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China Will Never Be a Gold Mine for Western Publishers

China’s book market is itself largely a self-contained entity—politically, socially and, more importantly, economically.

By Edward Nawotka, Editor-in-Chief

The Great Wall of China

I’m told I missed a great opportunity in 1997. Living in Hong Kong and reporting on the change of sovereignty back to China — I still have the amazing cover of the Sunday South China Morning Post from that day hanging in my house — I refused entreaties from friends to “move to Beijing and make a fortune.” I was there, they told me, early, way before my fellow Westerners were going to flood in and make a killing. Of course, all this was discussed in Le Jarin bar in Lan Kwai Fong as the fireworks were being set off below us on the harbor and Prince Charles was doing his best to smile as he handed over the keys to the city. I opted first to go to Macao (then still Portuguese, but just barely) and then to Jakarta instead, which led to even stranger invitations “make a fortune,” this time coming from people inside the Soeharto regime. I, wisely, declined those as well.

A few publishers have made inroads into China. HarperCollins, Hachette, Penguin. But others have failed as well…

Of course, I really don’t think I made much of a mistake bypassing Beijing at the time. I am not Chinese, nor do I claim to understand the country, culture or its people. But the one thing I learned during my time in Asia was this: generally speaking, the Chinese are, when given opportunity, very shrewd business people.

Over the past few years, the furor surrounding China as a business opportunity for Western publishers has subsided somewhat. It reached a fever pitch a few years back when China was the guest of honor at the Frankfurt Book Fair. But the realization seems to have finally dawned on many that doing business in China is a daunting proposition, particularly when it comes to working in the media business.

The restrictions are just too severe. Foreign movies are limited, the internet is curtailed, foreign companies cannot take full ownership of their subsidiaries. And the culture is, let’s admit it, too distinct for Western individualists/capitalists to fully engage with — something Duncan Jepson discusses in detail in today’s feature story.

Yes, a few publishers have made inroads into China. HarperCollins, Hachette, Penguin. But others have failed as well — Random House, scaled back considerably in the 2000s (which is also why it’s merger with Penguin makes good sense on the international front).

But all this talk of culture is mere window dressing to the underlying fact that China’s book market is itself largely a self-contained entity — politically, socially and, more importantly, economically.

There are best practices that can be traded, certain hot titles, educational materials, certainly…but selling into China is a limited proposition for the time being. There’s a reason why only a handful of literary agents service China and why Kobo hasn’t launched there yet (and we know they always get there “first”).

In publishing, as in the rest of business, the Chinese are far more interested in developing their domestic market than their international exposure.

The simple fact is we need them more than they need us.

Agree? Disagree? Let me know in the comments.

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  1. Posted January 3, 2013 at 11:02 am | Permalink

    If you’d like some more insights into what life in China is like today, follow the blog of my Mandarin-speaking stepson here: http://www.isidorsfugue.com.

  2. Paul Richardson
    Posted January 3, 2013 at 2:51 pm | Permalink

    With respect, these comments seem to come from an experience and knowledge of the Chinese publishing and media scene, which seems to be on another astral plane from my own.

    Despite the controls to which the author rightly refers, the top two box office successes in Chinese cinemas in 2011 were the latest Transformers and Kung Fu Pandas movies. In 2012 ten of the top fifteen box office successes in China were foreign films.

    If you turn to publishing Western authors are extraordinarily successful in the market. In 2012 J.K.Rowling and Gabriel Marquez rivalled the top Chinese authors in royalty earnings. He also seems unaware of the huge business in educational and academic publishing that Western publishing companies are running despite the barriers to direct participation in the market. An English language learning series, jointly developed by Macmillan and Foreign Languages Teaching and Research Press, passed the 100 million copies sales mark some years ago and you cannot believe that OUP, CUP, Reed Elsevier etc. are so active in the market for nothing.

    Looked at from the other, Chinese, point of view the desire to trade in culture with the West has no relationship with the author’s view that ‘we need them more than they need us’. The Chinese authorities are acutely aware of the cultural deficit in trade in the creative industries and their relative weakness in ‘soft power’ (cultural influence and respect), despite their burgeoning ‘hard power (political/military/economic). In 2004 China imported 15 times as many copyrights from abroad as they exported; in 2011 it was more like 3.5 times, but the ratios with the USA and the UK were 18:1 and 10:1. Hence their subsidization of translations and heavy pressure on Chinese publishing companies to ‘go global’ – almost at any price and regardless, at this stage, of profit.

    On the other hand, I was in Beijing only last month discussing with one of the largest publishers in China how they could acquire UK intellectual property more effectively. It is true that controls and some political considerations make China more complex to deal with than, say, India, but how can one take such a dismissive attitude to the largest (by volume), second largest (by value) and second most creative (by new titles published) in the world and where Charlotte’s Web regularly appears in the children’s top ten bestsellers?

  3. Edward Nawotka
    Posted January 3, 2013 at 3:34 pm | Permalink

    @Paul Richardson. I agree with our points, yet my attitude is hardly as you say “dismissive” of the opportunity to engage, but your points about China’s interest in developing “soft power” abroad — the proliferation of Confucius Institues is just one example — is much more about China projecting its own culture. The willingness and openness of China to engage with the rest of the world is being made more explicit and the Chinese publishers are working hard, as you said, to “go global” — but you underscore my own point, in that China’s publishing community has one priority: sell to China. And yes, as you acknowledge, Western education publishers have been the most successful in China, as they are in the majority of overseas territories where they operate. But as far as China’s consumption of foreign cultural products—you cite movies—is that radically different from elsewhere? I may be wrong, but don’t the majority of American films often take in more money overseas than at home. Book publishing is a rather different proposition.

  4. Paul Richardson
    Posted January 4, 2013 at 12:12 pm | Permalink

    You have lost me in your reply. You said originally that China is never going to be a goldmine for Western publishers, because it is a closed system. I have argued that it is already a worthwhile source of income for many publishers and authors. It is in the top twenty export markets for UK publishers; not just J.K.Rowling and Gabriel Marquez, but Murakami, Dan Brown, Thomas Brezina, Khaled Hosseini and S.J.Watson all clocked up quite decent royalties last year and a number of Western educational and academic publishers did very good business. At the same time there is the opportunity for Western publishers to buy intellectual property from China on very advantageous terms.

    While the government in China is very keen to export its culture, the publishers and readers are very hungry for Western product, demonstrably in film, but also in books. Three per cent of books published in the UK are translated, mainly from European languages, a handful from Chinese. Ten per cent of those published in China are translated, mostly from English, and there is this huge market for English learning – over 500 million people in China are learning English at one level or another, more than the total number of English first language speakers in the world. The premise of your article, encapsulated in the title, seems to me to be just plain wrong now, let alone for the future, when many of the current barriers will begin to come down.

  5. Rebecca Li
    Posted January 8, 2013 at 4:38 am | Permalink

    It’s interesting and meaningful for me to understand what foreign publishers think about Chinese publishing. I’m from China.I do children’s books. In China, some domestic children’s literature writers are extremely popular, but it’s too difficult to make a translated chapter book sell well except worldwide best-selling writers’ works.

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