TY - JOUR
AU1 - Wang,, Haiyan
AU2 - Sparks,, Colin
AB - Abstract This article reviews the impact of digital technologies on Chinese newspapers. The diffusion of the smartphone has precipitated severe economic problems for the printed press. There have been falls in both readership and advertising revenues, which have had an effect on the structure of provincial-level press groups. The decline in economic viability has been felt most acutely by the commercially-oriented titles, while the more politically-oriented papers have led the way in finding new sources of funding. These sources tend to tie journalism more tightly to political and economic power, and lead to commercial goals replacing journalistic ones. This shifting balance of economic power has important consequences for the possibility of independent and critical journalism. The empirical material is specific to China, but it highlights more general theoretical questions as to the political economy of the media. This article analyzes the impact of new media on Chinese newspapers. The focus is on the newspaper groups that dominate the press at the provincial level. Characteristically, these groups contain a politically-oriented “party” newspaper and at least one other, commercially-oriented, or “metro,” title. While the former play a central political role, the latter were, until recently, economically more successful, particularly in gaining advertising revenue. The main economic effect of the growth of the Internet and mobile telephony has been to shift advertising away from the legacy media towards new online outlets. Consequently, there has been a fall in the revenues of the newspaper groups. At the same time, the readership of many printed editions has fallen. While some papers have had considerable success in attracting audiences to their online offerings, they have also faced competition from new, online-only entrants into the news market. In response, newspaper groups have developed new strategies, both in the editorial and business domains, in order to attempt to survive. This has entailed striking a new balance between the political and the commercial and, consequently, a new dynamic between the media, politics, and market is in formation. Studies of the impact of digital technologies on the newspaper press have concentrated on the developed world, in particular the United States, and compared the latter with other advanced economies (Brügemann et al., 2015). China remains, in World Bank terms, an “upper middle income” country and, socially and politically, it is very different from the United States and Western Europe. This study therefore provides an important comparator to existing cases. It is a step towards answering the call to “identify the patterns and sources of similarity and variance in newspaper crises around the world” and contribute to a better understanding of the impact of these changes (Siles & Boczkowski, 2012, p. 1387). This article focuses on only one aspect of a complex of issues involved in this “crisis around the world”: the political economy of the press. While the actual ownership of the media remains disputed, the Communist Party of China (CPC) controls every level of the system and is the ultimate arbiter of media content (Brady, 2012; He, 2007; Zhao, 2008, pp. 101–103). At the same time, since the beginnings of liberalization in 1978, the media have been increasingly dependent upon subscription and advertising in order to survive. What had been a centrally-controlled and politically-subsidized media became, increasingly, decentralized, marketized, and open to limited private investment (Stockmann, 2013; Sun, 2012; Zhao, 1998). This article begins by briefly outlining the general theoretical issues of political economy relevant to this study. Then it reviews some features of the Chinese press that render its response to this international situation distinctive. It presents evidence that was drawn from 104 interviews conducted with individuals of different ranks in 6 newspaper groups across China during 2016 and 2017. Based on this evidence, conclusions are drawn about how the changing situation and the strategic shifts it has provoked have altered the internal balance of Chinese press groups. Finally, the implications of these findings for the overall understanding of the Chinese press and, more generally, of the political economy of the media, are discussed. State, market, and media The political economy of the media focuses on “understanding the connections between the political and the economic” (Mosco, 2009, p. 29). This connection could be theorized in a number of ways, but in practice it has usually been defined with the state as the representative of “the political” and the market as the embodiment of “the economic.” For most political economists, of whatever persuasion, the operating assumption has been that the state and the market are conflicting poles of influence on the media, and their relative strength has been seen as central to the extent to which the media can constitute something approaching a public sphere (Winseck, 2011). A strong current of thought suggests that a concern with the state in relation to media and culture is outmoded, since “the military, economic and cultural self-sufficiency, indeed self-sustainability, of the state—any state—ceased to be a viable prospect” (Bauman, 1998, p. 69; Beck, 2000; Pieterse, 2000). Quite apart from the case of China, there is ample evidence that the state remains an influential actor, able to employ coercive power, regulation, and the state budget to achieve those political outcomes desired by the governing classes (Draogmir, 2018; Flew & Waisbord, 2015). Latin America provides many well-documented examples of the continuing significance of the state for the media industries: governing parties of both left and right have used the state budget to support friendly media and repress oppositional voices (Benavides, 2000; Hughes, 2006, pp. 202–205; Lawson, 2002, pp. 31–34; Reilly & Gonzáles de Bustamente, 2014, p. 118; Waisbord, 2013). There are conflicting views as to whether the state or the market best enables the desirable goal of democratic media. Scholars analyzing the situation in Europe and North America from a variety of perspectives have long seen an unregulated market as a negative factor that undermines the capacity for a plurality of public discourses and, thus, for the establishment of democratic public life in the form of a public sphere, however limited (Baker, 1994; Garnham, 1979; Hamilton, 2004; Herman & Chomsky, 1988; McChesney, 2008; Williams, 1966). Some authors have gone further and stressed the positive role of the state in remedying the shortcomings of the market and sustaining the media, both through its role as a regulator of private companies and through the provision of public subsidies to remedy market failures (Golding & Murdock, 1991, p. 24). This widespread view has meant that even one of the strongest European voices in favor of the market ended his remarks with the concession that “corporations might have a significant presence in democratic media systems, but it is the challenge of regulatory agencies to check corporate power and make markets work for the public sphere” (Chalaby, 2005, p. 289). This widely-held view is based on the belief that “the democratic state is the principal means by which people can change society” and that this democratic promise is embodied, albeit imperfectly, in public-service broadcasters (Curran, 2002, p. 152). Under some circumstances, historically those prevailing in northern Europe, scholars point to the superior performance of public over commercial media in facilitating a public sphere (Benson, Powers, & Neff, 2017; Curran, Iyengar, Brink Lund, & Salovaara-Moring, 2009). This stress on the importance of public (that is, state) support for media as a necessary remedy for the failings of the market has found far less support amongst U.S. scholars, although there is some evidence, albeit now rather dated, that public media perform better than commercial media from the point of facilitating a public sphere (Wasburn, 1995). The desperate situation of newspapers has, however, led to suggestions that the general hostility to government intervention in the news “should not preclude government support for news reporting any more than it has for the arts, the humanities, and sciences, all of which receive some government support” (Downie & Schudson, 2009). Despite the financial pressure on journalism, such views have tended to be temporary and held by a minority of scholars, while the mainstream continues to adhere to the market as the guarantor of democratic journalism (Benson, 2017; Pickard, 2017, p. 53). The relationship between the state and market has also been a major theme in discussions of the Chinese media over at least the last three decades, and the conclusions have generally been hostile to the state (He, 2003; Lee, 1994, 2000; Tong, 2011). Lee argued, in a famous article, that, in late-developing countries like China, a “liberal” political economy gave a greater purchase on reality, stressing that “a freer market order, not abused by the state, offers an emancipatory alternative to … authoritarian dictatorship” (Lee, 2000, p. 36). Following this approach, many studies have demonstrated that market pressures have opened spaces in which new forms of journalism could flourish, and in which at least some moderately-critical reporting could be published (Hassid, 2015). One commentator summarized the resulting consensus on the Chinese press: “in the long term, these dynamics [of the introduction of market mechanisms] appear to lead to greater openness of space in news reporting” (Stockmann, 2013, p. 5). This “greater openness” meant that papers were able to develop new forms of journalism that met the diversifying needs of increasingly-prosperous Chinese citizens. Much of this new journalism was concerned with the provision of news, not just about public affairs, but about all of the accoutrements their readers were acquiring as a result of their increasing living standards (Saether, 2008, pp. 138–144). As Zhao (2004a, p. 207) put it, “mass entertainment, the mobilization of consumption, and stock analysis are politically safe and financially more rewarding.” Some of this journalism, however—particularly in the commercial press, but also in some party titles—investigated the abuses and crimes that accompanied the explosive growth of the economy and the huge social dislocations that it involved (Svensson, Saether, & Zhang, 2014; Tong, 2011, 2015; Wang, 2016). All media in China are responsible to different levels of the CPC apparatus: in the case of the provincial press groups we studied, they report to their provincial CPC Propaganda Departments. One consequence of this structure is that newspapers with “higher” levels of responsibility are able to investigate issues at “lower” levels. For example, when Beijing News was classified as a “central level” newspaper, it could investigate stories at the provincial and lower levels (Li & Sparks, 2018). This facility has always meant that newspapers, both party and commercial, have a certain leeway—indeed, a duty—to conduct “public opinion supervision” (yulun jiandu) and to investigate problems, although always within very definite limits. In some cases, the higher levels of the party encourage their media, including the party media, to root out egregious examples of abuse at lower levels (Sun, 2010). The production of this investigative journalism in China has been extensively studied, with one analysis finding more than 120 articles dealing with the issue (Wang & Lee, 2014). Perhaps the most famous of these reports was the Sun Zhigang case in 2003. Following the death in custody of a young migrant worker, an investigation by the Southern Metropolis Daily eventually led to compensation for his family, the conviction of some of his assailants, and the abolition of the law under which he had been detained (Wang, 2016, pp. 30–31). Among many other cases was the investigation of an explosion that resulted in many fatalities at a gold mine in Shahe in 2002. The mine owners and local officials tried to cover up the tragedy and bribed national and local journalists to produce distorted reports, but reporters from the central party paper, Beijing Youth Daily, uncovered and published the true death toll, leading to the arrest of those responsible (Chan, 2010). There are many other cases of corruption, crimes, and tragedies that only came to light as a result of the courage and perseverance of investigative journalists. The extent of the opening produced by market forces has been a hotly-debated issue. One influential current argues that there is an underlying conflict that will eventually produce a crisis of the press, paralleling a more general social crisis in which the conflict between the market economy and the CPC’s monopoly of political power becomes unresolvable (Hassid, 2015; Qian & Bandurski, 2011; Shirk, 2007, 2011). Against this, it has been argued that the marketization of the media was initiated, controlled, and limited by the CPC. The CPC has always determined the degree to which any critical journalism could be published and the party has been able to build a working relationship with at least the majority of journalists (Lee, He, & Huang, 2006, 2007; McCormick, 2003; Zhao, 1998, 2008). Overall, the evidence from a quarter of a century of shifting relations between the party and the journalistic workforce strongly suggests that the system is sufficiently robust to endure the strain and permit the relatively smooth continuation of the CPC’s overall ideological control (Esarey, 2006; McCormick, 2009; Repnikova, 2017a, 2017b; Tong, 2014; Zhao & Sun, 2007). This relationship has always been problematic, and there have been several instances where the contradictory pressures have led to serious clashes between journalists and the party: for example, with regard to the famous liberal magazine Southern Weekend in the late 1990s, the Freezing Point supplement to China Youth Daily in 2006, and, on several occasions in the 2000s, with Beijing News (Cho, 2014; Hassid, 2008; Li & Sparks, 2018). Up until now, however, no one has questioned that the development of the market in China has led to increased openings for journalists, working mostly but not exclusively in the commercial titles, who have been able to develop new forms of journalism and even to produce some mildly-critical material on carefully-selected topics. It is incontrovertible that the evidence demonstrates that, in the circumstances prevailing in China, the market has had a positive effect on journalism and that the state is an obstacle to the press helping generate a version of the public sphere. Political economy thus faces a theoretical dilemma: there is strong empirical evidence from one part of the world, Northern Europe, that public support for media has beneficial consequences for public life, and strong empirical evidence from another part, China, that it is the market that provides such benefits. If the poles of state and market are alternatives that pull in opposite directions, then there can be no general theory of the political economy of the media. The main theoretical contribution of this article, therefore, is that, through a close examination of the contemporary political economy of the Chinese media, it permits a critical analysis of the extent to which the state and market are the necessarily-dichotomous poles within which discussion of the foundations of a democratic media must be articulated. The impact of digital media Unlike the newspaper press in the United States, the recent history of the Chinese press is marked by considerable growth. Newspapers in the United States began to lose readers in the mid-1980s, but the circulation of the Chinese press grew vigorously up until 2012 (General Administration of Press and Publication, 2015). This growth was driven both by the expansion of the readership of existing titles and by the launch of new types of papers. The traditional party press was joined by titles that, while firmly subordinate to the CPC, were much more commercial in their orientation, and which provided many new kinds of journalism (Stockmann, 2013; Zhao, 2002). While the readership provided income through sales revenue, commercial publications were supplemented by advertising, which, after the “opening up” of the late 1970s, steadily increased as a proportion of their total revenue. By the turn of the century, it accounted for more than 60% of their total income and was projected to rise to 80% by 2010 (Zhao, 2004a). The impact of digital media and, in particular, the rapid rise of the mobile phone in China, has fractured the delicate balance between the market and political power. The developing market, both for news consumption and for advertising, has moved both readers and revenues away from the legacy media. This shift has been most pronounced in the newspaper press, and it has provoked a search for new organizational forms and new revenue sources that have undermined the fragile position of critical journalism. The changing pattern of news consumption has had far-reaching economic consequences that have reinforced the effect of renewed political pressure on the media that resulted from the shift towards “hard authoritarianism” under Xi Jinping (Brady, 2017; Li, 2015; Shambaugh, 2014; Tong, 2019; Wong, 2016). The rise in the circulation of newspapers reached a peak in 2012 and has declined sharply since then. This decline has been greatest amongst commercially-oriented newspapers and has been less severe for party-oriented newspapers, some of which have experienced a rise in their circulation (Sparks, Wang, Lü, Wang, & Huang, 2016). Unlike in the United States, the value of newspaper advertising in China continued to grow into the 21st century. When it fell, however, the decline was even more precipitate. After 2012, expenditures on advertising in Chinese newspapers fell rapidly, dropping in constant Renminbi (RMB; the Chinese unit of currency, also known as the yuan) from 40,956.4 million to 10,180.4 million in 2016, or losing roughly 75% of its value in five years. By contrast, in constant U.S. dollars, press advertising expenditure in the United States fell by 82% from its peak in around 2000 (World Advertising Research Centre, 2017). The financial shock in China was almost as great as that experienced by the U.S. press industry, but it has been concentrated over a very much shorter time span. Such a rapid transformation of the economics of Chinese newspapers has had reverberations at many levels. The attempt to create new business models, particularly through exploiting the affordances of digital media, has had important effects upon journalistic activities, and we have addressed some of these problems in more detail elsewhere (Wang & Sparks, 2018). In this article, we concentrate on the ways in which the shifting economic situation has altered the balance between the party papers and commercial papers in provincial-level press groups. We explore the strategies these groups have developed, analyzing the shifting patterns of those revenues that the groups have been able to command. We explore the extent to which these shifts have impacted upon the kinds of journalism that they produce and, thus, upon the overall situation of journalism in China. Methodology The research team interviewed 104 respondents from 6 provincial-level press groups. The semi-structured interviews were preceded by a thorough review of the published scholarly and trade press material about the groups in question. All of the interviews were conducted in Chinese by native speakers who followed the same outline structures for their questions. The press groups were selected to obtain as broad as possible a perspective on the provincial-level press. Since there are 32 provincial-level administrations in mainland China, it was not possible to interview individuals from all press groups in this category. The groups were selected, so far as possible, to reflect the regional diversity of China: in particular, the differences between the highly-developed East Coast provinces and in the less-developed West. Respondents were selected at different levels in the organizations, in order to reflect different experiences and functions. For this article, we interviewed the leadership of the press groups for insights into the overall situation, dilemmas, and strategies of the groups. In addition to interviews with senior editorial and management staff from both the leading party title and the leading commercial title, in order to understand the ways in which these developments have impacted on different kinds of newspapers, we also interviewed working journalists, to determine the impact of these developments on journalistic morale and practice. The respondents were promised anonymity, and both the press group in question and the name of the respondent involved have been replaced in this article, using numerical coding for the press group and alphabetical letters for the individuals. The interviewees were asked in advance whether the research team could record their interviews. When they consented, they were recorded and the interview was transcribed in Chinese. Where the informant preferred not to be recorded, a written note was made of the main points in the interview. The material was manually coded and the results were discussed amongst members of the research team in order to develop an overall sense of the direction of various developments. Selected portions of the transcripts were translated into English in order to enable the presentation of supporting evidence in articles written in that language. In Chinese-language publications, the material remains in its original form. Press groups The structure of the Chinese press means that the financial shock has produced different responses to those made familiar by studies of developments in the United States. Since the early years of this century, different titles have been consolidated into newspaper groups, which usually contain both political and commercial newspapers (metro papers), and often several other titles as well (Cui, 2017; Zhao, 2006, 2004a; Zhao & Xing, 2012). Since the commercially-oriented titles won a wider readership and more advertising than the directly-political offerings, they were responsible for the financial successes of the group and often subsidized the lower circulation of the less-innovative party title (Chen & Guo, 1998; Cui, 2005–2017). Within a press group, therefore, although the political paper remained central to the CPC’s leadership, the commercial titles were economically more successful. They also enjoyed more prestige amongst journalists: one study of investigative journalists’ attitudes found that their favorite Chinese news source was the metro Southern Metropolis Daily, far ahead of Southern Daily, the party paper leading the same press group. People’s Daily, the central mouthpiece of the CPC, was the outlet that received the lowest score (Shen & Zhang, 2014, pp. 44–45). The former Deputy Editor in Chief of the main commercial title in an inland province, who is now the General Editorial Director of the whole group, explained the practical significance of these economic realities for the kinds of journalism that his title could publish in terms so vivid they are worth quoting at length: I joined the Metro in 1996, and in 1997 it started publication. I was the news director in the first year. I remember at that time the group leaders said that it was OK if it took several years for us to be able to make a profit. But we were making a profit in just one to two years. Suddenly we earned lots of money, tens of millions of yuan. That was in about 1999. … The influence of the party newspaper was very weak at that time, and nobody read it even though they subscribed. But when it came to the Metro newspaper, it seemed everyone was reading it: on the street, in the restaurant, at home after a meal. And we had a great sense of being respected. Advertising was pouring in, money came in, clang, clang, clang. … Soon it increased to 300 million, 400 million, 500 million, 600 million. … [The party paper], on the other hand, only made 20 or 30 million. Such a difference! Our reporting at that time was also very aggressive. The president of the group said, “Besides me, no other editors or party members in the group’s executive board can interfere in the editorial decisions of the Metro.” At that time we did a lot of negative [critical] reporting. There were always people who wanted to stop us from publishing it. They would get the group executives to come to speak to us. I remember I had so many phone calls when I was on duty at night. But every time I received a phone call, I told them: “You need to go to speak to the president. If he says ‘withdraw it,’ I will withdraw it. Otherwise, I will do as I decide. I will continue to publish it. I will not listen to you. If I withdraw this report, and withdraw that report, how can I run a newspaper?” … At that time, truly, the Metro was, in one word, “yingqi” [tough, firm, confident, proud etc.]! (Informant 5b, May 10, 2017). The popular appeal and economic success of the commercial titles were recognized by everyone. The prestige conferred by the market did not give them political autonomy from the CPC, but it did provide a significant counter-weight, at least against pressure from lower levels of the party. Faced with an economic downturn, the press groups have been obliged to search for new strategies to generate revenue. The various titles within a group have different opportunities in this respect. According to the General Manager of a provincial-level group located in the capital of a small and relatively-poor inland province, in their peak year of 2011, the commercial title accounted for more than half of their advertising revenue, while the party paper accounted for about one quarter of the total. In 2015, this situation was transformed: the party paper now accounted for nearly half of the group’s advertising revenue, at more or less the same level as that of the commercial paper (Informant 1a, May 20, 2016). While the overall advertising revenue of the whole group was now much smaller, that of the party press had proved more resilient than that of the commercial paper, and the former had even had opportunities to increase its income. Complementing these economic pressures, there are powerful political voices that demand a change in strategy. The economic downturn in the press coincides with the development of online activities that have been of considerable concern to the party leadership (Xiong & Zhang, 2018, pp. 89–93). In December 2016, 82% of China’s then–731 million Internet users, or 614 million people, were accessing online news, and 78% of them used their mobile phones to do so (CNNIC, 2017, pp. 55–56, 61–62). Dominating this online space is a major objective of the CPC, which fears that the control of public discourse will slip away from the legacy media into the hands of large, online, commercial operators. Although the “BAT” companies (Baidu, Alibaba, and Tencent), which run the most successful online sites, are not enemies of the CPC, the latter does not have the same grip over their policies and personnel as it does with newspapers and television. Consequently, it is concerned that it might not be able to exercise the same control over what they report and how they report it. Despite CPC limits on the content they can produce, the news sites of native Internet companies are enormously popular and outstrip even the most successful online operations of legacy media (Huang, 2016; Tang & Huang, 2017). As the Deputy Editor in Chief of the newsgroup of a large inland province told us: “What is the central government thinking? To build strong new media and to influence opinion, to defeat the commercial media [the popular digital offerings of companies like Tencent], and to control ideology” (Informant 5a, May 9, 2017). For the CPC leadership, other factors, including the survival of commercial newspaper titles, are very much secondary considerations. According to a senior manager of a newly-reorganized press group in an East Coast city, the mayor addressed its leaders. [He] proposed that newspapers need to be reconstructed. He said “Is it necessary to have so many newspapers? These newspapers were established in the Golden Age [from the mid-1990s to the early years of this century]. If we establish a newspaper, we expect this newspaper is going to make a profit.” So the first thing the media group did when it was set up was to close [a prominent evening commercial title]. (Informant 3a, February 28, 2016.) The party newspapers do not face closure, because the CPC is still committed to having a print-based voice, but the threat is real for the other titles in every press group. The party press has a range of income opportunities that are not open to the commercial press, and these have become much more important over the last few years. This economic shift has reinforced the increased political control of the press instituted by the Xi regime and is changing the balance inside the press groups. Direct subsidies The first of these opportunities is the revival of the direct subsidy. The CPC gives financial support to titles that it deems politically important. These subsidies tend to be to the political titles directly tied to the CPC’s propaganda goals: in the Southern Press Group, for example, the political paper, Southern Daily, receives a subsidy, while the more commercial Southern Metropolis Daily does not. Some titles, therefore, have an alternative source to replace lost advertising and subscription revenues. These subsidies can be very substantial: according to several of the interviewees, the Guangzhou Daily Group received a subsidy of RMB 350,000,000 (around US $52,500,000) in 2016 alone. The party titles thus enjoy a degree of security not open to commercial newspapers. As one informant told us, no matter how bad the general situation is, the party title in his group “will never be closed as long as the party still rules the country” (Informant 5a, May 9, 2017). In return for financial support, the government wants absolute loyalty from the party paper. If the paper has to think about economically-rational behavior to survive, it is believed it may eventually come into conflict with the needs of the party. This means that direct subsidies are not perceived as an unalloyed benefit by their recipients. The party gives its support on carefully-prescribed terms that match its political priorities. Quite apart from having to display uncritical loyalty to their benefactors, the recipients cannot use this income to support the general activities of the party title, let alone help the group as a whole. The bulk of these new subsidies are designed to help establish new media outlets: If there is a special project, the Party will give you funding. For example, the new media project, the media convergence project, they will give you money. … As a political task, it must be carried out. We have to do it. … It may succeed. But whose success? It is a success for the central government, creating greater influence and occupying an important position in directing public opinion. But to our newspaper it is a large investment with no economic gain. It is a loss. (Informant 5a, May 9, 2017) While the CPC is prepared to provide funds to help the party press solve particular problems—in this case, it did provide some subsidies to offset a shortfall in circulation revenues—the main investments it is prepared to make are designed to push the party press ever more firmly into the online environment. Indirect subsidies Other changes in CPC policy have also resulted in more funding to party titles, in the form of indirect subsidies. The Deputy Chief Editor of another inland press group’s party paper explained how shifts in government policy provided opportunities for his title to expand both advertising and readership. One consequence of Xi Jinping’s anti-corruption drive is that there has been a crackdown on local party leaders’ lavish expenditures on hospitality, meals, cars, overseas travel, and so forth, which has meant that the Propaganda Department now has more funds for direct subsidies and other government offices have money to spare in their budgets (Informant 2a, June 3, 2016). If it cannot be spent on supporting the normal lifestyles of local political leaders, then they prefer to spend it on promoting themselves through advertising in the party press. The political crackdown has also affected the ambitions of local leaders. It is now much more difficult to amass a personal fortune through corrupt practices and, as a consequence, officials are more focused on their own political careers. To facilitate their advancement, they need good coverage in the party press. One way to get such coverage is to channel part of their official budget into advertising (Informant 5a, May 9, 2017). This government-based income has the great advantage of being considered much more reliable than purely commercial advertising, as it is not directly subject to market fluctuations. At the same time, Xi Jinping’s tightening of central control and the political dimension of the anti-corruption campaign has meant a greater stress upon the importance of party policy to the daily conduct of government business. Local party bodies are keen to demonstrate their loyalty to the leadership. One of the ways that they have done that is by increasing their orders of party papers and making sure they are sent to every section of government within their remit. More generally, the evolving social structure of China means that there is a new potential audience for official papers. The close interpenetration between politics and economics in China means that relations between the business and professional classes and different levels of the CPC have always been a vital element for the conduct of daily life. In the relatively decentralized—and more or less openly corrupt—period before Xi Jinping’s assumption of power, many of these relationships could be handled informally, through personal contact. While the anti-corruption campaign has certainly not ended such practices, it has rendered them less central and less explicit. Learning about party policies through reading the party paper is now much more important as a basis for decision making on the part of a broad layer of the middle class who would previously have relied more on informal channels. As a consequence, the circulation of party papers has risen. One informant told us that the circulation of the party paper in his group had grown from 170,000 in 2015 to an estimated 200,000 by the end of 2016. This sales growth took place despite a 25% rise in the cover price, although this was admittedly only from 0.8 RMB per issue to 1 RMB (1 RMB is worth US $0.15 at the time of writing). As this informant said, “we not only increased the price but we also achieved a higher circulation: this is the advantage that the party newspaper enjoys” (Informant 2a, June 3, 2016). This higher circulation is not an unalloyed benefit, either: “every copy is a loss of money. It is sold at just a bit over one yuan per copy, but the cost is far more than one yuan” (Informant 5a, May 9, 2017). The increased circulation of the political press is, however, a positive result so far as the CPC is concerned, since it still wishes to retain a powerful printed mouthpiece, and it is prepared to support titles who lose economically as a result of their political success. Exploiting political advantages In line with the new centrality of party and government advertising to the overall finances of the press group, the party newspapers are no longer simply the political leadership of the group, but also take economic initiatives. In the case of Group 2, the Deputy Chief Editor leads delegations from all the group’s papers in visiting the party and government leaderships of the lower administrative levels in their province. When they arrive in a district, they promise to make full use of the group’s media resources to give positive coverage to every area of local activity, such as the efficiency of government, social trends, and the successes of the local tourism industry. At the same time, they say directly to the local leadership that, in return, they expect them to spend money on advertisements in the group’s papers. As a result, the local officials see reports on their work in the provincial press as displaying their achievements to the provincial leadership, and the arrangement is a win-win situation for both sides (Informant 2a, June 3, 2016). A second way in which the influence of the party title can be used to help the group as a whole is in repositioning failing titles. The fall in advertising revenue means that some titles are no longer viable. Several press groups told us that they had newspapers that fell into these categories: according to Informant 2a, “we have several newspapers dying in our group now” (June 3, 2016). Another group had a weekly lifestyle newspaper that was too up-market for local conditions, and considered closing it down. It has survived thanks to the provincial Forestry Office, which wanted to publicize its own activities and undertook to subsidize the paper in return for editorial influence (Informant 1b, the group Deputy Editor in Chief, May 21, 2016). Another senior editor from Group 1 argued that seeking official sponsors for failing titles was the only way that newspapers could hope to prosper in the present climate: In the current situation, newspapers can survive if they have backing, otherwise it is difficult to make a living. Without backing, it means relying on the market. When the market goes from bad to worse, it means that a newspaper loses its only source of support. (Informant 1c, May 18, 2016) In order to find a source of support, the senior management of a newspaper group is prepared to alter the entire character of a newspaper: changing it, for example, from a commercial daily focusing on economic news into a party paper acting as the mouthpiece of a newly-formed administrative area (Informant 2a, June 3, 2016). Side-line businesses Another major concern of the groups’ managers is with the “side-line businesses” that have long been an important part of the overall revenue of both commercial and party titles. Newspaper groups have, for years, been the center of a range of other commercial activities. Some of these, like property sales, are related indirectly to publishing activity, but others (food supply, for example) have no relationship with journalism. The Deputy General Manager of Group 1 described the current situation in his group in these terms: We have a lot of businesses, including printing, real estate, distribution, exhibitions, and making small-scale loans. The business of printing and money-lending each makes more than 10 million yuan a year, and the real estate project makes more than 40 million. We also get project funds from the government. And advertising is still the biggest part of our income, but it has decreased from 130 million yuan to just over 80 million yuan per year. Newspaper sales make up a relatively small proportion of this total. As everyone knows, subscriptions don’t make any money: our daily paper sells for a few cents each but has quite a few pages. The business of newspapers hardly makes any profit. (Informant 1a, May 20, 2016.) As advertising revenues and circulation decline, the side-line businesses have increased in importance, and are now central to the strategic thinking of some groups. Group 1 envisages that they will come to dominate their entire activity: Strategic planning for subsequent years is composed of numerous elements, but the core in the field of advertising and management is to allow the newspaper business to continue to develop. In order to do this, we need to shift the balance of our income. The current ratio is 3:7. That is, of every 10 yuan we earn, 7 comes from traditional activities associated with publishing and 3 comes from the non-newspaper businesses, such as exhibitions, commercial activities, and project planning. We want to achieve a 5:5 ratio in order to make sure the company is safe. We would like to raise it to 7:3 so that we would have no need to worry about the fall in advertisements because other income would keep us going. I agree with this strategy, which is the direction every newspaper should follow. (Informant 1a, May 20, 2016) As these side-line businesses grow, the importance of the newspaper publishing that was the original purpose of the group becomes financially less and less important. As a result, apart from the growth generated by the side-line businesses themselves, there is strong pressure to utilize the material and journalistic resources of the newspaper to help them grow. Falling circulation means that newspapers find themselves with a disproportionately large distribution network, designed for more prosperous times. These surplus resources are increasingly being utilized for non-journalistic purposes. Group 1 again provides a vivid picture of the synergies that they are trying to develop: I have to make effective use of our distribution resources, including our vehicles and personnel … city XX is more than 400 kilometres from [the provincial capital]. Newspapers are printed at about 0300 and the distribution vehicle drives to XX every day. In the past, it carried nothing on its way back. With our new service, the vehicle may come back laden with potatoes, farm products, or other items. Previously, the delivery staff took newspapers to subscribers in the morning and had nothing to do later in the day. Now they take eggs and fruit to our customers in the afternoon. Overall, we aim to give you what you want. (Informant 1a, May 20, 2016). This example involves only transport facilities, but there are other initiatives which involve the papers more closely in directly commercial activity. One example comes from an East Coast group, which has been particularly active in launching new ventures: Our advertising income from real estate is, in fact, declining, but we set up a platform dedicated to house purchases. We help real estate companies sell their products and provide a service to users. The platform is a bridge. Customers buy real estate via our platform and we get a commission. We are not agents; we do not participate directly in the deals. We just introduce people. In the past three years the total number of purchases is more than 10,000 and each one generally represents a commission of between 10,000 and 20,000 RMB. If we subtract the costs of providing the service, we are still making almost 1 billion RMB from this venture. (Informant 6b, April 2, 2016.) The line between journalistic activity and commercial activity was never sharply drawn in China (Lee, Cui, & Zhang, 2015; Xu, 2016; Zhang, 2009). It is, however, becoming increasingly blurred as the emphasis shifts towards the side-line businesses. From print to mobile The online audience in China is very large, and ensuring that the voice of the CPC is dominant in this huge arena is one of the party’s main ideological concerns. Given the structure of the Chinese online audience, this means a stress upon mobile phones. As the Deputy Chief Editor of a press group in an East Coast province, who is responsible for new media initiatives, said: Everyone knows, nowadays it is not enough only to publish newspapers. Even websites based on Personal Computer (PC) are not enough. We must get into the mobile market. … Also, it is a must for political reasons. The party wants to maintain the high ground of directing public opinion, so we need to be able to support it. (Informant 4f, April 19, 2017). As a consequence, the CPC has pushed very hard for the news groups to take a range of initiatives that will allow them to gain this “high ground.” Once again, the outcome of these changes has been to shift the balance within the press groups. For the party press, the transition certainly involved new ways of articulating the political objectives of the CPC, but it did not involve any serious questioning of the role of the newspaper. As the Deputy Manager of a major news group in an East Coast city told us: For [the parent party paper], the biggest problem is how to present itself in an innovative way in the context of the Internet. This is the first time the newspaper group has done this. The goal is also very simple, for the party press there is no need to explore the functions or meaning of being a newspaper. Naturally, it represents the voice of the party committee. So the problem is how to do it innovatively. Hence, the transformation is almost painless. It does not need to explore the business model. Its target is the civil service community and the stakeholders within the city (Informant 3a, February 28, 2016). The management did not need to worry about the economic consequences of an online launch since it was certain that it would continue to receive funding. The online title has a core readership of party members and government officials, but aims more widely, both socially, in terms of those it describes as “city stakeholders,” and geographically, in terms of people anywhere who need to know what is going on in the city. Together, these groups constitute a potential audience for the expansion of the circulation of the party press (Informant 3b, March 28, 2016). The commercial titles have different strategies, both editorially and commercially. While most newspapers have long had Web-based online editions, today they have expanded into the whole range of possible outlets, tailoring them to the mobile phone–dominated habits of Chinese audiences. Some of these initiatives are driven by editorial experimentation. One example is an online-only newspaper launched in a major East Coast city. Directly supported by the local party and subsidized, at least in its initial phase, this title is self-consciously experimental in organizational structure and in journalistic practices. As one senior journalist told us, “we cannot entirely copy the contents of the printed newspaper. In the new media era, readers do not need us to provide a whole section of news. They only need specific, useful information that can be sent to them directly” (Informant 3c, March 12, 2016). In this title, the managers and journalists claim that their motivation is primarily journalistic and that, at least at the time of the interviews, commercial motivations were kept at a distance from editorial decisions. While there has been some interchange between journalists and the advertising department, this remains limited (Informant 3c, March 12, 2016). In other groups, however, the commercial imperatives are primary. One East Coast provincial group has branched out very widely from journalistic activities, purchasing online gaming companies, amongst other projects. These acquisitions are legitimized on the grounds that they attract large numbers of active gamers who might, potentially, be transformed from users of gaming sites to an audience for the group’s news sites (Informant 6d, April 1, 2016). From news to services The pressure to succeed online is leading to a redefinition of journalism, away from informing the public and towards servicing them as consumers. The pressure to provide services is particularly acute in the commercial newspapers. According to the Editor in Chief of the commercial paper of another inland group, “making a profit on news is difficult.” The group found that its hotline, which it set up to allow readers to ring in with story leads, was less and less used, since people now turned to social media to spread interesting stories and tips. The hotline has been converted into a community-service channel. The paper has used its prestige to link up with hundreds of local merchants, and calls to the hotline provide links to the goods and services they offer. Service is the extension of media influence and credibility. Based on them, service extends to the field of community service. It could merge into every field of city life, with lots of information, such as household goods, education, leisure, tourism, and pensions. And these services could be organized into an industry, which could be operated on the basis of endorsements, using the credibility of the media. The social influence of our newspaper group is fairly strong in this city … so we can achieve that goal. Our reputation is derived from our strict regulation of the participants. When a merchant enters our platform and makes a deposit we investigate their service: its cost, the process involved, and the way it is regulated. If there is a complaint, it is handled by the newspaper rather than by an individual consumer. If the consumer wants a refund, we compensate them immediately. If the customer wants an investigation to establish compensation, the media has the power to publicize the problem. This all sustains our credibility (Informant 2b, June 3, 2016). This view is widespread: the Editor in Chief of a famous commercial paper on the East Coast told us: “the way to make money is to provide information and services, not the news” (Informant 4a, April 27, 2016). The attempt to shift business from unprofitable news to the provision of services has led to closer links between the media groups and other local organizations, both political and commercial. One large eastern group, for example, has set up a travel media center which brings together journalists and other organizations in the travel business (Informant 6c, April 3, 2016). According to the Deputy Manager of this media group, they still “pursue the authenticity of news and unbiased news coverage” but “in general what we are doing is news plus services” (Informant 6a, April 3, 2016). These service-oriented initiatives have built new links between the news groups and government, since many of the organizations involved are official ones. As one leading manager said of their newly-launched app: The standard definition of [our] goal is to be [the province’s] authoritative voice. We want to offer governmental services to serve [the province’s] people and people who are concerned about [the province]. …We must get into the mobile market. It is a must for economic reasons. Information is valuable, especially credible and authoritative information … in addition to providing news, we also want to do a more [commercially] valuable job. That is, to provide services, including governmental services and people’s livelihood services. People need to deal with the government all the time: to pay traffic fines to the police, to make appointments at the hospital, to register their marriage with the department of civil affairs, to pay taxes, to register properties, etc. We can make a link. People can find the government through our mobile services. (Informant 4f, April 19, 2017) The government is very concerned to be seen as the motivating force behind the provision of these services. Consequently, this app originates from the party paper rather than its much more famous commercial sister. A similar desire by the CPC to be identified as the motivator of these new initiatives occurred with Group 5. According to the Deputy General Manager of their online presence, the group had long had a very successful Web presence named for the region it serves. The director of the provincial propaganda department visited the group and insisted that it renamed its online presence, both on the Web and their mobile app, after the provincial party paper. Echoing a famous phrase by Xi Jinping, he claimed that “all new media projects should have the surname of the party paper” (Informant 5c, May 11, 2017). Discussion and conclusion The evidence reviewed here demonstrates that the behavior of both readers and advertisers in response to technological change has altered the political economy of the industry in important ways. As a result of the affordances provided by online technologies, and notably the mobile phone, audience attention and commercial advertising revenue have ebbed away from legacy newspapers. Like media organizations everywhere, the Chinese press has attempted to overcome these problems. In the Chinese context, almost all of these new mechanisms have involved a much greater role for the party press. Subsidies, both direct and indirect, have re-emerged as significant parts of the overall revenues of newspaper groups, and these have mostly accrued to the party titles. When groups have attempted to find sponsors or to trade promotional advertising for editorial support, it has been the political clout of the party paper that has been decisive. The move online has been encouraged and partly financed by the CPC, and has led to the press groups playing a more prominent role in publicizing government services. Symbolically and practically, these new services have been branded under the name of the party paper. Many of the new services have little relationship with news, as traditionally understood, and some involve the direct engagement of the news group in political and commercial activities. Overall, the cumulative effect of these changes has been to strengthen the position of the party press, to increase the dependence of the whole industry on one form or other of government support, and to increase pressure on journalists. A senior editor on a metro paper told us that: I have worked in this newspaper for nearly 20 years. Now is the most difficult time. The editor in chief is under great pressure. I think he has aged much faster than usual in the past year. His hair is completely gray now. I feel pity for him (Informant 4c, May 10, 2016). The paper has cut its staff from 2,000 people to around 1,300 and there are rumors that there will be another 500 cuts soon (Informant 4d, April 17, 2017). In April 2016, the Chief Editor said that there was now an “editorial staff of 500, which is still very big but it is much smaller than when the paper was in its golden years.” Reporting budgets are tight and there are no longer the resources to make the major investments in big news stories that there were, for example, at the time of the Wenchuan earthquake in 2008 (Informant 4d, April 27, 2016). The economic pressures have had a cumulative effect on the status of journalists and their ability to resist censorship. The words of a senior editor from an inland metro paper contrast sharply with the quotation above about a similar paper 15 years before: When we did well [economically], the government respected our newspaper. The reporters enjoyed high social status. Even the most junior “little reporter” was great. I remember one of the most influential reports we did was a series on bans. We ran eight articles in which we examined how the different bans issued by the government were implemented. Which was enforced, which not enforced, and why there were these differences. When we ran the eighth report, the government was clearly worried. The propaganda director asked to see me and said: “Can we discuss this? Can you stop for a while and perhaps you can continue next year?” That was the manner in which the propaganda director talked to us. He discussed with us and wanted us to understand his reasoning. Now, it is simple and direct: “No reporting on this! If you do, you face punishment! There is no room for negotiation.” (Informant 1c, May 18, 2016). Certainly, some of this change in attitude is the result of the much more repressive political environment of the last few years, but the decline in economic fortunes has not simply been a business matter: it has impacts on the status of the commercial papers and, thus, on the degree to which they can continue to ask awkward questions and publish embarrassing reports. This article contributes to broadening our understanding of the problems facing the newspaper press through the provision of data from outside of the developed West. Our conclusions must be tentative, since they are based upon a relatively limited sample of press groups. In 2017, there were 47 press groups in China and a total of 1,884 newspapers of all levels and frequencies of publication (General Administration of Press and Publication, 2018). Further investigations, based on a much broader sample and involving quantitative as well as qualitative methods, would be necessary to test the extent to which the rich data presented here is representative of the overall situation in China. Even with those limitations, however, this research identifies strong commonalities operating in both contexts as consequences of digital technologies. The major variation from the international pattern is that, in China, revenue falls were later but more rapid than in the West. From a comparative perspective, there are some striking similarities in the ways that the industry has responded to these developments. Newspaper companies both in China and the developed world have cut costs, including editorial costs. The use of editorial credibility to attract CPC sponsorship in China is not fundamentally dissimilar to the use of the same asset elsewhere to attract native advertising or even, as has been alleged against some newspapers, promising positive coverage in return for corporate sponsorship (Cusick, 2018). The use of the newspaper’s brand to promote side-line businesses is, in principle, the same in both cases. For example, The New York Times advertised 10 branded conferences in three continents from May to December 2018 (The New York Times, 2018a). Among their offerings was the Higher Education Leaders Forum in New York (The New York Times, 2018b). Tickets for this two-day conference were $1,450, which makes the International Communication Association (ICA) look a real bargain (The New York Times, 2018c). At the same time, many of the responses of the Chinese press to this global development are distinctive, since they depend upon national social and political structures and journalistic practices. Politically, the concern of the CPC to maintain its domination over the symbolic environment has led to a degree of subsidy, both direct and indirect, that is unknown in the West. By the same token, private subsidy by rich individual owners, as in the case of the Washington Post, is unthinkable in mainland China. Journalistically, the relatively weak division between the business and editorial functions of the press amongst Chinese journalists has permitted a more unproblematic and complete embrace of commercial imperatives than in the West (Wang & Sparks, 2018). These distinctive characteristics suggest that it would be valuable to compare the Chinese case with other authoritarian regimes at a similar level of development. The pervasive role of politics is clearly a factor in studies of Chinese media that distinguishes them from the current situation in the advanced world. Further comparative work would be necessary to determine both the balance between economic factors and political factors in shaping outcomes in such politicized environments and how far the Chinese response is typical of such regimes. In terms of the overall, theoretical question of the relationship between the state and market in shaping the kinds of journalism that are possible, this article suggests a more nuanced position than any of those outlined above. The argument that the market did indeed broaden the range of journalism in China, as it did at least for a time in the postcommunist countries of eastern Europe, is correct (Sparks, 2008). But, more recently, the market has had the opposite effect. The choices made by advertisers in placing their material are as much market choices as those made by readers in deciding whether to buy a newspaper and which title to select and, in practice, are much more important to its survival than sales. Market forces have moved the advertising subsidy away from the commercial press and plunged the latter into financial problems that have had severe impacts on journalism. The revenue streams that have replaced the lost commercial advertising are more dependent upon political favors and have increased the relative power of the party titles. As Xi’s regime has tightened its political grip over the media, the market has not acted as a counterweight to this pressure, but as an auxiliary force, pushing newspapers and journalists to conform to the CPC’s demands for neutered journalism (Svensson, 2017). The implication is that considering the state and market as antithetical forces that struggle to impose their individual teleologies upon the media is mistaken in the Chinese case. As Zhao put it, “one of the fallacies of the state-versus-market dichotomy is that it assumes an inherently antagonistic relationship between the Chinese media elite, their core urban readership, and the dominant Party elite” (Zhao, 2004b, p. 66). That is not to say that the relationship is harmonious: any society developing very rapidly will display considerable strains within elite groups, even when they are highly integrated, as in China, not to mention those between the ruling elite and the mass of the population. For a period of time, the developing market allowed some of those strains to emerge into limited public view. Today, that market is acting to help close such opportunities. The market has no necessary function pushing towards a more open media system. The relationship between the state and market, even in a highly authoritarian society with a powerful state apparatus like China, is not a static one, but varies according to technological, economic, and political factors. It follows that any general theory of the political economy of the media will need to reconsider the dichotomy of state and market. The empirical evidence demonstrates that, in China, the relations between the two varied, with an authoritarian state always in the dominant position. In northern Europe, the empirical evidence demonstrates that democratic states have acted to ameliorate the negative effects of the market and to sustain a more plural public life. We can generalize neither from the Chinese nor the Northern European model to a global political economy of the press in which the potentials of state and market are fixed. 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TI - Chinese Newspaper Groups in the Digital Era: The Resurgence of the Party Press
JF - Journal of Communication
DO - 10.1093/joc/jqy061
DA - 2019-02-01
UR - https://www.deepdyve.com/lp/oxford-university-press/chinese-newspaper-groups-in-the-digital-era-the-resurgence-of-the-fEpcp4VmUh
SP - 94
VL - 69
IS - 1
DP - DeepDyve
ER -