Sponsored by the Ministry of Culture of China, the convention was held earlier this month during the ongoing second Shanghai International Festival of Arts from November 1 to December 1. The festival has been the most successful state-sponsored cultural event.

"To be an international metropolis in the 21st century, Shanghai must develop to be not only the center of economy, finance and trade, but also the center of prosperous cultural production," said Bao Zonghao, a leading researcher on Chinese cultural development.

Shanghai witnessed rapid development in cultural production during the past five years. The output value of cultural products in the period totaled 3.4 billion yuan (US$410 million), and this number is predicted to double in the next five years to 6. 9 billion yuan (US$831 million), to lead all cities in the country.

Cultural activities used to be nonprofit operations in past decades in China, hampering the forming of a sound and benign circle between cultural development and the market.

Since the opening up and reform launched in the late 1970s, and later especially driven by the policy set 1992 to establish the socialist market economy in China, the development of cultural activities through the means of commercialization has been widely called for.

For the first time, the document issued by the Fifth Plenary Session of the 15th CPC Central Committee, voiced support for the full development of the commercialization of cultural production.

The full title for the document is the Proposal of the Central Committee of the Chinese Communist Party for Formulating the 10th Five-Year Plan (2001-2005) for National Economic and Social Development, made public on October 18.Shanghai has long been at the frontier of the opening and reform. The city took the lead to reform its operational system for cultural activities in early 1980s, and made significant breakthroughs in middle 1990s.Shanghai founded its first cultural share-holding company as early as 1988, also the first of its kind in the country. The company, named Oriental Pearl Co. Ltd, boasted an annual revenue of over 100 million yuan (US$12 million). The company invested 900 million yuan (US$108 million) to complete the Oriental Pearl TV Tower, which has become an architectural symbol in the city.

The old system featuring egalitarianism became no longer tolerable in cultural production in Shanghai. The city readjusted the number and scale of show troupes, reducing the number of staff members from 4500 to just over 2000 and increasing efficiency via the establishment of new systems, such as, a new contracting system, competing for positions, objective management, and the artistic majordomo-in-charge system.

Shanghai also succeeded in establishing professional enterprises to handle recreational and artistic shows and performances. It relaxed the restrictions and gave permission for social capital to be used to run troupes. Through these measures, the production, rehearsal, marketing and staging of cultural performances have been put onto the market, promoting the commercialization of cultural activities.

Shanghai pioneered the collection of the city's financial resources to afford key cultural construction and service. For example, radio and TV stations in Shanghai, like Shanghai TV and Shanghai Oriental TV, had to hand over 50 percent of their annual income to the Shanghai Radio and TV Administration, which in turn invest the money in public cultural services.

Governmental financial aid for cultural development has discontinued in Shanghai. In the early 1980s, 80 percent of cultural investment was furnished by such funds.

At present, however, only 9 percent of funds are provided by the government. Shanghai's cultural services will realize financial self-sufficiency through various channels of funding, with total cultural investment to increase by a large margin.

The marketing system was applied to the first two Shanghai International Festival of Arts. Both festivals were successful in making ends meet without costing a penny of government funds.

Cultural agencies have played an increasingly important role in cultural commercialization. The two arts festivals imported respected overseas plays and performances through reciprocal business negotiations between the competent agencies and local theaters.

Aida, the world famous opera honored as the opening show of the second arts festival, was brought to Shanghai by Shanghai Oriental TV at a cost of 10 million yuan (US$1.2 million) for each show.

"Thanks to fully commercialized operation through the market, it was no problem to reimburse the investment by selling tickets, stage properties and costumes," Chen Shenglai, general manager of the festival's show center, said.

(Xinhua 11/27/2000)