Reshaping Chinese New Media Institution Starting from Restructuring of Broadcasting Sector

Reshaping Chinese New Media Institution Starting from Restructuring of Broadcasting Sector
by HU ZHENGRONG & Research Fellow
The “conglomeration” of China’s radio and television sector since the late 1990s is essentially different from the concept the term is usually adopted in media industry. Radio and television groups, under the model “single system, dual operation”, which is characterized by state ownership and operating with state funding and advertising revenue, are more of a kind of transitional system in the media transformation than as a fixed system in the long run. The current restructuring of radio and television groups and the re-positioning in their attributes and functions are based on the restructuring of relations between government and media, and are in-depth development of “conglomeration” reform. The process of restructuring government-media relations should follow the rule of media, and consider China’s context. The ultimate goal is to build a new media system of China, with government and media as public service units and with media groups as enterprises playing their respective functions and roles.

Key words:
Restructure, conglomeration, government, media, public service unit (shiye danwei), groups

At the National Conference of Radio, Film and Television in December, 2004, the State Administration of Radio, Film and Television (SARFT) explicitly stated that it would no longer give permission to the establishment of radio and television groups as public service unit groups (shiye jituan 事业集团) since then except that they are positioned as enterprise groups (qiye jituan 企业集团). It is because the radio and television groups as public service units, consisting of radio and TV stations which are seen as mouthpiece, are likely to be confused with the common concept of commercial groups. The SARFT announced that it will only give permission to radio, TV stations as public service units or general stations (zongtai 总台)in the future. Radio and television groups as public service units that were established in the past will be turned into general stations, and be stripped off operational assets to form new enterprises or groups, if they had to retain the attribute of public service unit. In the first half of 2005, the work of stripping-off between media outlets and media business operations such as production, distribution and so forth was launched gradually. At present, Beijing Radio and Television Group has by and large completed such disjuncture and restructuring, while the same is beginning to take place in other local radio and television groups. Notably, the same period witnessed the de-conglomeration of China Media Group (CMG), which was established in December 6, 2001 and had not undergone successfully enough. And the ever biggest broadcasting group in China was ultimately dismantled in June 2005. The stripping-off and restructuring, though low-pitched to the outside, has invoked severe wave and drawn spectacular attention inside the Chinese broadcasting institution. The notion of “conglomeration”, which has been underway for some six to seven years, is catapulted into public attention.
What’s the future of “conglomeration” of China’s radio and TV media? Does the restructuring and adjustment of the attribute, public or business, and functions of “radio and television groups” reflect the change of the situation of conflicts between political interests and economic interests? And what changes will be on the relationships between government and media?

I. Background & Reasons of Restructuring Government-Media Relations

Reasons for the de-conglomeration and restructuring of broadcasting groups are mainly as follows:
First, there are great, or even fundamental, differences between “conglomeration” launched in China’s broadcasting sector since late 1990s and that in the western media sector.
Since 1980s, conglomeration has been a main tendency of the transformation of radio and TV sectors in western developed countries. International media companies adjusted development strategy. By capital operations such as market annexation and purchase and with the goal of profit maximization, they established comprehensive and multiplex media groups, which prove to be highly competitive and influential domestically and even around the world. This is because, in the relatively mature market economy in the western countries, the scale of groups plays the extremely vital role in market competition. It is worth mentioning that, in western developed countries, media annexation and purchase fulfilled in the market, similar to that in other sectors, is safeguarded and restricted by economic laws and regulations, such as the Company Law and Anti-trust Law. These powerful safeguard mechanisms and restriction measures ensure necessary intervention and limitation on the problems which are possible to appear in the media sector, such as over-concentration of property rights, so as to protect the equal competition of market players in the development of media sector and push forward healthy transition of the media industry.
However, China’s radio and television conglomeration process is not operated under a market mechanism. Instead, it is by powerful administrative means to “knead” radio, film and television outlets and companies together. The primary and ultimate objective of the “conglomeration” is to strengthen government’s control over media to realize the media’s propaganda function well. Therefore, to some extent, the establishment of broadcasting groups then was concerned more about exercising better control over media and balancing administrative interests of all “kneaded” parties than about pursuing profits. “Conglomeration” which has already been launched seems more like a kind of re-allocation of power and interests, rather than restructuring of assets. The groups, which were hastily established in an environment highly protecting monopoly but not in the market environment encouraging competition, are only on a large scale in appearance, but lack the competition, as well as the increase of actual competitive capability of media groups and the healthy transition of the media industry brought by the competition. If the western media groups are “aircraft carriers”, China’s media groups are just “ships-in-chain”, which are formidable on the surface but in fact their carrying capacity and emergency capacity have not been strengthened, as various parts of the groups impede one another. Obviously, if China’s media “conglomeration” reform doesn’t go deeper as soon as possible, when more overseas media groups incrementally enter China’s market, the “ships-in-chain” would be burned down if fire broke out.
Second, China’s media structure characterized by “the administration structure” within the current political context assumes more of an administrative structure than industrial structure. It is a “Four-tier media structure”, which is entirely in accordance with Chinese government administrative structure, from national, provincial down to city and county. Although this media structure has been changed to three tiers and the “county” tier has been removed since 2000, it still severely restricts the further development of media industry.
During the reform of the media sector from late 1970s to late 1980s under the social circumstance of bringing order out of chaos after the Cultural Revolution (1966~ 1976), two of media policies have exerted profound influence. One was issued at the end of 1978 when eight media organizations, including the People’s Daily, jointly filed a report to the Ministry of Finance proposing the principle of “media organizations featured as public service units, by managed as enterprises”, and then the Central Propaganda Department of the CPC issued in 1980 the “Notice on Publishing and Broadcasting Foreign Commercial Advertisements on Publication, Radio and Television”. This policy allowed mass media to adopt business management as enterprises and to restore advertising services and diversified businesses. It has laid foundations for media to enter the market and participate in the business operations. And it also epitomized the beginning of commercialization of Chinese media system. Advertising revenues have become the basic source of financing for all Chinese media since then.
The other was the 37th document of the CPC Central Committee in 1983, proposing the principle of “Four-Tier Operation of Radio and TV and Overlapping Coverage” (allowing radio and television stations to be set up at national, provincial, city and county level), which formed the fundamental structure of China’s broadcasting sector, with features of public service unit (shiye). All broadcasting outlets are administrated by radio and TV administration departments of governments at four different tiers. Press and publication sectors, meanwhile, followed the same pattern. This policy spurred “the great leap” of Chinese broadcasting sector, and triggered the proliferation of broadcasting outlets at four tiers, increased radio and TV coverage and the diversity of broadcasting programs. However, it impedes media resources allocation, restructuring and interests’ distribution through market mechanism. From then on, political interests from central and local governments and economic interests from various interest groups started long-term conflict in the media sector.
During the past more than 20 years since 1978 when the media sector began recovery, from “Four Tier” to “Three Tier” (merge broadcasting outlets at county level into the provincial and city levels), from the old rules, which prohibited non-broadcast and non-publishing organization of all levels from participating in the set up of radio, TV stations and publishing houses and also prohibited radio, TV stations and publishing houses from foreign investment, Sino-foreign joint ventures and cooperative businesses, to recent regulations, which proscribe that setting up media outlets and producing broadcasting programs should be authorized by the State Council’s radio and television authority, and that setting up TV drama production entities or enterprises should also be authorized by the State Council’s radio and television authority and get license…[1] it is in fact the government who has always decided the number of media outlet and the scope of operation of media entity rather than market mechanism through which consolidation and effective resources allocation can be launched. The government-pushed integrations, including the establishment of radio and television groups, are characteristics of planned economy. And this kind of conglomeration has been restricted by administrative boundaries of a province or a city due to the current government-led broadcasting structure. The media groups are usually not able to run cross-media and trans-regional business, or even news-reporting. Though the policy issued in 2001 permitted and encouraged trans-regional, cross-media and cross-sector media groups, the practices are mostly following the basic broadcasting structure formed in 1983, which has been disjunctive by ascending departmentalism and localism in China from then on. This has resulted in problems such as media resources allocated according to departmental and local interests, unreasonable industry structure, market separation, and insufficient market competition.
The paradox is that media groups still play the dual roles of being simultaneously the administrator and producer since most of them have consolidated prior broadcasting administration organizations of government and radio/TV stations. Governments of all levels rather than media outlets act as the leading role of media operations. Media groups, under the guidance of “media organizations featured as public service units, but operated as enterprises”, operate under the system of the CPC-led management committee, and are legal persons of public service unit rather than legal persons of enterprises. This system confines media participating thoroughly in market competition. The practice of the guidance of “media organizations featured as public service units, but operated as enterprises” is not as easy and smooth as the words being. The process of integrating resources through capital and supply chains and establishing multi-media and trans-regional media group is also not as rapid as expectations. Under such circumstances, clarification of the relations between government and media, and re-positioning and re-functioning of media groups become the precondition for real trans-regional and cross-media restructuring efforts in short run.
Third, it is correct that Chinese media reform follows the direction of “conglomeration”, but in practice it gradually drifted apart from the direction.
The media “conglomeration”, launched in the late 1990s, has brought out limited increase in the strength and the vigor of the media sector, after several years of practice. Its consequences are not as good as what had expected before. Some people, therefore, began to question the exploration of China’s media conglomeration during the past several years.
It should be admitted that the launching of “conglomeration” was based on its background and realistic demands. On the one hand, the “Four-Tier” broadcasting system, which initially set to arouse the enthusiasm of government of all levels and to raise the population coverage rate of radio and TV media, showed some negative effects. By the late 1990s, there had been excessive radio and TV stations, each doing things in its own way with repetition in program contents. It will cost huge wastes of resources if not integrating them. The radio and television groups with political privilege have been accustomed to harvesting short-term economic profits brought by their political power, and become less and less competitive in the market. On the other hand, the upsurge of consolidation in the international media market in 1990s has encouraged large transnational media groups to extend the overseas market, while China’s entry into the WTO has created a more open domestic market. China’s media sector faced unavoidable aggressive competition. But at that time, China’s media were just “sampans” compared with foreign media “aircraft carriers”, and were unable to compete with them at all. Therefore, restructuring and integration of the radio and TV sector was launched in 1998, and “conglomeration” became the solution to the problems. “Conglomeration” had to be fulfilled by “kneading” of the government administrative forces instead of by market mechanism, while the media positioning as a mouth-piece unchanged and unchallenged. At this occasion, “conglomeration” driven by government administration was more realistic means, and to some extent, the “kneading” has made positive effects periodically according to a “have-then-improve” idea of development.
However, public service unit groups (shiye jituan) shaped forcefully by political power are just the beginning of “long march” of conglomeration, but not the ultimate. On the basis of finishing the “have” period, real commerce-oriented media groups should be the objective for the next stage. The current conglomeration has already trapped radio and television groups in an awkward predicament between government-led public service units and principles of market, and been embarrassed by accumulated problems, or even die at fatal problems. Moreover, the conglomeration process of most radio and television groups still remains at the nascent stage virtually and not develops in depth.
Take the Beijing Media Group as an example. The Group brought into 15 public service units and companies from Beijing’s radio and television sector, including Gehua Cultural Development Group, Beijing Radio Station and Beijing Television Station, with assets of over five billion RMB Yuan. But the subordinate units were only theoretically owned under one umbrella, while the group did not have real property rights, nor consolidated assets, over them. All the above factors thus lead to the paradox and failure of Chinese conglomeration of broadcasting sector, which has resulted in more conflicts between government’s heavy-handed interference in media group and media groups’ strong will to compete in the market by themselves.
To go out of this stymie, the key is to set a line between public service unit and company, and separate government from public service units as well as companies. Due to the “Single System, Dual Operation” model of China’s media sector, media outlets, as main players in the market, have to undertake both the propaganda tasks for the Party and support themselves through making profit by advertisings. It is inevitable that both government and media would face difficult choices: the government wants to both maintain the monopoly of state-owned media and push forward intensified development of the entire media industry through market mechanism, but no real competition will exist under the situation; and for the media, on the surface they serve for the propaganda of socialism and the Party by implementing the CPC policies, but in the actual operations they had to first run for their own profits. Political tasks and market needs interweave within each media entity, and it is inevitable that media have been bedeviled by various conflicts and contradictions on their purposes, development pattern, organization structure, and both internal and external functions. It is just like antagonism of different medicine. Two kinds of medicine, which both are good for one’s body, will not be effective if act on the body together.
Therefore, the current model of “single system, dual operation” in China’s media sector could be fit for the statue quo of media sector, as a transitional system instead of a fundamental system for future media development. The current restructuring and repositioning of media groups in terms of their attribute and function is targeting at the re-shaping of government-media relations. The restructuring process should follow the media rules coupled with Chinese context. The ultimate goal is to establish a new media institution with Chinese characteristics, with government, media as public service unit and media group as commercial entity playing their respective functions and roles.

II. Construction of Chinese New Media Institution of Government, Media and Groups

China’s media once emphasized “orientation of correct public opinion”. But an obvious defect of it is that in this way, the attribute of media as political propaganda is, to some extent, intensified whereas its attribute as a market player is neglected. Now some people claim that media should be completely “market-oriented”, but they violate the tenet of public services of radio and TV. Looking the attributes of media as politics or market as opposite ones, or just emphasizing one of its facets, is an epistemological obstacle to construct a new media institution with Chinese characteristics.
As a matter of fact, political interests, economic or market interests and social or public interests always compete with each other among media regulations in many other countries worldwide. Political interests are closely connected to the rights and obligations of government, media and mass population. Market interests concern how to enlarge the market share, get more profits and maintain a free media market. Social or public interests emphasize the protection of public sphere and civil society and so forth. These three interests are interactive and interdependent. In China, however, because of the particularity of the Chinese media sector, there are different understandings on the attributes of media. In the point of view of the Party and government, media are mouthpieces and propaganda tools. From the aspect of the social system, media are representations of social and public interests. While from the point of view of information economy, media are business. Different points of view echo the three interests groups that mentioned above. Therefore, it is necessary to break up the traditional framework that regards media as only “mouthpiece” OR only “business”. All the three interests and perspectives should be taken into consideration within a new framework, which means to construct China’s new media institution comprising government, media outlet as public service unit and media groups as commercial company, with them playing their respective functions and roles. The new media institution can help the media to serve public interests and extract profits from market under the supervision of the government,
The competition capability and vigor of media sector depend, to a great extent, on the media institution, and the key is the relationships between government and media. Currently, the top priority is to clarify the property rights of media. Without clear property rights, it is quite difficult for media to run their business in the market according to modern property and enterprise institution. If insisting on the current “single system” of government ownership of media, different radio and television groups being owned by government authorities at different levels and regions, the problem of obscure ownership will be exposed finally.
Take the example of IPTV [2] . Li Ruigang, president of Shanghai Media Group (SMG), the first one who has acquired the license of IPTV, said, “I do not want to say much about this because I have to deal with quite complicated relations.”[3] What could be expected is that, the relations that SMG has to deal with are not only that with equipment suppliers and telecom operators. Under the circumstance that radio and television groups and telecom groups are still authorized by their separate ministries, “the cooperation between SMG and Telecom operators at the group-level” [4]actually means the powers are gambling between the State Administration of Radio, Film and Television and Ministry of Information Industry.
Another case is that China has issued policies to encourage private capital to invest in program production. “Conglomeration” has, to some extent, solved the problem of price war, but at the same time, causes monopoly of the buyer market. Many local media groups define film, television program, Internet service as well as entertainment and social service programs as businesses, which could be opened up to other private or non-media group players, but at the same time impose many restrictions on programs distribution system. By doing this, these media groups are able to protect their own program production departments but simultaneously close the door to many outstanding programs produced by private and non-media group affiliated companies. The result of all these is that many private companies have to cut the cost, manufacture in a rough way, and finally stop production because of being unable to recycle the cost with price declining. Meanwhile, monopoly in the markets leads to corruption and downfall of Chinese program markets.
The media reform during the past more than 20 years fails to change the essence of property rights of media. One of the complicated reasons is the misunderstanding to the concept of “property rights” itself, and the direct result of it is that the media reform can not be put forward. For a long time, people equal the property rights to ownership and take it for granted that media are owned by the state and the property rights cannot “belong to someone else”. At present, the problem concerning unclear property rights of media is because of the obscurity of the ownership of state assets. That is to say, media have no responsible and impersonate representatives for interests. Media, as state assets, fail to distinguish the relations between ownership and incorporated property rights. In fact, property rights are exclusive and must be able to be exchanged equally. In this sense, property rights are the foundation and component of the market mechanism, otherwise the market economy will not exist at all. Meanwhile, property rights are composed of many rights and can not be simplified as ownership no matter how these rights work. Property rights are based on property ownership [5]and generated from investment activities. Generally speaking, property rights can be classified as private property rights and public property rights. The socialism property rights of state assets refer to the assets whose ownership belongs to the socialist state. The state, on the basis of the ownership of state assets, enjoys the rights of investment. The clarification helps us to define the media property rights and settle the problems that media groups are endowed with administrative functions and that government administrations are involved into business and profit competitions.
Market refuses uncertainty, while law rejects ambiguous subjects. At present, China’s mass media still belong to the state-owned sector, and are inefficient, similar to other state-owned enterprises. In order to improve the efficiency to adapt to the demands of market economy, radio and television groups should clarify the property rights, improve the client-agent governance structure, and separate the ownership, incorporated property rights and managerial authority from one another. Specifically, government should change its functions in two aspects. One is that states assets should withdraw or partially withdraw from some fields, such as the production of film and TV contents, which the state assets are unnecessary to enter; the other is that government should abandon its role of “all-round administrator” that was formed in the planned economy, and separate its functions from that of public service units and enterprises. The key to separate government functions from those of public service units and enterprises is to separate assets from administration, and to restructure the management system of radio and television state assets, according to the principles of separating state assets ownership from administration. Agents of state broadcasting assets should be transferred from government administrators at all levels to enterprises (such as restructured media groups). Enterprises acting as agent of the state assets are responsible for investment and management of the state assets, so as to maintain and increase in the value of state assets. In a word, once the market system and market mechanism becomes mature, the government must withdraw from the market, otherwise it will damage the market that is carefully cultivated.
Then, to construct China’s new media system embracing government, media as public service units and media groups as enterprises, how to clarify and reposition the different roles of government, media and enterprise?
1, Government
Some people in government may worry that the media groups as enterprises would neglect their social responsibility while pursuing economic profits. In the past governmental administration had done lots to interfere media routine activities ranging from daily reporting, programs to management. Actually, the government should change the mind and keep trying to provide an appropriate institutional arrangement. The government, for instance, could stop interference into concrete program production per se while turn to make efficient regulations so as to supervise the sources of the television channel, control the quantity of the broadcasting media, say no to any behavior not complied with regulations and guarantee the amount of time for educational and cultural programs, etc. By doing these, without government direct interference, the media can develop along the established efficient institutional arrangement to fulfill their functions.
By freeing content production, which is the “upstream” of the media value chain, and licensing and regulating broadcasting outlets, the “downstream”, the government organs, which were set up before to control different domains, will be merged and downsized. For many years, China’s media reform has been under the leadership of the Party-stated, with compulsory structural transitions, which are not based on consensus of media organizations but decisions of the government, thus media policies are inapplicable, changeable, inferior and tentative. The tentativeness of policies causes local government and media operators to take a wait-and-see attitude. So, disobeying of orders and defiance of prohibitions, as well as policy changes, occur quite often during the process of policy implementing. Solution to these problems in the past was to set up another organ or to employ more people to supervise or control the previous ones that had problems; and to set a new system to guard against the old one. These lead to contradictions and inefficiency. This is called the “Parkinson’s law”.[6] If the government changes its governance method, some government organs, including those responsible for culture, sports, radio and television, press and publication, etc, will be possibly merged from local bottom to center top because they will be no longer involved into media concrete operations, while local radio and television administrations will also unnecessarily exit. And a hybrid committee will eventually be established at central level through merging separate government organs and will regulate all cultural sectors from media, culture to sports. Local government will also set up relative supervisory body to see whether radio and television as well as other media is in conformity with the central policies and regulations, as well as the social ethics and moral standard. Thus media groups can break through the barrier of administrative division and receive sufficient development; and government can enhance the efficiency and have time to provide a good policy and legal environment for the development of the sector and keep long-term prosperity of radio and television industry for protecting the public interests.
During the process of radio and television “conglomeration”, the top issues of government are to determine the scale and structure for development and degree for market concentration of the radio and television industry, to set up practical market access system, to guarantee assets increase and investment, to give guidance to purchase, to encourage economy of scale in broadcasting sector, to improve the research and development of broadcasting technology and facilities and to form unified technological standards.
Meanwhile, there should be a perfect legal system to guarantee the sustainable and efficient development of radio and television groups. Ruling of law is not only the reflection of the public creed of mass media, but also an essential demand of the media market. At present, China is short of laws relating to radio and television sector, and the existing rules and regulations are not systematic, authoritative and foresighted. Concerning Chinese context as well as the objective and realization method for media and social development, the overall strategy of the legal construction for China’s media in the coming 20 years is supposed to enhance the law-based mass media policies, by clarifying and evaluating the current media laws, regulations and policies, to break up the rule of people, to codify media laws, and to transfer the policy authority system to legal authority system to achieve the legal construction objective of “managing state affairs according to law, and building a country under the rule of law”.
2, Media as public service units
Among the new media institution, media public service units mainly refers to the “stations”, which are media outlets mainly producing news related program. The functions of the “stations” lie on propaganda and public services, while they are living on advertisement revenue and subscription fee. The “stations” are organized as public utilities and operate independently according to law. Government is responsible for the governance over stations. In other words, the “stations”, working as public service units, can run for economic profits, with the functions of propaganda and public services as preconditions.
3, Media groups as enterprises
As enterprises operated according to law, media groups and other media business companies will become the leading roles in the market supplying system. Media groups can be either affiliated to media as public service units or independent entities. Mainly running for economic profits, they are engaged in the production and distribution of the contents, independently bear the risks in operation, and are responsible for maintaining and increasing the value of assets. The ongoing restructuring of the groups, though aiming to form main players in the market, is actually of sorts of assistance from government to groups. So, media groups must be aware that the current restructuring process is just one of its development periods, and they should learn how to survive ultimately in the market without monopoly privileges.
Financing has been the essential issue for the development of media groups. At present none of the existing radio and television groups in China has be listed on the stock market in the name of a group. (Oriental Pearl, CCTV Stocks, TV & Radio Intermediary, and Gehua Cable are all listed as subsidiary companies subordinate to the groups.) If not being listed, China’s media groups can hardly expand rapidly on the basis of capital accumulation by themselves, and it will take decades for them to have the same scale and strength of radio and television groups in western developed countries. Therefore, since the media groups are regarded as enterprises, they should be allowed to be listed. It is stipulated that the proportion of the foreign capital should be no more than 49% and domestic capital will control the groups. Meanwhile, the groups can collect capital, through purchase, annexation and strategic alliance, to reorganize assets and expand the scale of assets.

III. Discussions

China’s media has gone through three distinct stages of transition, known as marketization, conglomeration and capitalization. Marketization started in the early 1980s, and was characterized as “Single System, Dual Operations” (the single system refers to the state ownership and the dual operations are seen as a unique approach to commercialize China’s media while fulfilling the political tasks). However, it developed into a bottleneck in the 1990s when, as the size of the media market was in a state of expansion, the increasing awareness of ideological control became so serious that economic infiltration was deepened. In January 1996, the first newspaper group “Guangzhou Daily Newspaper Group” was established, suggesting that China’s media had entered a new era of economic scope. However, the conglomeration of China’s media raised suspicions regarding its purpose and effect. In contradistinction to Western countries, political purposes rather than economic intentions drove the conglomeration of China’s media. All that remained intact was the root of the reforms, and on a profound level, the institutional arrangement. Unable to break through the long established structure of political and economic power, the conglomeration has not got entire completion. The largest broadcasting group, China Media Group, was disbanded in June 2005. Some other broadcasting groups have been asked to change to be pure enterprises, without affiliated radio and television stations. Nevertheless, capitalization was carried out and it became known as a process of re-institutionalization, during which intermingled forces strengthened their control of the media and maximized their profits.
In the post-WTO era, Decree No.17 of the SARFT in 2001 has been seen as an important document to deepen media reform and also as a government resolution in response to the WTO. The distinct features reflected in this regulation are: 1) the function of the government has shifted from a market player to a policy maker and supervisor; 2) media outlets have changed their status from affiliated organizations to market players, enjoying relative autonomy of economic activities; 3) integration of capital and business has been highlighted, with fewer remarks on market entry. Decree No. 21 in 2003 intended to deepen the institutional reform of the culture industry and remarked that the reform of China’s media policy had entered a revolutionary stage. This policy asks all cultural industry including media sector to be separated into two different parts: public service unit sector and business sector. The separation of the public and business sectors, and also the capitalization in all respects, became the main focus.
As to the reasons behind China’s media policy changes, the impetus came from central government, other political interest groups, economic interest groups and transnational media conglomerates. It is clear that the crucial problem facing policy-makers at the moment is how to defend the status of the Central Party whilst facilitating market-led mechanisms. So, some degree of equilibrium needs to be found among political, economic values and social/public needs. Nevertheless, political forces have embraced economic ones, and unprecedented importance has been attached to the role of capital, which will eventually propel the revolutionary transition of media institution. On the other hand, no matter how urgent the reform is, the Party will never lessen its ideological control over the media, which indicates that it has never ceased to adjust its strategies and approaches in exerting complete and total political control.
But we can also find something changed. At the NPC and CPPCC sessions in 2004, Premier Wen Jiabao set an objective of building an accountable and law-based government in the next decade. In July, 2004, China implemented the Administrative Licensing Law to limit the government functions. This is a self-revolution of the government, a revolution of rule-of-law efforts, and also a revolution that China begins to transform its power-controlled society, which has lasted for thousands of years, to limited government and civil rights society. In June, 2003, the SARFT issued a timetable of digitalization of cable TV, initiating the experimental efforts of cable digital TV and setting the year 2004 as the year of digitalization and commercialization for radio and television sector. The timetable stipulates that China will start digital direct satellite TV (DBS) services in 2006, promote digital terrestrial TV and HDTV by 2008, popularize digital TV in cities above county level in eastern to central China by 2010, and switch off analogue TV broadcasting in 2015 when digital TV will cover the whole country. The digitalization process of China’s television coincides with the process of building limited government. Administrations, within the “all-round government” system, misled the process of media conglomeration in the past. The process of building the accountable and law-based government should benefit the clarification of government and media relations, the transformation of government functions and the construction of China’s new media institution embracing government, media as public service units and media groups as enterprises.

[1] See Regulations for the Administration of Radio and Television (1997)

[2] IPTV refers to Internet Protocol Television. Broadcasting sector regards it as a multiple interactive service, including digital TV service, by television signal transmission to households through high-speed network. IT sector, especially telecom sector, however, regards it as the way that all programs transmitted by IP agreement. Users can enjoy IPTV services at home with PCs or set-top boxes and TV sets.

[3] [4] See New Beijing Daily ( May 19, 2005 ).

[5] Property ownership is a kind of civil rights, and “means the owner’s rights to lawfully possess, utilize, profit from and dispose of his property”. See Article 71 of General Principles of the Civil Law of the People’s Republic of China .

[6] It was first articulated by C. Northcote Parkinson in the book Parkinson’s Law: The Pursuit of Progress , (London, John Murray, 1958). Parkinson’s Law states that “an official wants to multiply subordinates, not rivals”, which leads to expansion of staff.

Presented at
International Conference on Chinese Television and Globalization
Duke University October 28-30, 2005

Hu Zhengrong, PhD
Professor of Communication
Director, the National Center for Radio & Television Studies
Executive Dean, Graduate School
Communication University of China
Tel/fax: 86-10-6577-9612


Research Fellow
Joan Shorenstein Center on Press, Politics and Public Policy
Kennedy School of Government
Harvard University
Tel: 1-617-661-3949 or 617-495-8345