8 Copyright Trade after China Joined the Berne Convention

A. Overview

B. Analysis of Book Rights Acquisition

C. Chinese Rights Licensed Overseas

A. Overview

China promulgated its current copyright law in 1990 which became effective on June 1, 1991. The first amendment to the copyright law was made in 2002.

China joined the Berne Convention for the Protection of Literacy and Artistic Works on October 15, 1992, and the Universal Copyright Convention 15 days later. In November 2001, it became a member of the World Trade Organization (WTO).

There are no copyright trade statistics available before 1990. In 1995, China began an official survey of its book copyright trade. (The author of this book is an advocate and designer of the initial copyright survey). In February 1996, the National Copyright Administration of China published the first statistics of the book copyright trade for the 1995 fiscal year, marking the beginning of annual data-collecting of copyright trade with other countries. The systematic survey laid the groundwork for an overview of the country’s book copyright trade. In addition, the Chinese mainland conducted four surveys of the book copyright trade in different categories from 1990 to 2000.

According to incomplete statistics, 51,500 book copyright deals were made with overseas publishers from 1990 to 2002. Of these, 44,300 were deals that licensed works from overseas publishers, and 7,200 were deals that licensed works to overseas publishers. The deals include those with Taiwan and Hong Kong.

The inbound rights licenses far exceeded the outbound rights licenses over the past 13 years. The ratio of inbound to outbound rights licenses is about 7 to 1. Since 1995, rights acquisitions have increased by a large margin, and the ratio of inbound to outbound rights licenses was about 10 to 1.

Most foreign rights deals were negotiated through Chinese or foreign copyright agencies. Some big Chinese publishers obtained rights directly from overseas publishers. There are now about 30 copyright agencies, located in Beijing, Shanghai, Guangxi, Shaanxi, Guangdong, Anhui, and Shenzhen. The Copyright Agency of China (CAC) was the first rights agency established and other rights agents in the Chinese mainland are the Shanghai Copyright Agency, the Guangxi Wanda Copyright Agency, and the Beijing Copyright Co., Ltd. These state-owned rights agencies mostly handle book rights and a few of them also engage in TV programs and the audio-visual rights business.

In addition, rights agents in Taiwan and Hong Kong also do licensing rights deals with or on behalf of Chinese mainland firms. The most active agents are the Big Apple Tuttle-Mori Agency, Inc., Bardon-Chinese Media Agency, and Arts & Licensing International, Inc—all major players. These agents have also set up offices in the Chinese mainland. (See Appendix 4 on Copyright Agencies in China.)

There are three major international book fairs in China: the Beijing International Book Fair (BIBF), the Hong Kong Book Fair, and the Taipei International Book Exhibition; all of which have international participants. To Chinese mainland publishers, the BIBF is the most important event in the book rights business. (See Chapter 5-B-3 on BIBF.) In addition to the BIBF, there are also a number of regional book rights fairs. The Shanghai Copyrights Rights Salon is the second most important book fair after the BIBF.

In addition to book fairs in China, Chinese mainland publishers have also actively taken part in various international book fairs. Each year, a large number of publishing professionals are sent to the Frankfurt Book Fair, the Bologna Children’s Book Fair, and to BookExpo America. In the past few years, it has sent some 500 to 600 publishing professionals to the annual Frankfurt Book Fair. In addition, Chinese publishers have also attended the London Book Fair, Salon du Livre Paris, São Paulo Internatinal Book Fair, Buenos Aires International Book Fair, Montréal Salon du Livre, Warsaw International Book Fair, Moscow International Book Fair, Budapest International Book Festival, International Book Fair – Barcelona, the New Delhi World Book Fair, Cairo International Book Fair, Tokyo International Book Fair, Seoul International Book Fair, Australian Book Fair, Asia International Book Fair (Singapore), Kuala Lumpur International Book Fair, and Philippine Book Fair.

The State Department has set up a National Copyright Administration and all provincial and local governments also have copyright bureaus at their respective levels. In addition to fighting piracy and advising on copyright issues, the government copyright bureaus mainly facilitate international copyright negotiations, conduct copyright trade statistics surveys, exchange copyright trade experiences, and award establishments that have done a fantastic job in trading copyrights. In addition, the local copyright bureaus are also responsible for registering rights contracts to safeguard the legal rights of Chinese and foreign authors and the copyrights holders.

B. Analysis of Book Rights Acquisition

In the 10 years since China joined the Berne Convention, it has acquired 40,000 foreign rights licenses. The rights acquisitions have the following key features:

1. Rapid Increase of Rights Acquisition

A few years before China became a member of the Berne Convention, the number of rights acquired increased by an average annual rate of 29%, which is considered moderate growth. Since 1995, the growth rate has accelerated. In 1995, the Chinese mainland acquired 1,664 titles from overseas. In contrast, 6,459 titles were acquired in 1999. By 2002, the number of foreign titles acquired increased to 10,235 titles. The annual growth rate of rights acquisition averaged 57%. (See Figure 8.1.) That is to say one out of every ten new books published each year is foreign, not taking into account the foreign books already in the public domain. The facts indicate that Chinese publishers got over the initial pain after China joined the two international copyright conventions and quickly adapted to the rules of the international copyright trade.

It also indicates that many Chinese publishers are well capable of engaging in active rights trading.

2. Major Copyright Trade Partners

China has translation rights trade with 40 countries. The most active trading partners are the U.S., U.K., Japan, Germany, France, Russia, South Korea, Canada, and a number of other European countries. These countries have become the main rights sources for the Chinese mainland. Taking 1998 and 2002 for example, the top eight licensors in 1998 were the U.S., U.K., Japan, Russia, Germany, France, South Korea, and Australia. The

number of titles acquired from these eight countries was 4,220, accounting for 77% of that year’s total acquisitions. The top six in 2002 were the U.S., U.K., Japan, Germany, South Korea, and France. The Chinese mainland acquired a total of 8,146 titles from those six countries, representing 80% of that year’s total acquired foreign titles. (See Figure 8.2.)

In the past 10 years, the U.S., U.K., and Japan have been the top three rights sources and the U.S., U.K., Japan, Germany, France, South Korea, and Russia have become the seven most important rights licensors.

3. Variety of Acquired Books

In the first few years after China joined the Berne Convention, rights acquisitions concentrated heavily on foreign language, literature, and children’s books. The selection was quite narrow. This situation began to change in the mid-1990s when Chinese publishers began to expand their acquisitions into many fields

and acquired a wider variety of books. Books on electronics, business, science and technology, academic works, self-help, and inspirational books began to take important positions in the rights trade. Computer and business book fever, and self-help and inspirational book fads all drove the rights trade growth.

According to the statistics provided by the Beijing Copyright Bureau, science and technology books account for 40% of all foreign books acquired over the past five years. Computer books, economics and management books, language books, and children’s books were the four pillars of rights acquisitions from overseas. The number of titles acquired in these four categories continues to grow. By acquiring a large number of business, law, science, technology, electronics and academic works, the book copyright trade has played an increasingly important role in the Chinese mainland’s movement toward “building the country through science and technology,” and in the country’s legal reforms.

To take the acquisition of foreign law books as an example, the Encyclopedia of China Publishing House (ECPH), China’s authority in encyclopedia publishing, published the Foreign Legal Library, the most comprehensive legal book series available in translation. Since its launch in 1991, ECPH has acquired several dozen world-famous legal works and now has published 30 titles. Its acquisitions range from Law, Legislation and Liberty by British author F. A. Hayek, Einfubrung in Die Rechtswissenschaft by German author Gustav Radbruch, and Law’s Empire by American author Ronald Dworkin to Criminology by Italian author Baron Raffaele Garofalo, General Theory of Law and State by Austrian author Hans Kelsen, and Civil Code of the Russian Federation (which went into effect in 1995). The Law Library editorial board was led by Chinese legal expert Jiang Ping. Invited to sit on the consultant board of The Law Library were Xavier Blanc-Jouvan, Professor of Law Emeritus in the Law Faculty of the Université Paris I Panthéon-Sorbonne and President of the Société de Législation Comparée; Paul-André Crépeau, Emeritus Law Professor of McGill University (Canada); and President of the International Academy of Comparative Law; Whitmore Gray, a Professor Emeritus of Law at The University of Michigan Law School; and Hein Kotz, a Law Professor of University Hamburg and former Director of Max Planck Institute for Foreign and International Private Law, in Hamburg, Germany. The Law Library provides an invaluable reference in the construction of China’s legal system and has become essential reading for Chinese legal experts, law professors, and attorneys.

More and more Chinese are now functional in a foreign language. The language ability of college students has increased to a higher level as the government encourages study. As a result, the number of people reading foreign original works and using foreign textbooks has grown very rapidly. Chinese publishers began to acquire more and more reprint rights of foreign textbooks and other related books and have published more and more books in foreign languages. Chinese publishers who have acquired a large number of original works in foreign languages include the Foreign Language Teaching and Research Press, Tsinghua University Press, Dongbei University of Finance and Economics Press, and the Higher Education Press.

4. Prominence of Acquired Children’s and Cartoon Books

As most children’s and comic books contain pictures with simple and direct stories and as all children share common characteristics, the market demand for children’s books is strong. They have become a major category for rights acquisition by Chinese publishers. For some children’s book publishers, the acquired titles of foreign origin represent more than one-third of their annual title output and have generated nearly half of their annual sales.

Tomorrow Publishing House of Jinan in Shandong Province aggressively acquired foreign titles over the past few years, which have helped double its sales and profits. Through a large volume of acquisitions, Tomorrow translated and published children’s encyclopedias for different age groups, causing quite a stir in the market. It has won the title of the King of Children’s Encyclopedias in the book trade. One of its editors specializing in foreign rights acquired 93 titles in one year, generating sales of RMB23 million (US$3 million) with profits of RMB5 million (US$606,000).

Another publisher, Hope Publishing House of Xi’an in Shaanxi Province, spent RMB4 million (US$481,928) in 2002 to acquire foreign titles, including The Complete Collection of Snoopy in 20 volumes which in turn generated sales of RMB25 million (US$3 million) and RMB2 million (US$240,964) in profits for the publisher.

Some children’s book publishers launched many foreign children’s titles that have become bestsellers thanks to extensive marketing efforts. Recently, foreign titles outnumbered local titles on the Chinese mainland’s bestseller lists for children’s books. The top bestsellers are Wally’s World published by Shanghai Pictorials, Harry Potter by People’s Literature Publishing House, The Goosebumps Series by Jieli Publishing House, Tiger Team by Zhejiang Juvenile and Children’s Publishing House, The Complete Collection of Snoopy by Hope Publishing House, and Mickey Mouse by Children’s Fun Publishing Co., Ltd.

Chinese publishers that have done a remarkable job in acquiring rights of foreign titles are Jieli Publishing House, Tomorrow Publishing House, Hope Publishing House, Children’s Fun Publishing Co., Ltd., and Jilin Fine Arts Publishing House.

The strong sales of foreign children’s titles have helped boost the market share of children’s and young adult books. According to research conducted by the Beijing OpenBook Market Consulting Center, the retail market share of children’s books increased by 6.7% in 2002. Foreign children’s books contributed 81.8% to this growth, while books by local authors contributed only 1.6% to this increase.

5. Emerging Bestsellers with Higher Prices

The prices of licensed foreign books are generally a bit higher than that of local books. The average sales prices for various licensed foreign books are as follows:

• RMB20 (about US$2.41) for literature books;
• RMB13 (about US$1.57) for children’s books;
• RMB30 (about US$3.61) for business books;
• RMB45 (about US$5.42) for computer books; and
• RMB40–100 (about US$4.82–12.05) for architectural and medical books.

In the retail market, translated foreign books in the areas of language learning, business, children’s, fiction, electronics, and self-help, all sell well and have relatively large market shares. In the past two years, foreign self-help and inspirational books have had impressive sales and have become the new favorites according to many bestsellers lists. CITIC Publishing House, Jieli Publishing House, Tomorrow Publishing House, and Yilin Press have become strong performers specializing in foreign licensed books with CITIC Publishing House the strongest at present. Among CITIC’s Top 10 bestsellers with sales totaling over 100,000 copies, there is only one title written by a Chinese author while the rest of the nine titles all are foreign. The number one bestseller published by CITIC Who Moved My Cheese?, licensed from the U.S., sold 2 million copies and has also set the new sales record surpassing all other bestsellers published in recent years.

6. Prominent Publishers in the International Copyright Trade

The substantial acquisition of foreign rights intensified competition in the book market and also stimulated market development. The bestseller statistics of the retail market indicated that in recent years foreign books dominated bestseller lists in the categories of English, children’s, computers, business, and inspirational books. By comparison, local-themed books

have had mediocre performances. Foreign books have propelled the growth of these book categories in the retail market.

In the last 10 years, many publishers capable of international copyright trade emerged from many different sectors and they have done a remarkable job in acquiring and publishing foreign works.

The star performers in acquiring foreign rights of non-fiction trade titles are SDX Joint Publishing Co., Ltd. Peking University Press, Xinhua Publishing House, World Affairs Press, Hainan Publishing House, Liaoning Educational Publishing House, Encyclopedia of China Publishing House, and the Beijing Publishing House. SDX Joint Publishing Co., Ltd. earned a great reputation among Chinese intellectuals for its quality translations and publications of foreign social sciences works. Xinhua Publishing House, affiliated with Xinhua News Agency, China’s largest news company, and World Affairs Press, affiliated with the Ministry of Foreign Affairs, both have multiple channels of information sources and excellent books.

Publishers specializing in foreign literature and fiction are Yilin Press, Shanghai Translation Publishing House, Writers’ Publishing House, Lijiang Publishing House, Hebei Education Press, People’s Literature Publishing House, and the Yunnan People’s Publishing House. Of these, the first four are regarded as the “four powerhouses” of foreign literature. Yilin and Shanghai Translation acquire a large number of foreign fiction titles each year. They are the most important publishers of contemporary foreign literature. The Hebei Education Press is known for publishing the largest number of selected works as well as the complete works of foreign literary masters. For example, Hebei Education Press licensed The Complete Works of Albert Camus in four volumes from Gallima. The Chinese edition has been praised by Gallima as the most beautifully designed and bound edition among all the different language editions around the world. It also won the National Book Award, the highest book award in China.

Publishers that have done an outstanding job with foreign books on electronics, science, and technology are the Publishing House of the Electronics Industry, China Machine Press, Tsinghua University Press, People’s Posts and Telecommunications Publishing House, Hope Electronics Press, China Youth Press, Science Press, China Railroad Publishing House, and Beijing Aviation and Aerospace University Press. Of these, the first four are regarded as the “four powerhouses” of computer books. Each of the four powerhouses has acquired hundreds of titles annually. To take the Publishing House of Electronics Industry and China Machine Press as examples, they obtained licenses for 400 foreign computer books in 2002 alone. The licensed editions of the four power houses represented an impressive market share of 70% in this category.

The top performers in publishing foreign language books are the Foreign Language Teaching and Research Press, Shanghai Foreign Language Educational Press, The Commercial Press, Foreign Language Press, World Publishing Corporation, Anhui Science and Technology Press, and Higher Education Press. Publishers specializing in foreign inspirational books are CITIC Publishing House, World Publishing Corporation, Enterprise Management Press, Hainan Publishing House, China Youth Press, and the China Machine Press.

More and more foreign business books have entered the market, exerting an increasing influence every year. Publishers with excellent records with foreign business books are the China Renmin University Press, China Machine Press, Huaxia Publishing House, Hainan Publishing House, CITIC Publishing House, Economic Science Press, Peking University Press, China Financial & Economic Publishing House, Enterprise Management Press, Shanghai Financial & Economic University Press, World Publishing Corporation, Dongbei University of Finance and Economics Press, and the China Commerce Press.

Nonetheless, publishers big enough to acquire foreign rights are a small minority. In Beijing for example, 126 publishers acquired foreign rights in 2002, representing 56% of the total number of Beijing publishers. But the foreign titles acquired by the top 10 publishers accounted for 51% of the total foreign rights licenses.

Of the 30 provinces and regions in the Chinese mainland, book companies strong in foreign books were mainly concentrated in seven areas. Beijing is the most concentrated, accounting for 60% of the Chinese mainland’s total rights publishers. In addition to Beijing, Jiangsu, Shanghai, Guangxi, Liaoning, Guangdong, Zhejiang, Shandong, and Hunan also have had decent numbers of foreign rights publishers. The foreign rights volume of these regions represents an overwhelming majority of the entire country’s output. There are another 10 provinces and regions which have never, or rarely, engaged in foreign rights licensing.

C. Chinese Rights Licensed Overseas

The Chinese mainland has not had much success in licensing Chinese rights overseas. In the past ten years, there were only 1,300 Chinese books that were licensed overseas, representing a mere 4% of the foreign titles acquired by the Chinese mainland. (See Figure 8.5.)

There are about 30 countries that have acquired book rights from the Chinese mainland. Those countries are primarily concentrated in Asia with some in Europe and North America.

In Asia, Singapore, Malaysia (often for reprint rights), Japan, and South Korea were the major acquirers of Chinese book rights. In the West, Germany, the U.S., and U.K. were the primary acquirers of book rights. Italy, France, Spain, Holland, Russia, Finland, Poland, Sweden and Denmark also acquired Chinese rights in small quantities. Europe as a whole acquired more Chinese rights than the U.S.

In terms of content, Chinese books licensed overseas are generally related to traditional Chinese culture, arts, and language. Many books acquired by Japanese and Korean publishers fall under these categories. Some examples are An Outline History of Chinese Philosophy, The History of Chinese Martial Arts, Life of Chinese Hermits, Fables about Twelve Animal Signs of the Chinese Zodiac, Secret Sects of China, The History of Chinese Buddhism, The Dictionary of Chinese Herbal Food Remedies, Traditional Chinese Medicine Prescriptions in Ten Major Categories, Dialectics of Traditional Chinese Medicine, and Chinese Folk Remedies and Therapies.

The same is true with Chinese rights licensing in the U.S. and European countries. Books include Life and Landscape of Tibet, Traditional Chinese Internal Medicine, Chinese Herbal Medicine and The Illustrated Chinese Health Massages to Germany; The Art of Chinese Pottery Illustrations and The Myth of Longevity to Italy; Circular Qigong, and Chinese Tea to Spain; Chinese Healing Medicine to Sweden; The Collection of Documents on DungHuang Grottoes and Turpan to France; Chinese Natural Full Vitality Qigong, Essence of Qigong, and San Song Tang to the U.S.; and The Fundamental Theories of Traditional Chinese Medicine, 500 Cases of Treating Febrile Diseases, and Chinese Food Remedies to Brazil.

A small number of countries are quite interested in the annual statistical studies of certain Chinese industries in addition to books on trends and development in China. Both Japan and the U.K. acquired the White Paper on Chinese Economy: Trend and Outlook, Reports on China’s National Strength, Reports on China’s Agricultural Development and Reports on China’s National Economy and Social Development.

Singapore and Malaysia are primarily interested in Chinese language and children’s books and their rights acquisitions focus on these categories. They have acquired The Series of Chinese Children’s Stories, The Illustrated Chinese Folk Tales in large format, The Illustrated Edition of Chinese Classical Literature, The Color Illustrated Tales of Gods and Ghosts, The Series of The Magic Gourd, Banana Grandma, Color Illustrated Children’s Treasure in Chinese Phonetic Spelling, The Full Color Dictionary of Proverbs for Elementary School Students, and The High-School English and Chinese Dictionary. Unlike other countries which acquire translation rights, Singapore and Malaysia mainly acquire the Chinese reprint rights because there are many Chinese speakers in these countries.

China is still a developing country and its global influence is still limited. Therefore, foreign publishers have only limited interest in acquiring Chinese books. This explains why there is such a big deficit in China’s book copyright trade.