6 Consumption of cultural products won’t wear out physical materials but will enrich people’s spiritual life. In times of economic crises and depressions, people would, more often than not, seek spiritual comfort and inspiration to further boost their career from cultural products like film and television, books and magazines, music, fine arts and performances. And this tendency results in the anti-cyclical phenomenon in the culture industry and helps it rise above the economic swamp. During the first quarter of 2009, despite the slack growth of many other industries in China, the culture industry functioned rather well with an average growth rate of 17 percent. In the case of China, the statistics of last year indicated that the national economic growth rate of was around 8 percent while for the culture industry the figure reached 16 percent. Reflecting on the past experience, we can see that in times of economic crises or depressions, the culture industry would thrive. From 1929 to 1933 when America was trapped in the Great Depression, the entertainment industry on Broadway and in Hollywood enjoyed an unprecedented prosperity, which not only boosted the confidence of American people but also shaped the later well-known “American spirit”. In the Asian financial crisis of the 1990s, the Republic of Korea transformed its economic development pattern promptly and established the culture industry as the nation’s foundation. After that, its major cultural products of comics, animation, film and television came to the fore and gave rise to the worldwide “Korean fad” through which the culture industry activated its domestic consumption, prominently improved the country’s national image and drove the export of cars, mobile phones, food and drink, apparel and accessories.

7. Culture industry is widely correlated and can stimulate other national economic sectors. A closely correlated industrial chain and industrial cluster hinged upon cultural content is taking shape as a result of the fact that the culture industry is permeating into and integrating with various industrial sectors of the national economy on a large scale.

8. Culture industry is an important channel to disseminate national values and enhance national cultural soft power. Being efficient in dissemination, permeation and influence, the culture industry has grown into a major industrial sector that supports and promotes a nation’s soft power. Take the United States as an example——it has achieved universally recognized mighty soft power by earnestly promoting its culture industry. The country’s former president Ronald Reagan said “Wherever Hollywood movies go, the American values follow.” As a representation of American culture and American spirit, Hollywood blockbusters, by drawing on commercial campaigns and copyright licensing, stretch to the rest of the world, create considerable economic benefits and deeply affect the values and aesthetic taste of people all around the world. This example demonstrates how effectively the cultural products could permeate into other areas and reveals the soft power in them.

Now we come to the second part. I’d like to take this opportunity to introduce to you the progress in China’s culture industry.

Ⅱ. The progress in China’s culture industry

In China, when we talk about the industry of culture we refer to the operating industries involving the production of cultural products and the proffering of cultural services. Among them, the following nine industries are the key divisions, including: film and television production, publishing and distribution, printing and duplicating, advertising, performing arts, entertainment, cultural conventions and exhibition, digital content and animation.

I think a little explanation is necessary for this. In China, we generally divide the cultural content into two categories, one is the public culture service and the other is the aforementioned operating culture industries. On one hand, we should devote ourselves to the construction of a public culture service system covering the whole society. Under the guidance of the Chinese government and funded by the government’s investment, this system will use social funds to guarantee people’s basic cultural rights and interests and meet their basic cultural needs. The public library system, as well as the public museum system, is a case in point; they are free for all and embody the principle of public-welfare, equality and convenience. On the other hand, as for those culture industries with a competitive nature reflected in their market-based and –oriented resources allocation, we call them operating culture industries. We can satisfy people’s increasing diverse cultural needs by giving permission to the entry of various social capital——state-owned capital, private capital and even external capital, and by letting them compete in the market. The culture industry we are talking about is the latter in which the market functions as the fundamental factor in allocating resources.

With the gradual improvement of people’s living standard, the implementation of culture industry police and further reform in the culture system, China’s culture industry takes on a new flourishing appearance and steps into the new rapid development period after preliminary exploration, initiation and cultivation. According to statistics, since 2004, the national culture industry maintains a considerable growth momentum with its average annual growth rate exceeding 15 percent, six percentage points higher than the GDP growth rate over the same period. From 2008 to 2009, facing the financial crisis, the culture industry continued to develop in the unfavorable conditions and came into the spotlight in the dreadful economic downturn. In the first half of 2009, the growth rate of China’s culture industry reached 17 percent, much higher than that of the nation’s GDP and of tertiary industry. Thanks to the development of internet, digital technology and information technology, the emerging culture industry, including animations, comics and games, digital music and digital publishing is taking off, which enlarges the range of the culture industry and enriches the content of cultural products and services. In this way, people’s spiritual and cultural needs can be satisfied through the consumption of cultural products and the culture industry has become a new driving force in economic growth.

Last July, in order to give full play to the culture industry in adjusting structure, expanding domestic demand, increasing employment and stimulating development, the State Council adopted Culture Industry Revitalization Planning, making the culture industry a national strategic industry. Following the planning, we will take effective measures to develop the culture industry in a sound and rapid way:

First, strengthen the guidance of the planning. We should earnestly implement the Culture Industry Revitalization Planning and complete the major programs and projects on schedule. We should also take the development planning of the culture industry into consideration in devising the Twelfth Five-Year Plan for social economic development. Starting from the settlement of thorny problems and contradictions in the cultural construction, then the establishment of development goals, basic planning, main content, major projects, and safeguard measures for the next five years, we will veritably set the Culture Industry Revitalization Planning the guide to actions during the Twelfth Five-Year Plan period of time.

Second, increase government’s capital investment and financial support. Aimed at granting subsidies for loans and projects, the special funds for culture industry development has been approved by the Chinese government as a way to support the culture industry. The Ministry of Culture has reached a series of strategic cooperation agreements with the Bank of China, the Export-Import Bank of China, Industrial and the Commercial Bank of China respectively, so as to lead and encourage financial institutions to innovate financial products and expand financial services based on the characteristics of cultural enterprises. In the future, we will pump more money from the pool of national revenues into special funds, vehemently increase financial support, develop credit products applicable for cultural enterprises and help them finance in the capital market. We will ensure that culture property exchanges run well and will set up an investment fund for China’s culture industry.