Chapter 2
Overall Situation of China's Book Publishing Industry

By the end of 2004, China had a total of 572 presses (including 35 subordinates), out of which 219 were central (including 15 subordinates), and 353 were local (including 20 subordinates). With the exception of subordinates, 534 presses are included in the report as independent publishing units for statistical analysis.¹

In 2004, a total of 208,294 book titles were published, excluding pictorial books. Total assets amounted to RMB 44.345 billion, liabilities RMB 15.112 billion, and net assets, RMB 29.233 billion. Gross sales—including books republished with leased film—were RMB 59.289 billion, sales revenue, RMB 27.228 billion, profit RMB 4.515 billion, and stock value by list price, RMB 28.245 billion.

NATIONAL OVERVIEW

TITLES

In 2004, 208,294 titles were published in China, including 121,597 new titles and 86,697 republished and reprinted titles. Total impressions were 6.413 billion and printed sheets 46.559 billion using 1.095.2 million tons of paper. Gross sales were RMB 59.289 billion. Compared with 2003, book titles increased by 9.4%, new titles by 9.7%, and republished and reprinted titles by 8.9%. Total impressions decreased by 3.9% while total printed sheets increased by 0.7%. Gross sales grew by 5.5%. Total titles included 170,485 books,²

¹ Three presses, for various reasons, did not participate in the annual examination by administrative departments of industry and commerce.

²Indices here and in Figures 2.1 to 2.3 are from ChinaStatistical Data CollectionforPress and Publication 2005 compiled by the GAPP Department of Finance and Planning. Therein, publications are divided into books, textbooks, and pictorial books. We use, however, trade books, textbooks, and pictorial books elsewhere in this report according to the publishing industry convention.

a growth of 6.7% over 2003, of which 108,883 were new titles, an increase of 8.01%,and 61,602 were republished and reprinted titles, an increase of 4.57%. Textbooks, at 36,087, grew by 25.35% over 2003, including 11,756 new titles, a growth of 29.1%, and 24,331 republished and reprinted titles, a growth of 23.61%. The 1,722 pictorial book publications are not included in this report (Figures 2.1, 22, and 2.3.)

ASSETS

In 2004, China's book publishing industry reached a new peak. Total assets amounted to RMB 44.345 billion, with net assets at RMB 29.233 billion. Since 2001, the industry has maintained steady growth (Figure 2.4).

PRODUCTION

In 2004, book impressions in China (including books republished with leased film) totaled 6.413 billion copies, down 3.8% from RMB 6.67 billion in 2003. Gross sales were RMB 59.289 billion, an increase of 5.53% over RMB 56.182 billion in 2003. These figures include RMB 10.549 billion of gross sales from books republished with leased film, a decrease of 0.72% compared with RMB 10.626 billion in 2003.

SALES

Sales before Discount (SBD) In 2004, the total SBD of China's books were RMB 49.388 billion, an increase of 10.16% over 2003. Looking at the distribution of China's presses by SBD, one can see that three presses have a SBD over RMB 1 billion, 13 over RMB 0.5 billion, 22 below RMB 5 million, and seven below RMB 1 million. Other presses are evenly distributed in each sector. The data indicate that the distribution of Chinese publishers by SBD is olive-shaped.

Sales Revenue In 2001, the sales revenue of China's book publishing industry was RMB 21.979 billion, RMB 24.433 billion in 2002, RMB 27.680 billion in 2003, and RMB 27.228 billion in 2004. The average annual growth rate was 7.44% (see Figure 2.5).

PROFIT

The total profit of China's book publishing industry was RMB 4.713 billion in 2001, RMB 5.161 billion in 2002, RMB 4.725 billion in 2003, and RMB 4.515 billion in 2004 (see Figure 2.6). The profit decline in 2003 was caused, to some extent, by the SARS outbreak. Another reason for rising costs and declining profit was that in 2004 the Chinese government abolished the preferential income tax policy for university presses. In addition, the experimental public bidding for textbooks also resulted in a profit decline for some presses specializing in textbooks.

The per capita profit of China's book publishing industry was RMB 90,200 in 2001,RMB 98,700 in 2002, RMB 94,400 in 2003, and RMB 90,200 in 2004 (see Figure 2.7).The range of per capita profit was wide, with Zhejiang Education Publishing House topping the list with RMB 720,000 while 154 presses had less than RMB 10,000, making up nearly 30% of all presses. Nearly two-thirds of all presses, 341 in total, had a per capita profit of less than RMB 50,000 (Table 2.1).

STOCK

The total stock value by list price was RMB 21.548 billion in 2001, RMB 30.93 billion in 2002, RMB 24.038 billion in 2003, and RMB 28.245 billion in 2004 (see Figure 2.8). Stock increased by 17.5% in 2004 against 2003, but remained below that of 2002.

Statistical data released by the GAPP show that since 1996 the overall stock turnover rate (STR) of China's presses had been rising (Figure 2.9).

REGIONAL ANALYSIS

Most of China's presses are administered by local governments, with the exception of central presses and presses run by the People's Liberation Army (PLA).³ Every province, autonomous region, or municipality directly under the central government has its own presses that are basically the same in category despite their varying sizes. To facilitate analysis and comparison, this report includes the PLA-run presses in its numerical comparison (referred to as "PLA" in the following tables and figures). Central presseslocated in Beijing are collectively called "central presses" and are listed as a separate unit for comparison in the following tables and figures under the heading "Central." Statistics under the heading "Beijing" refer to regional presses in Beijing in terms of both absolute and relative values, but exclude central presses in Beijing.

NUMBER OF PRESSES

China's presses are evenly distributed. Not counting Central and PLA presses, China's 31provinces, autonomous regions, and municipalities have a given number of homogenous presses. For example, most provinces, autonomous regions, and municipalities have

³ Statistics in this report differ slightly in their statistical standards from those released by the GAPP Department of Finance and Planning. Several presses in the PLA system differ in regional characteristics.

a people's publishing house, education publishing house, children's publishing house, science and technology publishing house, ancient Chinese texts publishing house, fine arts publishing house, literature and art publishing house, and so on. Geographically, the eastern provinces have more presses that western China due to regional economic gap.

Shanghai, Guangdong, Liaoning, Beijing, Jiangsu, Shandong, Sichuan, and Shaanxi are heavyweights in publishing, with 40% of China's presses located in Beijing (Table 2.2). Here, Central and PLA presses are not included.

SCALE OF ASSET

Regions also differ from one another in terms of scale of asset. The total assets of central presses make up 43.8% of the total of China's book publishing industry. Six provinces, autonomous regions, and municipalities (including Central) have assets of over RMB 1 billion, eight have less than RMB 500 million, and others between RMB 500 million and RMB 1 billion (see Table 2.3).

The average rather than total assets of regional presses can better reflect the scale of such presses. By comparing the two rankings, one can see that total assets of regional presses were relative to the levels of regional economies and culture. The top provinces, autonomous regions, and municipalities have relatively developed economies and cultures (Beijing did not rank high as it excluded central presses). The low-ranking provinces, autonomous regions, and municipalities feature relatively lower levels of economic and cultural development or smaller populations. However, regions with comparatively more average press assets were not concentrated in developed regions:Guangdong, Zhejiang, Sichuan, and Liaoning are in the lower ranks while Chongqing, Gansu, and Ningxia were in the top three. The latter three have a small number of presses which are, however, highly concentrated. Jiangsu, Hebei, and Central were in the fourth to sixth places (see Table 2.4).

BOOK PUBLICATION

According to the data of annual examination reports from Chinese presses, 3.847 billion copies were produced in 2004, excluding those books republished with licensed film. Regional rankings by impression were consistent with assets ranking (see Table 2.5). Central presses produced 1.187 billion copies, accounting for more than 30% of China's total. The impressions of Shanghai and Jiangsu exceeded 200 million. Of all provinces, autonomous regions, and municipalities, ten had impressions of between 100 and 200 million copies, 11 (including PLA) between 50 and 100 million, nine less than 50 million, and only one less than one million.

Only one municipality had average impressions of over 20 million copies while six provinces, autonomous regions, and municipalities had over ten million. The majority had five to ten million, with ten provinces and autonomous regions having less than five million, in which Qinghai's average impressions reached only 588,000 copies (see Table 2.6).

In 2004, the gross sales of all Chinese presses were RMB 48.382 billion (excluding books republished with leased film). The gross sales of central presses exceeded RMB 21.1 billion, accounting for more than 43% of the national total. Besides central presses, nine administrative districts (i.e., provinces, autonomous regions, and municipalities) had gross sales of more than RMB 1 billion, 11 RMB 0.5-1 billion, eight RMB 100-500 million, and four less than RMB 100 million, including Ningxia, Tibet, and Qinghai with gross sales of less than RMB 50 million, much less than other regions. This indicates that regions differ greatly in overall production capacity (see Table 2.7).

Regional rankings by average gross sales of presses show that five regions, including Central, surpassed RMB 100 million. Other regions recorded figures within the same range (Table 2.8).

SALES

In 2004, the total sales volume of China's presses was 3.316 billion copies. The sales ranking of regional presses (see Table 2.9) shows that, besides the central presses, seven administrative districts had a sales volume of over 100 million copies, three had less than ten million, and the last one had less than 500,000.

Regional rankings by average sales volume (see Table 2.10) show that five administrative districts had an average sales volume of over ten million copies, 15 between five to ten million copies, and 11 less than five million.

Although regional sales volumes were comparatively balanced, the sales revenues varied greatly (see Table 2.11). The total sales revenue of central presses was more than RMB 11 billion, accounting for over 43% of the total sales revenue of China's presses. Shanghai and Jiangsu exceeded RMB 1 billion in sales revenue. Nine provinces (including the PLA) had RMB 0.5-1 billion, 18 RMB 100-500 million, and three less than RMB 100 million.

Regional rankings by average sales revenue of presses in 2004 (see Table 2.12) indicate that Gansu and Chongqing had average sales revenues of over RMB 100 million. Ten administrative districts had RMB 50-100 million and others RMB 10-50 million.

PROFIT

Regional rankings by pre-tax profit in 2004 (see Table 2.13) show that, besides central presses, seven administrative districts had a pre-tax profit of more than RMB 100 million. Fourteen had RMB 50-100 million and most others less than RMB 50 million. Qinghai and Tibet had less than RMB 1 million. This shows a gaping difference in the overall profitability between provinces, autonomous regions, and municipalities.

When it comes to rankings by average profit of presses, however, positions within the table shift dramatically with those in the lower ranks of pre-tax profit taking the top positions, such as Chongqing (see Table 2.14). This indicates a great difference in the average profitability among various provinces, autonomous regions, and municipalities. Six administrative districts had an average profit of more than RMB 10 million, 13 RMB 5-10 million, 12 RMB 1-5 million, and Qinghai and Tibet less than RMB 1 million.

In 2004, nine administrative districts had a per capita profit of more than RMB 100,000, 11 RMB 50,000-100,000, and 13 less than RMB 50,000. By comparing all provinces, autonomous regions, and municipalities, we can see that some of the more economically and culturally developed administrative districts (e.g. Guangdong and Beijing) were not in leading positions. Central presses ranked 17th and Gansu, Hunan, Jiangxi, Shanxi, and Guizhou (all characterized by developing economies and cultures) ranked among the top ten. This shows that per capita profit is not necessarily consistent with the level of local economic and cultural development. Primary and high school textbooks are an important factor contributing to this (see Table 2.15).

STOCK

Book stock has become a serious problem facing the whole publishing industry of China. Excessive stock hinders the development of presses. However, the situation varies in different administrative districts. This report includes three rankings based on different indices (see Tables 2.16, 2.17, and 2.18).

Comparing regional average sales revenue (see Table 2.12) with average stock value by list price (see Table 2.17), we can see that the top 20 regions in the two tables are slightly different. For instance, Hainan, Chongqing, and Central rank closely in both tables. Gansu, Ningxia, and Shandong are among the top ten in Table 2.12 but not in Table 2.17. Jilin, Sichuan, and Heilongjiang are not in Table 2.12 but appear in Table 2.17. This indicates a difference among various regions in sales ability and stock control.

In terms of stock turnover rate, Hebei, Zhejiang, and Qinghai exceed 40%. Heilongjiang, Ningxia, Central, Xinjiang, Sichuan, and Hunan are over 25%. Even the lowest reaches nearly 20%.

PRESSES OF VARIOUS TYPES

At present, Chinese presses can be divided into ten types according to the books they publish: social science, science and technology (S&T), literature and art, fine arts, education, children's, trade books, ancient Chinese texts, ethnic, and travel. In this section, presses will be analyzed in accordance with this classification.

NUMBER

There are 234 social science presses and 136 science and technology ones. The numbers of literature and art, fine arts, education, and children's presses are very similar, around 30 to 40 for each, all four types being represented in each province, autonomous region, or municipality. There are only five travel-related presses (Table 2.19 and Figure 2.10).

TOTAL ASSETS

From 2001 to 2004, social science presses topped all types of presses in terms of total assets and enjoyed rapid growth, followed by education and science and technology. Publishers of trade books, which had fewer total assets, also showed a good growth trend. The other six types of presses lagged behind in terms of total assets and growth rate (Table 2.20 and Figure 2.11).

The average assets of each type of press can also reflect its capital scale. Data shows that the average assets of education presses is more than RMB 300 million, much higher than the averages of other types of presses, indicating that educational publishing has a larger asset scale than other types of publishing. Next are publishers of trade books, with travel presses ranked last. Although this is different from rankings by total assets, all types of presses (except education) differ little in terms of average assets (Table 2.21). The average assets of four types of presses-trade books, children's, science and technology, and social science-range between RMB 70 million and RMB 90 million. The rest are between RMB 20 million and RMB 50 million.

PROFITABILITY

Average pre-tax profit rather than total profit can better demonstrate the comparative profitability of various types of presses. Data in Table 2.22 show that the average pretax profit of education presses was RMB 39.4680 million, much higher than other types, reflecting the effect of textbooks and teaching supplements on the profitability of presses. The education market is still an important profit source for China's book publishing industry. The average pre-tax profit of children's, science and technology, and social science presses stands between RMB 5 million and 10 million. Others are less than RMB 5 million, with travel below RMB 0.4 million.

STOCK

Stock is a good indicator of capital usage and operation. There are two indices to measure stock: one is absolute stock, especially average stock; the other is comparative stock or stock turnover rate. Data in Tables 2.23 and 2.24 show that social science presses have a high stock value by list price of nearly RMB 12 billion. With 234 presses in this category, its average stock value by list price ranks third. Education presses have a lower stock value by list price of only RMB 3 billion, but their average stock value by list price, being more than RMB 100 million, is the highest.

In terms of operation, the stock turnover rate can better reflect the operational level and capital productivity of a press. In Table 2.25, the stock turnover rate of ethnic, education, and children's presses are low; those of fine arts, travel, literature and art presses are 80% or more, and that of ancient Chinese texts presses approximates 120%. This situation has a lot to do with the nature of publications. The stock turnover rate of textbooks for primary and high schools is low, but that of market-oriented books is higher. As long sellers, ancient Chinese texts are less affected by sales seasons and presses must have a certain amount of stock, therefore, the ancient Chinese texts presses have the highest stock turnover rate.

BOOK PUBLICATION

According to the Chinese Library Classification (CLC), books are divided into 22 categories: (A) Marxism, Leninism, Maoism, and Deng Xiaoping Theory; (B) Philosophy and Religion; (C) Social Science; (D) Politics and Law; (E) Military Science; (F) Economics; (G) Culture, Science, and Education; (H) Linguistics; (I) Literature; (J) Art; (K) History and Geography; (N) Natural Science; (O) Mathematics, Physics, and Chemistry; (P) Astronomy and Geoscience; (Q) Bioscience; (R) Medicine and Hygiene; (S) Agricultural Science; (T) Industrial Technology; (U) Transportation; (V) aeronautics and astronautics (A&A); (X) Environmental Science; and (Z) Others. In this section, we will analyze book publishing in accordance with the CLC, using the allocated category letters where necessary.

NUMBER OF TITLES BY CATEGORY

In 2004, the various categories of published books showed significant differences. Six categories-Culture, Science, and Education, Industrial Technology, Economics, Literature, Linguistics, and Art-had more than 10,000 titles. Another six categories-Bioscience, Natural Science, Astronomy and Geoscience, Marxism, Leninism, Maoism and Deng Xiaoping Theory, Military Science, and A&A-had less than 1,000 titles each (Table 2.26).

IMPRESSIONS

In 2004, the number of impressions varied significantly according to category. Total impressions in the eight categories of G, K, J, T, H, I, F, and D were more than 100 million each. Impressions in the five categories of X, Q, E, P, and V were less than ten million (see Table 2.27).

REPRINTING

In 2004, the average reprint rate was 41.62%. Data show that the book categories of Culture, Science, and Education, Mathematics, Physics, and Chemistry, Transportation, Industrial Technology, and Linguistics each had a reprint rate of over 40%, with the Culture, Science, and Education category reaching 54.28%. The Military Science and A&A category had a rate below 20%. The lowest reprint rate was only 6.48% (see Table 2.28).

HUMAN RESOURCES

MANAGERIAL PERSONNEL

Managerial personnel in this report refers to the leadership in a publishing house, including president, vice-president, chief editor, deputy chief editor, and so on.

In 2004, the managerial personnel in China's presses totaled 2,388, 1,997 of which were men (83.63%), 391 women (16.37%). The average age was 48 with 104 part-time staff making up 4% of the total. Over 30% of these managerial staff had master's degrees or above (see Table 2.29). Such high academic credentials conform to the knowledge-intensive characteristic of the publishing industry.

Of the 2,388 managerial personnel, 1,970 or 83% have a senior professional title, 400 or 17% have an intermediate title, and 18 no senior or intermediate title. Moreover, 139 of them have acquired the Intermediate Publishing Vocational Qualification Certificate, one had an entry-level certificate, and 2,248 no certificate.

The GAPP organized professional training programs and 1,304 trainees received certificates, accounting for 54.6% of all managerial personnel in China's presses.

EMPLOYEES

In 2004, China's publishing industry employed 50,050 people with an average age of 40.6. Tables 2.30 and 2.31 show that besides central presses, Shanghai has the largest number of employees (over 3,000). Eight administrative districts employ 1,000-2,000 people, 15 districts 500-1,000 people, and eight less than 500 people.

The average age of employees in various regions ranged between 37 and 45 in 2004 (Table 2.32).

In 2004, 2,731 publishing staff held a senior professional title, accounting for 5.46% of all employees, 8,596 had an associate title (17.17%), 14,256 an intermediate title (28.48%), and 9,477 an entry-level title (18.94%) (see Table 2.33).

In 2004, 6,400 people working in publishing had master's degrees or above, accounting for 12.79% of all employees, 21,527 or 43.01% had bachelor degrees, 12,560 or 25.09% held diplomas, and 9,563 were high school graduates or below (19.11%). The ranking of regions by the proportion of holders of master's degrees or above shows two regions exceeding 20% and 11 regions going above 10%. Coastal areas in eastern China generally enjoyed a high proportion while the underdeveloped western regions witnessed a low proportion (see Table 2.34).

By the end of 2004, 5,405 or 10.8% of publishing personnel had received the Intermediate Publishing Vocational Qualification Certificate and 2,343 or 4.68% the entry-level certificate. However, 42,302 or 84.52% of all employees had yet to receive any certificate.