The pending WTO entry will definitely stimulate the development of China's national economy, but for some industries, there may be more advantages than disadvantages, and others, more disadvantages than advantages. China's audio and video industry that started to develop in late 1970s and early 1980s grew as a "sunrise industry" with the reform and opening-up. Due to investment shortage, lack of experience and poor management, economic results have once suffered a big decline due to piracy. Among current 3,000 audio and video publishing corporations, most are workshop manufacturers, which cannot compete with foreign multinationals. Hence, overseas audio and video industry will surely exert a great impact on the industry in China after the WTO entry. How to meet such severe challenge? Where is the way out? China's audio and video industry needs to adopt appropriate policies according to real situation, and to develop its own strength.

1. Reform Is Crucial, and Breaking the Iron Bowl Is Needed

For the present, most audio and video publishing companies still implement the administrative system based on the planned economy. In face of the WTO entry, the industry should promote a comprehensive reform, introduce both new system and concept, and break away from the planned economy. This is a top priority. As in my company, the Qi Lu Audio and Video Corp., it abandoned the old concept of lifelong tenure and adopted a hiring system in 1995, with social and scientific cadres competing for positions. This two-way selection system and fixed posts and personnel helped to break the Iron Bowl. In 1997, the company took another step to reform its income distribution system and ended the egalitarian practice of everyone taking food from the same big pot. The new system connects the labor with the loaves and fishes, and thus motivates the initiatives of workers who undertake great pressure and feel crisis. By doing so, the company has been increasing profit in recent years, while the whole audio and video market is experiencing continuous weakening. The practice proves that market economy brings profit and reform is crucial.

2. Making It Bigger and Stronger, and Expanding Its Scale

Though China's audio and video industry has developed for 20 years, many publishing companies are still at the initial stage with all employees engaged in a single operation. How can such companies survive their furious competition? Nowadays conglomerate corporations are emerging in all fields. Can publishing companies follow this trend and join hands with video, broadcasting and television industries? All in all, these companies should set up financing channel and improve their own strength. The technology of production used in audio and video, film and television industries has already been transformed from simulating to digital production. Under such circumstance, the publishing companies should increase the input, improve production and editing capability, and build up consumers' confidence with high quality products. Publishing is important while distribution is crucial. Current distribution channels of audio and video malls nationwide have mixed up good and bad ones that are hard to manage. Relevant authorities have thus ordered those audio and video malls to close one by one, thus leading to the development of distribution agencies among publishing companies and chain stores. With the arrival of the Internet era, online distribution may become a new trend. No matter by which means, the audio and video management department should put forward a managerial system of market adjustment.

3. Creating National Characteristics and Building up Brand Images

In recent years, the publishing industry has been in depression due to the pirating. In order to survive the industry, many publishing companies expanded their business scope, and find a way out for audio and video related industries, including TV programming, shooting and distributing films and TV series. This is supposed to be a wise move. I have visited several European countries, which do not have independent audio and video production companies. In those countries, film and TV audio and video industry, which is independent from the broadcasting and television industry, makes programs for the latter and publishes audio and video products. China has its own special situation. Now that publishing is the main business of a publishing company, it cannot be thrown away but be strengthened instead. Big companies should assume a leading role in the publishing industry, while those local publishing companies need to focus on national and local culture, forming their own characteristics. Some people are worried that western culture may replace the national culture after China's WTO entry. In my opinion, such kind of worry is unnecessary. Chinese culture is the product of Chinese national spirit depositing through thousands of years. It is impossible for one culture to replace another. The best illustration is that many overseas Chinese in the United States, Europe and South Asia still retain Chinese conventions. As the late chairman Mao once said, making the history serves the present and making foreign things serves China. National audio and video publishing companies should apply digital manufacturing technology in order to compete with foreign products made with advanced technology and make showpieces of national culture, demonstrating our own charm. This is our incumbent responsibility and the only way for local publishing houses to stand in an unbeatable position as well.

4. Going to Abroad, and Grasping Foreign Market 

Opening-up is a mutual thing. China opens its market to foreign countries, and in turn they open their market to China. In this process, to know exactly our strength and weakness as well as theirs is the most important. As for the audio and video publishing industry, though it has developed only for 20 years in China, the production has not been dropped behind owning to the country's rising economy and fast-spreading technology. As for the content of our cultural products, it has a long history and full of charm. Compared to radio and TV programs, audio and video products can be more easily to taken along and passed on, making them the most convenient information carrier which helps people know more about China. To this point, a good example is that Chinese Peking opera and folk music already have their debut on the western stage, overwhelming the western world. At the same time, foreigners also take delight in talking about Chinese history, places of interests, custom and slap-up food, which are all our advantages. We should grasp the opportunity and expand the communication with overseas cultures as they flow in. By borrowing a boat and sailing overseas, we can finally take market shares and set up our own international distribution network. Chinese Audio and Video Association should take the lead in this move and build up chain stores in key areas with cooperation among audio and video companies.

Last year, Chinese Audio and Video Association conducted a market survey in western countries and staged an exhibition in the United States, collecting experiences. The price of overseas audio and video products is much higher than that of our products. As in Western Europe and the United States, the price of videotape, CD and DVD is over RMB100 each, 10 times higher than that on our home market. If we dare to invest heavily on high quality products and export to foreign market, we can make a profit. Chinese audio and video industry ought to have the courage to take the move and make a contribution to promoting Chinese culture and bridging eastern and western cultures.