishing
industries in China and foreign investors will be allowed
to invest in privately-held book retailers.” With bankers
and co-venturers lining up at the gates, the Chinese
book market — already subject to constant turmoil for
the last three years — is quite likely headed for even
more sweeping contortions. “As China enters into a second
year of WTO,” Zhao predicts, “2003 could be pivotal
for book distribution.”
To date, however, the Chinese bookselling terrain is
virtually terra incognita to foreign investors. Though
ownership of bookstores has been allowed on a trial
basis since last June, the sale of foreign books, including
those published in Taiwan and Hong Kong, is “still restricted
to the [state-owned] Foreign Language Press bookstore,”
according to Luc Kwanten, Executive Director
at the Shanghai office of Big Apple-Tuttle Mori.
And so far, no foreign bookstores have set up shop in
China — though rumor has it that Shanghai and Beijing
may soon be the latest outposts of leading French book
and music retailer FNAC, which has already planted
its flag in Taipei.
What is known about Chinese book retailing amounts to
this: In major cities with a population of more than
10 million, there are two primary forms of state-owned
retail outlets: the “book city” (a building of three
to five stories, portions of which are rented out by
individuals as well as publishers), and the “book center”
(owned by either a state-run or private corporation
which offers large retail spaces for goods such as books,
music, and art supplies). Add to that 57,000 privately
owned bookstores, which amounts to about four times
as many as the state-owned bookstores. This process
of liberalization has helped to gradually erode the
state-owned Xinhua Bookstore Chain monopoly,
which itself has drawn the ire of publishers, who have
been forced to negotiate distribution deals with individual
Xinhua bookstores in major cities. The Xishu Book
House, in particular, has seized enough turf to
become the largest privately held national bookstore
chain, and is said to be the “first-choice bookstore”
for many readers in some smaller cities.
Cracks have opened in the nationwide distribution system
as well. The state-owned Xinhua network has been challenged
by so-called Second Channel distributors, who emerged
with the government’s efforts to liberalize book distribution
in the 1980s. Consisting of independent booksellers
and distributors operating under a market economy, the
Second Channel allows for returns of unsold copies of
books to publishers. These wholesalers and retailers
account for about 30% of annual total book sales in
China, but the limited regional scope of Second Channel
distributors — coupled with the fact that they have
no access to China’s real cash cow: textbooks — has
put many of them out of business. Even so, such competition
has spurred the sluggish Xinhua to beef up its operations,
as most publishers prefer to deal with Second Channel
firms due to their more agile maneuvering among the
nation’s topsy-turvy market conditions.
Harry
Potter Does Beijing
As
it slowly grinds its way toward privately operated book
distribution, China is clearly looking to the US for
guidance. Credit Robert Baensch, Director of
the Center for Publishing at NYU, for
providing at least a crash course in modern publishing.
Under Baensch’s tutelage, NYU has offered six seminars
for groups of 30 Chinese booksellers and publishers,
ranging widely over the nuts and bolts of bookselling
and distribution, and including visits to both Ingram’s
and publishers’ distribution centers. Baensch (who is
also editor of the forthcoming book The Publishing Industry
in China) cites Chinese news reports indicating that
20 new measures are expected over the coming year “to
create an amiable legal environment for the growth of
the nation’s media and publishing sector.” The 60 or
so overseas companies that have set up offices on the
Chinese mainland with the intention of investing in
the distribution business, reveals Bingjie in a Xinhua
News Agency article, “are likely to be the first
to have their applications approved.” Those who have
cooperated closely with their Chinese counterparts obviously
stand the best chance of getting a foot in the market.
Of course, the most exciting news from last month’s
semi-annual Beijing National Book Fair, says
Baensch, was word that Harry Potter V would be
available in June (igniting much euphoria, as last year
1.3 million copies were sold of a special four-volume
boxed set of the Chinese Potter edition). Other bestsellers
in translation included the ubiquitous Who Moved
My Cheese? and the globally appealing aphorisms
of Jack: Straight from the Gut.
Indeed, the case might be made that the West has already
colonized the hearts and minds of the Chinese bookselling
trade, with foreign behemoths like the Shanghai Bertelsmann
Book Club trumpeting a membership of more than one
million, and high-profile magazine launches from Hearst
and Primedia bringing Cosmo to the post-Mao
masses. But industry rumors have it that the Bertelsmann
club’s days may be numbered, and Chinese news reports
say that Bertelsmann is shifting focus to radio and
TV broadcasting in the region. And Chinese officials
say that regardless of foreign bookselling deals, “there
will be no opening up of the editorial or publication
side of the industry.”
Then again, the headlines tell us China is the world’s
“fastest growing major economy,” the government has
opened the sluice gates to 92 new printing companies
with $55 million in foreign investment, and 91,000 new
titles were published there last year. Set your controls
for the 10th Beijing International Book Fair,
on May 19–23, and see the bookselling revolution for
yourself.
©2003
Publishing Trends
