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China seeks to raise consumption of cultural goods and services, making it a pillar industry
China has emerged as the world's largest cultural goods exporter in value terms in recent years.
In 2013, for instance, China exported cultural goods worth $60.1 billion, more than double that of the United States' $27.9 billion.
Yet experts say the country still lacks domestic brands that can create a profound impact on the global market, which can be attributed to market barriers and the late start to its culture industries.
China's main cultural goods and services include gold jewelry, art such as statues and paintings, crafts like pottery and chinaware, music, dance, movies, travel, sports, education, entertainment and artisan handicrafts.
According to the Ministry of Culture, the actual consumption level for cultural products and services is about 1 trillion yuan ($154 billion; 136 billion euros). However, the potential is there to boost the figure to 4.7 trillion yuan.
The 13th Five-Year Plan (2016-20) has positioned cultural industries as a key pillar of the national economy.
That is in tune with the recent rapid growth in China's cultural exports, which began in 2009. Within a year, the country overtook the US as the market leader, according to a UNESCO report in March.
Emerging markets like Turkey, India and Malaysia have also emerged as leading exporters of cultural goods. The US remains the top importer, followed by other advanced economies.
While cultural trade between developed countries has remained strong, the trade between emerging markets has stayed weak, the report says.
"China lacks major cultural enterprises with brand impact and original designs," says Lu Jinyong, director of the University of International Business and Economics' China Research Center for Foreign Direct Investment in Beijing. "A large part of exports of cultural products comes from processing trades, without much independent research and development.
"Although the number of domestic cultural companies has risen, the market penetration level is low. This also shows a large gap between China and developed countries.
So you could say China has significant potential for growth."
Despite the global economic downturn and the advent of online consumption, global trade in cultural goods doubled between 2004 and 2013, showing the strong resilience of cultural industries.
Gold jewelry, art and crafts, statues and paintings have been the most traded cultural goods globally. In 2013, they accounted for 71 percent of cultural exports, up from 50 percent in 2004. Trade of recorded music products and movies has declined.
"(Global) trade in cultural goods totaled $212.8 billion in 2013, nearly double the amount in 2004. This is further evidence of the critical role culture industries play in today's global economy," says Silvia Montoya, director of the UNESCO Institute for Statistics.
In 2014, value-added cultural industries accounted for less than 4 percent of China's GDP compared with 25 percent in the US, where a stable base facilitates mature growth, unlike in China where the development of cultural industries is marked by many untapped resources.
Nevertheless, some of the well-regarded cultural enterprises in China have achieved significant revenue growth, burnishing their reputation. They have expanded overseas, contributed to worthy causes and fostered innovation.
Huayi Brothers Media Corp, China's largest private film company, says it plans to expand its international reach, especially in the US. After a few failed attempts to co-finance movies with US companies, Huayi directly invested $130 million in 2014 to establish a wholly owned US subsidiary to produce and distribute movies and TV shows.
The company also plans to work with STX Entertainment, a film and TV company based in California, to co-produce 18 films, to be distributed worldwide by 2018.
It is the first such formal agreement between a Chinese company and Hollywood, and the first time that a Chinese film company will take proportional profits at the global box office.
In recent years, Chinese people have attached greater importance to their spiritual and cultural life, and the demand for travel, sports, educational and entertainment services has grown.
Global demand for Chinese cultural products may boom in the foreseeable future, if the success of Dynamic Yunnan is any indication. The company is China's first large-scale producer of an original musical drama, which is rooted in the traditional Yunnan culture of Southwest China.
Dynamic Yunnan has staged performances at home and abroad, including at popular tourism sites. The company's operations gathered momentum after it went public on the National Equities Exchange and Quotations, also known as the New Third Board, in 2014. That helped it to attract more investment.
The company began to develop related businesses, including sales of cultural products, and has even diversified into real estate.
"China has paid much attention to the growth of cultural industries. It has set up a number of cultural industrial parks. The growth of the sector is challenging, given its long and uneven production cycles. The government should offer more financial support and preferential tax policies to the sector," Lu says.
"China should create more cultural brands that are rooted in traditional Chinese culture, technique and craftsmanship. The Chinese cultural products have to be unique. They can't imitate foreign designs. But the styles and packaging should conform to international trends, and better cater to foreign tastes.
"China can also develop more multinational cultural corporations. This will help to popularize Chinese cultural products worldwide and promote China's image and global impact."
