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Creativity, New Force in Beijing's Economy

Creativity and innovation are words getting a lot of attention in China these days, and so-called “cultural industries” or “creative industries” have become very popular with China’s economic planners and some business people.

A constant search for new areas with growth potential and business commercial opportunities have led some to believe they have spotted a bonanza after seeing market victories by companies such as Shanda, the NASDAQ-listed computer game developer, and Hunan Satellite TV, which has produced several commercially successful programmes such as Super Girls, roughly modelled on the US television show American Idol.

In most of their reports to annual sessions of provincial and autonomous legislatures, local governments announced their determination to strive for innovation as a motive force in their economic and social development planning.

The National Guidelines on Medium- and Long-term Programmes for Science and Technology Development (2006–20) also made stipulations to help realize the country’s dream of becoming an innovation-oriented nation in 15 years.

With steady income growth across the country and the emergence of a middle class, demand for cultural products is on the rise. A flourishing contemporary cultural scene could contribute to the development of excellent cultural industries.

The Internet is a driving force behind the creative economy, in which individual people’s ideas, skills and creativity, rather than systematic “top-down” programmes, are the driving force. Given the right skills and opportunities, it is expected that people from all backgrounds around the world will develop ideas best suited to their lives. Digital technologies make it possible to eliminate “middle men,” as with artists who can now deal directly with their audiences. This may be the best thing to happen to artists in hundreds of years.

The annual Zhongguancun IT Festival, one of the leading IT galas in the nation, was held in Beijing’s Haidian District this September. “Only through innovation and international co-operation can the IT industry in Zhongguancun see further development,” said Yu Jun, vice-director of Haidian District. The IT gala has been a success since its launch nine years ago, according to Yu. Last year, more than 100 IT enterprises exhibited their products, with a total of 49 investment projects involving 38.7 billion yuan (US$4.8 billion). “Starting from this year, we have invited more enterprises to be involved in organizing the festival, because we value their innovative ideas,” Yu said.

Since the beginning of the year, Beijing, Nanjing, Shenzhen, Guangzhou, Qingdao, Hangzhou, Xi’an and Chengdu and other large cities have begun setting up their own creative industry zones, with an eye toward making CI enterprises a new engine for economic development.

In February, the construction of a creative industry zone called “Window of the World” began in Nanjing, the capital of East China’s Jiangsu Province. The zone, expected to be operational in September, will be the city’s first creative industrial base. The municipal government plans to set up 10 more such areas over the next three to five years.

In Qingdao, Shandong Province, “Creation 100,” the province’s first creative industrial zone, which will feature advertising, design, film and television businesses, is now under construction. Qingdao, a major coastal city of Shandong Province, will host the 29th Olympic Sailing Regatta of the 2008 Olympic Games.

In Beijing, in addition to the “Beijing Creative Centre” in Dongcheng District, the construction of five new similar districts is under way, said an official from the Beijing Municipal Development and Reform Commission. They’re located at Shijingshan Digital Amusement Base, Zhongguancun Pioneering Base, the National New Media Base, Deshengyuan Creative Base of Industrial Design and at the Dashanzi Arts Centre.

“In the development wave of creative industries, the government has an important role to play,” said Wang Qin, PhD, from the Industrial Economy Institute of Chinese Academy of Social Sciences. “The strategy of building an innovative country proposed by the central government provides a good climate for creative businesses.”

The strategy has been warmly welcomed by local governments. Many of them, including Beijing, Shanghai and Nanjing, have written “developing creative industries” into their municipal 11th Five-Year Programmes for 2006–10. Beijing has listed the “cultural creative industry” as one of its cornerstone industries and aims to make the city the country’s “capital of creative industry.” Shanghai asserts it wishes to become an “international creative industrial centre” alongside the likes of London, New York and Tokyo.

The rising importance of ideas creates all kinds of difficulties for corporations. Books, music, and software are difficult to create and easy to copy, especially digital products. And now, so is the Internet, thanks to services that enable people to download music, movies, and software for free. The legal battle over the biggest of the music piracy havens, Napster Incorporated, is a sign of things to come.

In the creative economy, the most important intellectual property isn’t software or music or movies; it’s the stuff inside employees’ heads. When assets were physical things like coal mines, shareholders truly owned them. But when the vital assets are people, there can be no true ownership. The best that corporations can do is to create an environment that makes the best people want to stay.

In the creative economy, the power to exert influence is nearly unlimited because there’s no ceiling on how many people can be made to depend on idea-based assets, notes the University of Chicago’s Raghuram Rajan, an expert on banking and comparative financial systems. An example is America Online Incorporated’s instant-messaging system, which is marketed to select companies and individuals. Companies will exercise power by sharing or withholding crucial intellectual property.

Global corporations will try to take advantage of their transnational status to operate beyond the control of national governments. They can play governments off one another through their decisions about where to locate factories or research labs. And many use unrealistic transfer prices to shift income from high-tax jurisdictions to low-tax ones.

For all the talk of a brave new world, nation-states aren’t going away in the 21st century. So it’s a good bet that there will be repeated clashes between corporations and the countries and their peoples that play host to them. In response to the globalization of business, governments may coordinate their efforts to regulate corporations on issues ranging from taxation to pollution.

The Beijing Municipal People’s Government has revealed that it will focus on the development of the cultural creative industry, with stress on enhancing independent innovation.

According to its plans, Beijing should accelerate planning and development for its cultural creative industry and nail down development focuses and a layout for the industry. Supportive policies should be developed and enterprises featuring diverse forms of ownership should be allowed to engage in developing the cultural creative industry.

At the same time, they also advised that the government should enhance its efforts to support independent innovation, protect intellectual property rights and particularly to create a favourable environment for Beijing-based centrally owned enterprises and its scientific research academies and institutes to elevate the innovative capabilities of China’s capital.

Lastly, they said that since Beijing is a typical resource-dependent city where water resources are highly prized, the government should adopt more practical and strict standards for energy conservation and environmental protection and vigorously promote new technologies and techniques. It has to speed up the use of clean energy sources such as solar energy and wind power.

Professor Jin Yuanpu of the Renmin University of China said, “The creative industry is emerging in China against the background of global consumption and serves to meet people’s needs in cultural, arts, intellectual and amusement products.”

It appears that investment-driven economic success is no longer an absolute requirement with China attaching significant importance to boosting economic development through expanding the power of the purchaser. At the same time China is changing from a supply-oriented to a demand-led economy.

Experts have suggested that as China is new to the creative scene, the basic foundations must be established quickly to allow the industry to grow.