James Borton eyes the media Western publishers Go For It! Jing Xiang is poring over one of the hundreds of popular English language learning textbooks in Beijing's crowded and modern Zhongguancun Book Building. Located in the northwestern part of the city, across the street from Peking University, the state-owned seven-story mega-emporium is the Middle Kingdom's answer for meeting the increased demands for books among the nation's urban educated youth. Xiang, a 26-year-old systems developer for BlogChina.com, is now among the more than 250 million Chinese reading or studying English. China's accelerated market reforms and a relaxation of publishing requirements is spurring more Western publishers to visit not only the Great Wall, but distribution channels like Xinhua bookstores and the more than 60,000 private book vendors. "English textbooks, especially language learning materials, are now one of the fastest growth sectors in China's book marketplace," claims Charlene Gaynor, executive director of the Association of Educational Publishers. Over 40,000 people jam into the Book Building every day, to meet friends, and to peruse over 250,000 titles, most of which are in Chinese, plus an increasing number of imported English-language titles on science, engineering, computing, and language. Its attractive, relaxing library-like environment also encourages cultural events. However, there is competition for the student bibliophiles since another older landmark, Book City, is minutes away from Zhongguancun. "The old Book City is still surviving like a miracle. There are many young people walking inside of the Book City, because they still have a couple of excellent bookstores, for example, a pretty cool mathematics bookstore called JiuZhang Book Store (Nine Chapters Book Store) which offers textbooks on all branches of mathematics," claimed Xiang in a recent email to Asia Times Online. The demand for English language materials has been fueled by several factors: China's entry into the WTO, the upcoming 2008 Olympics, and the increased difficulty faced by students in securing visas for travel abroad since 9/11. Never mind that English is already a curriculum course for 120 million Chinese elementary students. There's a growing daily appetite for English-language books, and the international press is taking notice. Mike Meyer, in a March New York Times article titled "The World's Biggest Book Market", confirms that Chinese customers at Book City can choose between Harry Potter books, the predictable Dan Brown global bestseller The Da Vinci Code, and even Woody Allen books whose Chinese title, Mensa Whores, causes peals of laughter among the young customers. Meyer added that the store has the 2000 best seller Harvard Girl, the story of how two dedicated Chinese parents groomed their daughter to get into Harvard. The copyright page reads: 63rd edition, 1.76 million copies. It costs only US$2.41, the average price for a general-interest text, which illustrates the difficulties both foreign and Chinese publishers face in trying to make profit. Xin Guangwei, the author of Publishing in China: An Essential Guide, indicates that translations are only a miniscule 6% of the 200,000-plus annual titles published. China in 2004 had over $300 million in book sales. However, the copyright trade has been brisk over the past several years. Government statistics reveal that China imported 58,077 copyrights from overseas publishers between 1995 and 2003. Industry analysts agree the publishing and book distribution marketplace is undergoing dramatic change. China has approximately 500 book publishers, 320 audiovisual product publishers and 121 electronic publishers, according to Yu Yongzhan, deputy director of the General Administration of Press and Publications. The entrenched, large state-owned players are getting stronger, but profit margins appear to be falling. In 2003, the per capita book consumption in mainland China was approximately $3.87, compared to almost $94 in the United States. But piracy continues to threaten China's 500-plus publishing houses as legal publishers lose between ($24-36 million) to piracy every year, despite the government's WTO pledges to protect intellectual property. In the past two years, the government has confiscated more than 43 million copies of pirated books, and nearly 3.6 million pirated periodicals. Chinese government officials continue their vigilant fight against piracy, as major crackdowns are launched each year and police conduct regular inspections. However, market observers suggest that sustained success for the government in clamping down on piracy may be very difficult, given that the illegal publishers work in small groups, produce in small quantities and frequently relocate their operations. Robert Baensch, director for the Center of Publishing at New York University and a frequent traveler to China, believes that improved industry intelligence may improve China's book trade. In an article written for Publishing Trends in March 2004, Baensch wrote: "A company similar to Nielsen BookScan has begun to operate in China. Called Open Book, it collects data from 160 government-run retailers and sells the reports to publishers. Data collection is complicated by the government issuance of all ISBNs. As numbers are not handed out freely, publishers sometimes reuse the same ISBN for several titles." Reforms in publishing aid foreign publishers' distribution The changing book publishing landscape has brought about a series of high-profile industry transactions that will benefit Chinese book consumers and also facilitate the creation of distribution networks by Western publishers. The recent joint venture between Germany-based media conglomerate Bertelsmann and the Liaoning Publishing Group (LPG) demonstrates the improved roadmap for Western publishers. This business structure is enabling the Bertelsmann book club, a major subsidiary of DirectGroup Bertelsmann in China that has been operating in China since 1995, to expand from book retail to wholesale book sales. Founded in 2000, LPG is the first large-scale publishing group in China to operate under a modern enterprise system, which includes production based on market demand utilizing state-of-the-art publishing equipment. Facilities for editing, printing, distribution and material supply are all integrated into one modern corporate structure. "As a wholesaler, we have the chance to expand our cooperation with the Chinese book market, especially to promote our new concept of integrated marketing and distribution, which connects publishers and retailers even closer in book promotion, and thus to create a win-win situation for both the publishers on the upper [level] and the book retailers on the lower [level]," said Pan Yan, a spokesperson for Bertelsmann China, in an Asia Times Online interview. As an active player in the Chinese book market, Bertelsmann Book Club established club segmentation programs last year to adapt to market changes, and has developed four popular clubs: Youth Club (which targets younger readers of 16-22 years), Club Mature (which targets mature readers older than 22), Beauty Mum (targeting parents with children between 1 and 6), and Be-Stylish (which focuses on gift selling), according to Yan. The Bertelsmann Book Club's senior public relations supervisor, Miranda Yao, said BMC reaches over 1.5 million members nationwide through the use of catalogs, Internet and chain stores. Included among their best-selling titles are Andersen's Fairy Tales, and the translated novel Lust by Austrian Elfriede Jelinek, who was awarded the Nobel Prize in literature in 2004. Last year, Harper Collins Reference Publishing of the UK inked an agreement with China's Foreign Language Teaching and Reference Press to cooperate in publishing bilingual dictionaries. Along with the release of an English/Chinese and Chinese/English dictionary, Harper Collins plans to expand their group sales under their own name with new volumes, including pocket-size reference books. Thomson Learning Asia, a part of The Thomson Corporation and a relative newcomer to China, has also revealed that the Go For It! series of English language textbooks has surpassed a major milestone in China, with more than 15 million copies adopted so far this year and 50 million in all since September 2003. Go For It! (China Edition), a product of the cooperation between Thomson Learning and the People's Education Press (PEP), is being used as part of curriculum reforms in 29 provinces, and was recently selected and adapted as a basic textbook series for all middle schools in China. "The success of Go For It! demonstrates that co-publishing is a very good way to market English textbooks in China," said Gong Yafu, president of Foreign Language Publishing, a subsidiary of People's Education Press in a recent release. Even the historic Xinhua bookstores, the bedrock of Chinese book distribution for over 67 years with more than 12,800 locations in China, are undertaking modernization and developing a new financial structure to meet the urgent demands of the marketplace. Xinhua China Ltd completed a transaction in early 2005 acquiring 57% of the China-based Xinhua Circulation & Distribution Center Co Ltd, becoming the only national book distributor in China. However, the WTO pact, which will allow foreign companies to own distribution networks, may prevent Xinhua from gaining a monopoly over distribution. "New management and North American business practices are transforming Xinhua into a distributor capable of meeting the demands of China's new market economy," says Henry Jung, CFO and director of the company. James Borton is a freelance journalist and currently is writing a book on China's media. He can be reached at asiareview@yahoo.com. (Copyright 2005 Asia Times Online Ltd. All rights reserved. Please contact us for information on sales, syndication and republishing .)