You also won’t see public broadcasts of the Murdoch channel anywhere other than in Guangdong, the only province in China even partly open to foreign and private media competition. Beijing began opening the Guangdong market on a limited, case-by-case basis in 2001, apparently as an experiment to see how mainland media would fare against competition from Hong Kong, Taiwan and, most recently, the West. With a tradition of more open trade and vibrant publishing than the rest of China, Guangdong was likely chosen in part because it borders Hong Kong, and can’t keep out Hong Kong broadcasts anyway. Marcel Fenez, head of the Asian-media practice at PriceWaterhouseCoopers consulting, says: “There is no question that Guangdong is being used as a test bed for what else could happen in China’s media.”
Guangdong is now the gateway for foreign and private media trying to get a start in China. Since 2001, five foreign companies have won rights to broadcast to the public in Guangdong; in January, Xing Kong got approval to expand its cable reach to other provinces, but only to select hotels and diplomatic compounds. In April, Viacom’s MTV became the first international brand to broadcast to ordinary Chinese, but only in Guangdong. “This is historic. It is about getting entry into China in a significant way,” says Jessica Kam, MTV’s deputy general manager for Guangdong. Many other big international names, including Disney and Bloomberg, are working to obtain rights to launch in Guangdong.
The southern province is still seen as crassly commercial in Beijing, the political capital, and Shanghai, the financial capital. But it’s on its way to becoming the media capital. Guangdong TV ad revenues hit $1.6 billion in the first nine months of 2003, the most in China and more than the next two largest markets (Shanghai and Beijing) combined. Foreign companies are still allowed in only selectively and face other hurdles, including ad-profit-sharing rules that favor locals. The result is that locals still control 90 percent of the TV-ad market. “The real action lies with the provincial and national media conglomerates that are currently battling against each other,” says Vivek Cuoto, executive director of consultancy Media Partners Asia.
The competition can be fierce. Among hundreds of local media outlets, Guangdong television and CCTV are the top TV companies, and the Guangzhou Daily Group vies with the Nan Fang Group for publishing dominance. Papers like the 21st Century Business Herald, Southern Weekend and Guangzhou Daily are relatively fat with advertising, unlike the eight-page propaganda broadsheets typical of other Chinese markets. Guangdong is also one of the few places where small private radio stations operate legally.
While Beijing still sets the party line for all media, competition pushes Guangdong outlets to test the limits of censorship. They are the source of many of the exposes of official corruption and the SARS cover-up that have grabbed headlines recently. When the then President Jiang Zemin stepped down in March, some Guangdong papers skipped the ritualistic tributes and went straight to front-page profiles of his successor, Hu Jintao. This is as risky in Guangdong as in any province, and in the last two years, several local outlets have been closed for crossing the murky limits of the permissible.
Since China was not required to open its media sector to gain entry into the World Trade Organization, it’s free to tinker on the provincial level. The strategy appears to be to create companies with the size and savvy to take on foreign rivals. Shanghai and Beijing media groups are acquiring smaller rivals, and the Guangdong provincial government plans to consolidate five TV and radio stations into one company by early 2004. The rest of China may take “a decade or more” to follow Guangdong’s opening to media competition, says Cuoto. For outsiders like Sing Wang, CEO of Tom.com, a Hong Kong media group focused on mainland China, Guangdong is enough for now. “How big a [satellite] footprint do you need to make money in China?” asks Wang. “Guangdong has 80 million people. That’s bigger than many countries.” And still less than one tenth of China.
