China: Guangdong is Booming

China: Guangdong is Booming

China: Guangdong is Booming

UC Browser, a mobile internet software developed on the Chinese mainland, has provided services to over 150 countries and regions with over 1,000 million overseas users. Its market shares in India and Indonesia have reached 55.4% and 47.5% respectively.

Meanwhile, Kingsoft Game, though scarcely known in China, has become very popular among the youths in Vietnam and other countries and regions in Southeast Asia.

Both companies are from the same Southern Chinese province — Guangdong, China’s economic powerhouse.

Guangdong has been renowned for its manufacturing industry. Now its cultural industry and cultural export have caught up and gained astonishing speed.

According to the latest statistics from the National Bureau of Statistics of China, in 2016, the added value of cultural industry and related industries in Guangdong hit RMB 425.66 billion, a year-on-year growth of 16.67%, the highest growth rate in the past five years. The figure accounted for 5.26% of the province’s GDP and 1/7 of the total amount of the nation’s cultural industry, topping any other province in China. The sector has become a pillar industry in the province.

The rapid growth of Guangdong’s culture industry has also boosted the export of cultural products. In 2016, the import and export volume of Guangdong’s cultural products reached US$43.79 billion with the export volume amounting to US$41.81 billion and, topping any other province and realizing a trade surplus of US$39.83 billion.

“It is great to see such a rapid increase of Guangdong’s cultural trade against the doldrums of general trade and processing trade,” said an official of the Cultural System Reform Office of Guangdong. Now the province has a variety of leading export enterprises and brands in cultural industry ranging over animation game, creative design and cultural equipment manufacturing; and their products have been exported to over 160 countries and regions. The games alone realized an export volume of RMB 17.6 billion and they have found market in over 100 countries and regions.

Cultural confidence is a kind of self-confidence, more fundamental, broader and deeper. Cultural confidence is under the attention of different fields in China. “To implement President Xi’s important instruction on cultural confidence, we have focused on the prosperity of culture industry and export of cultural products so as to turn soft power into hard profits,” said a top official of the Publicity Department of CPC Guangdong Committee.

In 2016, Guangdong made efforts to carry out cultural reform and innovation while promoting cultural industrial transformation and upgrade. As Guangzhou and Shenzhen accelerated the construction of the national demonstration bases for culture and technology integration, the province saw leading cultural enterprises mushroom and new cultural industries take shape. Several industrial giants in the field of Internet cultural industry came to the fore. The integration of culture and science & technology, culture and Internet and culture and finance saw amazing development.

The apps of Wechat, QQ and KuGou, all from Guangdong, are among the most popular mobile apps for users all over the world with downloads all surpassing 500 million. In 2016, the output value of Guangdong’s digital publishing industry reached RMB 180 billion, ranking first in China; the animation industry, RMB 40 billion, accounting for over one third of the national total. The province’s industrial output value of online music accounted for almost 50% of the national total; and its revenue of the game industry amounted to RMB 134.5 billion, making up for 73.4% of the nation’s total and 37.5% of the Asia-Pacific’s total; the output value of game and entertainment equipment accounted for 80% of the nation’s total.

According to the Information Office of the People’s Government of Guangdong Province, Guangdong also founded the first omnimedia group in China, the Southern Finance Omnimedia Corp. (S.F.C.) in 2016. To develop into a financial media group with integrated information services, the S.F.C is dedicated to three major types of business: media, data and financial transaction. The group also developed a batch of innovative projects such as the Chinese Free Trade Zone Information Website and the Institute of the Great Bay Area Studies.

To solve the universal financial bottleneck for cultural industry development, Guangdong launched three 10-billion-yuan funds respectively for the new media industry, the media convergence of local media group and the omnimedia cultural industry. The province also launched a 5-billion-yuan fund for the local film industry, boosting the transformation of the local cultural industry.

“Letting the government and market perform their own functions is a very wise step,” said Prof. Zhang Zhian, head of the school of communication and design of Sun Yat-Sen University.

On the one hand, Guangdong increased its financial investment on mainstream media; on the other hand, the province encouraged social capital to enter the field of the cultural industry, and solved such problems as mechanism, capital and human resources, providing impetus to cultural industry for its geometric growth, Zhang explained.

Statistics say Guangdong’s investment in the cultural industry has grown at a double-digit rate in the past two years and in the first half of 2016, the province’s investment in cultural creativity and design services increased 30.4%, and in radio, film and TV, 175.1%.

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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