Responding to Regulatory, Market, and Information Technology Changes: Chinese Newspapers in the Transitional Era

Article excerpt

Abstract

During the past decades, along with the dramatic economic and social transitions in China, Chinese newspapers have been through significant changes in regulation, market, and information technology. This paper examines the key characteristics of these changes (e.g., regulatory loosening, market segmentation, and media convergence) as well as Chinese newspapers' strategic responses to the changes.

Key words

Chinese newspapers, regulation, market, information technologies

Introduction

During the past decades, along with the dramatic economic and social transitions in China, significant changes have taken place in the external environment and consequently the operation models of Chinese newspapers. This article addresses two major questions: How did the external environment of Chinese newspapers change? How would Chinese newspapers deal with those changes? This paper argues that three forces have contributed to the changes in the external environment of Chinese newspapers, namely, regulation, market, and information technology. First, Chinese governments have loosened the regulations on newspaper industries. This enables the newspapers to transform themselves from traditionally government-controlled business into a relatively independent market entity. Second, there has been a fundamental change in audience as well as advertising market. This drives the newspapers to keep looking for new strategies to attract readers and advertisers. Third, challenged by the rapid development of new information technology, Chinese newspapers have come to utilize advanced information processing and communication technology to actively pursue digitalization. In the following sections, we conduct a detailed discussion and assessment of these changes and Chinese newspapers' responses to these changes. We also discuss the prospect of Chinese newspapers as well as the future patterns of mass media.

Responding to Regulatory Changes

Traditionally, Chinese newspapers belong to and are controlled by the governments. Since the country adopted its policy of reform and opening-up in 1978, however, this industry has experienced four major regulatory reforms, each of which contributed to the gradual loosening of government control over newspapers. February 1979 saw the first reform when eight largest government newspapers represented by People's Daily called for "enterprise management of public institutions," which was finally approved by the central government. According to this policy, newspaper institutions were allowed to raise employees' salary and welfare by subtracting a certain proportion from their operation revenues. This policy directly triggered the upsurge of newspaper advertisement and also marked the transition from a planned economic pattern featured by governmental subsidy to a market economy where newspapers were responsible for their own profits or losses (Zhang & Yu, 2004). Launched in the mid 1990s, the second reform featured "the separation between marketing and editorial," which further strengthened Chinese newspapers' market orientation and resulted in the fast growth of newspaper industries (Zhang & Yu, 2004). The establishment of large newspaper groups since the late 1990s marked the third reform and became the major growth pattern for Chinese newspaper companies. Unlike market-based mergers and acquisitions in western markets, however, conglomerations of Chinese newspapers featured the government-led amalgamation and rearrangement of newspaper assets. Also, conglomerations often happened to the media with the same administrative rank in the same region (Sun, Nong, & Liu, 2001), and they applied to neither cross-region nor cross-media markets. In general, the aforementioned three reforms were partially market-oriented reforms within a planned economic system and failed to challenge the foundation of Chinese newspaper industry: newspapers were essentially an organ of the Party and governments. …