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Guidelines for facilitating the innovation and development of the cultural and creative industry in Shanghai

Jan 2, 2018

The Shanghai Municipal Government’s Information Office held a press conference on December 15 on guidelines for facilitating the innovation and development of the cultural and creative industry in Shanghai. Following are the highlights:


Weng Tiehui, vice mayor, Shanghai Municipal Government

Zhu Yonglei, deputy secretary-general, CPC Shanghai Committee and deputy minister, Publicity Department of the CPC Shanghai Committee

Yu Xiufen, director, Shanghai Culture, Radio Broadcasting, Film and Television Administration

Xu Jiong, director, Shanghai Press and Publication Bureau

Hu Lanfang, inspector, Shanghai Taxation Bureau

Chen Yuehua, inspector, Shanghai Commission of Economy and Information Technology and deputy director, Shanghai Cultural Innovation Office

Cen Fukang, deputy director, Shanghai Planning, Land and Resources Administration

Yu Chengbin, deputy director, Shanghai Human Resources and Social Security Bureau

Jin Weimin, deputy director, Shanghai Finance Bureau

China National Radio: I have a question for director Zhu. What are the major points of the 50 measures to accelerate the construction of the modern cultural industry market? And how will you make Shanghai’s cultural industry stand out in the competition with other foreign cities?

Zhu Yonglei: It’s a big question. The 50 measures have four parts, the third part is about building a modern cultural industry market. Vice mayor Weng has already mentioned this in her speech, I would like to add something. The guidelines talk about perfecting the building of cultural products and a key cultural industry market, strengthening the product circulation system, consolidating the market supervision system, accelerating and unifying the open, orderly competitive, law-abiding cultural industry market environment with strong supervision.

There are seven tasks in building a modern cultural industry market system:

First, to make the market more vital, and strengthen market bodies and their cultivation in each cultural industry market, that is to say, every qualified market body is welcome to Shanghai’s cultural industry, no matter whether you are from Shanghai or other provinces, local or foreign, private or state-owned, but you should be law-abiding.

Second, strengthen the promotion of key cultural industry projects, unleash their industrial driving force, upgrade the energy level of cultural innovation parks, and speed up the construction of public service platforms. A while ago Shanghai released some key cultural projects such as the east hall of the Shanghai Library and the east hall of the Shanghai Museum. These two are not industrial facilities, but it’s necessary for Shanghai to have large museums, libraries, and art galleries, for they can serve as inspiration for the development of the cultural industry. As for large theaters, exhibition halls, Hi-tech film and television bases, and national-level culture and innovation parks we just mentioned, are all indispensible parts of the development of the cultural industry.

Third, we need to accelerate the innovation of financial services, maximize the performance of sector funds, establish a cultural industry financing system, and fully use the multi-layered capital market. It’s a key step in pushing forward the construction of the market system. Shanghai is advancing two major government-led funds, one is the Fund of Funds for Shanghai’s Innovative and Entrepreneurial Talents, the other is the fund of funds of United Media. The first round financing of SIET’s 2 billion yuan (US$ 303 million), and United Media’s 3 billion yuan have been initiated. The two FOFs have been entrusted to experienced marketized fund management companies by the government and we welcome qualified market bodies of all sorts to use the fund.

Fourth, to increase the influence of cultural innovation festivals, and secure Shanghai’s global leading position at cultural festivals. Shanghai has globally renowned cultural festivals, such as the Shanghai International Film Festival, and it is a driving force in the film and television industry. The festival probably ranks third or maybe fourth among all international festivals. Every year it attracts participants from about 100 countries with 250 movie entries. At this year’s festival, there were about 5,000 participants from 55 countries. The driving force of resources that the film festival has accumulated in Shanghai and its influence on China’s cultural industries are immeasurable.

Fifth, we need to expand cultural exports, put out more reward for cultural output, and upgrade the energy level of the cultural trade service.

Sixth, we need to stimulate the public’s consumption of cultural products, and create the right environment for cultural product consumption.

Seventh, we need to promote the reforms to delegate power, streamline administration and optimize government services, and to improve government’s service for cultural industry firms.

As for the second question, vice mayor Weng has already talked about it. The implementation of the 50 measures will manifest the service level of each governmental unit.

About the second question, how Shanghai can maximize its advantages in the cultural industry, from the 50 measures we can see that Shanghai can achieve this goal from three aspects.

Firstly, the quality of the cultural products needs to improve. The volume of Shanghai’s cultural industry takes up a relatively large part in China. In 2016, the industrial added value reached 330 billion yuan, accounting for 12.1 percent of GDP, in five years, it will reach 15 percent. Other than what vice mayor Weng mentioned, I would like to add two points. The first is that we have the advantage in the film industry, but we also need to improve digital post-production as well as the film industry’s venture capital investment and financing, which is also Shanghai’s strong point. The second is publication; Shanghai’s digital publications have certain advantages, but they also need to further improve. In the performing arts industry, not only do we need to expand the market, but we also need to draw more performance groups, agencies from other countries, and to use our location advantage to attract more performance fairs to Shanghai, whether it’s domestic or foreign. A performance fair has been held at the Shanghai International Arts Festival in recent years, during which not only domestic performance deals between Shanghai and its twin cities and provinces, but also with foreign countries were sealed; there were also deals signed between two foreign countries.

Also, with the booming of the Internet, online literature, original web series, movies, and online games, they all need to be encouraged and supported.

Secondly, the cultural product market needs to be invigorated. We think Shanghai’s market has great potential. There were 16,000 commercial performances last year with 10 million audience members. The number may seem large, and it also may rank at the top in the whole country. But when put it into perspective, it’s actually not large for the 24-million permanent residents and the 6-million floating population.

How can we tap into that potential? By supply-side structural reforms that bring the consumers cultural products. We saw that some performances were full houses, but the rest of the performances were not. So we need to put on more performances to tap into that potential.

Plus, some famous festivals also made it possible to expand the market. Some 400,000 movie-goers attended the Shanghai International Film Festival and generated 25 million yuan in box-office receipts, many film tickets at the festival were sold out. As for animation and games, every August Shanghai hosts the China Digital Entertainment Expo & Conference. The exhibition area and the number of participants already rank No. 1 globally, and No. 2 in audience numbers, after Gamescom in Cologne, Germany. The Expo attracted 300,000 people just in a few days, and the tickets have been sold out every year. So we can say that these festivals play a very important role in stimulating cultural product consumption.

Thirdly, we need to encourage cross-industry integration. This is also Shanghai’s advantage, for Shanghai already has advantages in technology, finance, trade, and advanced manufacturing. If they can be combined with the cultural industry, the potential market will be almost infinite.

These three aspects are the advantages of Shanghai’s cultural industry, and what needs to be strengthened next.

CCTV: I have a question for the planning and land resources bureau, many cultural and innovative enterprises make use of existing houses, including historical buildings.  What concrete support and preferential policies do you have on the land-use side?

Cen Fukang: Thank you for your question. As we all know Shanghai is very short of land resources, and making use of stock land resources is a basic strategy. Cultural and innovative enterprises pay attention to the history of buildings and the style of the city when making use of such structures, which is very helpful for Shanghai to inherit its history and culture and to promote the organic renewal of the city. We think we should actively support this point. On the one hand we are carrying out supportive policies of the national government, and on the other we have drafted some detailed supportive policies by combining the actual situation in Shanghai. I think the newly announced 50 measures on the cultural and creative industry are special in three main aspects:

First, we have made expansions on the main body and type of land use. On the one hand we support the original rights holder to make use of existing houses and land in the cultural and creative industry. On the other, we support all kinds of main market players to cooperate with the original rights holder in the industry. Meanwhile we have made it clear that existing houses, including industrial buildings, warehouses and traditional commercial streets, can be used for cultural, innovative and design service on condition that they are in accordance with urban and rural planning and do not change the land use and holder of the land rights.

Second, we have provided great support on the way of supplying land. For existing houses or land obtained by transfer and used for the cultural and creative industry and operating for more than one year, we can continue to proceed with land use by transfer if the projects are for charity, and for cultural projects aimed at profit, we can proceed with land use by transfer of agreement.

Third, we also have full consideration on the cost of using land. On the one hand we support the cultural and creative enterprises to ease their financial burden; on the other we support scaled enterprises to use more money in developing their main industries. So we especially made it clear that the land cost can be submitted by installment payment and the period can be extended to two years for cultural and innovative projects when using existing land so as to ease their financial burden.

We hope to use these policies to release the potential of existing land resources and support the development of the cultural and creative industry. Thank you!

Shanghai Radio: I have a question for inspector Hu of the Taxation Bureau. Weighted deduction of R&D fees is a concern for enterprises. Is the new regulation of the Taxation General Bureau of the State Council related to cultural and innovative enterprises? What preferential treatment on taxation can cultural and innovative enterprises enjoy for exports? Thank you.

Hu Lanfang: Talking about the weighted deduction of R&D fees, first of all, cultural and innovative enterprises can enjoy it as per the conditions. In recent years, national government departments, including the Ministry of Finance, the National Taxation General Bureau and the Ministry of Science and Technology, have handed down several documents on the issue. In May, the Ministry of Finance, the National Taxation General Bureau and the Ministry of Science and Technology raised the ratio of weighted deduction of R&D fees on SMEs from 50 percent to 75 percent, which is an incentive for enterprises in the R&D field. On November 13, the National Taxation General Bureau issued an announcement on the issue, which also aimed to embark on the preferential policy to support the scientific innovation of enterprises and accelerate innovation-driven development.

In addition, the announcement has clarified other issues. In general, it further improved enterprises’ capability for independent innovation.

In addition, the city government has introduced a series of preferential policies on taxation to support the export of cultural and innovative enterprises after the test of change from business tax to value added tax. For example, just now mayor Weng mentioned that cultural equipment enterprises can enjoy tax-free status or tax rebate on exports. And the cross-border service for cultural, innovative, design, radio or audio production and distribution enterprises can enjoy tax rebate or can be tax free as zero tax rate is applicable there. Plus, enterprises providing radio and audio broadcasting, cross-border cultural service or exhibition service overseas can also enjoy preferential tax rates.

As the taxation department, we have especially compiled a policy leaflet for cultural and creative enterprises to make full and good use of the tax policy. The leaflet also has an online version on our official website. It is divided into three parts with more than 40 preferential policies: the first part is for all, the second part is divided by industries, and the third part is the criteria for high and new technology enterprises, technically advanced enterprises and the explanation on weighted deduction of R&D fees. With the leaflet we have enhanced the publicity of the policy and the implementation of the preferential taxation policy.

Wenhui Daily: My question is for the Administration of Culture, Radio, Film and TV. There are many film shooting bases in developed countries like the United States, New Zealand and Canada so that they can attract actors from around the world. It is said that Qingdao has put the Oriental Movie Metropolis at the top of its agenda. What’s Songjiang’s positioning in comparison? Are there any new measures on the industrial base and favorable policies?

Yu Xiufen: Thank you for your concerns over the film industry. Shanghai has been paying attention to the film industry and released relevant promotion policies in 2011 and 2014. They have laid the foundation for Shanghai’s exploration of establishing a modern film industry system. We conducted surveys on foreign and domestic film bases when we designed the 50 measures for the culture and creative industry. And we found that cities with a prosperous film industry usually have large film bases. Meanwhile, they share several features. First, they have a large scale. The bases have many professional studios and high-tech special effects. Second, they have the strength in technology. Professional teams have a whole procedure for such service. Third, the service is good. Such bases usually have professional managing teams and they have the resources and ability to attract filmmakers and professional service providers. Fourth, the infrastructure is complete. Normally the bases gather companies for film making, film release, relevant investment and others. There are also other service providers for accommodation, entertainment, fitness etc. There are plenty of things for Shanghai to learn from.

Shanghai’s movie resources are everywhere in the districts, including Jing’an, Xuhui, Minhang, Songjiang, and Putuo. They all have some industrial resources. But our infrastructure is falling behind compared with the leading film bases. The resources are scattered and they don’t interact enough; and there is not yet a large-scale high-tech film shooting base. To make up for the shortage, we have come up with a film industry “1+3+X” layout.

There will be one large high-tech film base in Songjiang, as the suburban district already boasts certain basis for film culture and has some relevant companies. It has the conditions to further develop the large base. Next we will push forward the construction for the base in Songjiang, according to the 50 measures.

It will gather filmmaking services in three perspectives. First, the area with film talent cultivation and incubation, for example, Alibaba Film School at the Shanghai Theatre Academy, the Shanghai Vancouver Film School and the Shanghai Film Art Academy and other colleges with film-related majors like Donghua University, Shanghai Institute of Visual Arts and Shanghai University of Engineering Science. We will introduce world-leading film teaching resources and innovate on the talent raising mode to promote the integration of the industry, academy and research. The second area would be the gathering of film development and investment, including the film industrial park around Shanghai University, Jinshajiang Road, Caoxi Road N. and others. They should focus on the production, publicity, release, financing and film development for diverse industrial gathering as well as the industry chain. The third would be the shooting sceneries, including Chedun, Shengqiang and Yancang. These places will combine with tourism as themed routes to upgrade tourism development.

The X would refer to integrating the shooting and producing resources in Xuhui, Minhang, Putuo, Baoshan, Jiading and Chongming to make their resources complement each other.

This is the layout for the Shanghai film industry in the 50 measures. The measures are meant to make up for the shortages we mentioned, such as lack of concentrated resources, insufficient communication and vacancy for high-tech film bases.

Labor Daily: I have a question for Director Yu. Is there any specific support for skilled talents in the culture and creative industry? What measures are being planned or are in place to introduce talents from home and abroad? Thank you.

Yu Chengbin: Mayor Weng mentioned talents as the basis and guarantee for Shanghai’s development of the culture and creative industry. The 50 measures document also mentions the building of professional teams, especially talents from home and abroad and the improvement for the talent mechanism. Mayor Weng has given a rather complete explanation on the series of measures.

To answer your questions, to cultivate and encourage skilled talents, Shanghai has initiated the application, assessment and funding procedure for a project involving a thousand chief technicians and other skilled masters. Since 2013 we have been working with the Shanghai Economy and Informatization Commission to encourage and guide enterprises in culture and innovation to recommend leading skilled talents and instruct them to set up their workshops. Funding has also expanded to benefit more skilled talents and let them play an exemplary role in society.

There are new guidelines for laying a foundation for culture and innovation talents, too. The measures specifically mention putting up training programs for urgently needed talents on Shanghai’s skill training subsidy list. There are plenty of positive policies in the 50 measures.

They also talk about further introducing cultural and creative talents from home and abroad. For domestic talents we will adopt the differentiated policy and provide household registration for the high-end and urgent talents while others can apply for residential permits for steady employment in Shanghai. They can obtain household registration as well when they meet relevant conditions. Regarding the characteristics and diversity in assessing culture and innovation talents, we will also complete the selecting mechanism for such talents and initiate green channels for them.

The 50 measures have improved policies for talents from abroad who indulge in scientific cooperation, academic exchange, and innovation and launch startups in Shanghai. Convenience will be provided for high-end foreign talents in applying for permanent residential permit. Such certificated talents will be given a five-year work permit, which will be entitled to Chinese green card after three years. This is what is different from the other talent policies. Meanwhile they can also apply for the R-visa that can last as long as five years. Thank you.

Xinhua News Agency: I have a question for mayor Weng. In 2011 Shanghai made a decision to push forward the development of the cultural industry. Could you please introduce some of the innovation measures taken during these years? Thank you.

Weng Tiehui: Thank you for your question. In recent years the development of the cultural and creative industry has been relatively quick. The added value has risen from 160 billion yuan in 2010 to 339.539 billion yuan in 2016. And it has increased from 9.75 percent of GDP to 12.1 percent in 2016. The cultural and creative industry has become one of the pillar industries in Shanghai. Since 2011 local authorities, including the CPC Shanghai Committee and the Shanghai Municipal Government, have carried out useful exploration and practice on mechanism, policy guarantee and financial support.

First is setting up a unified leading mechanism. Since 2011, a cultural and creative industry leading team has been set up at municipal and district levels. Three leaders in the municipal government actively take part in the work. The team leader is the publicity minister, and two vice mayors in charge of economy and culture are vice team leaders. There is an office under the leading team. And on the district level, main leaders of the district join as the team leaders. The cultural and creative industry is a comprehensive industry and there are no national statistics on it. Since 2011 Shanghai has made research on the issue and formed a catalogue for statistics. So in Shanghai we have a unified planning in system and mechanism.

Second, we have completed the industry policy system as policy guarantee is very important. Since 2011 we have spent six years completing the industry policy system. We have completed drafting the development plan on culture and reform during the 13th five-year period and a three-year action plan on the development of the cultural and creative industry. And we have also introduced a series of policies in developing cultural trade with other nations, pushing forward the cooperation between culture and finance, and accelerating the development of the film industry in Shanghai. In the second half of 2014 we published a document on accelerating the development of the film industry in Shanghai, which proved to be very effective. The 50 measures announced today are a collection of policies on developing the cultural and creative industry in recent years, and it is also a conclusion and continuation of experience in Shanghai. The publication of the 50 measures shows that the cultural and creative industry in Shanghai has entered a new stage of development.

Third we have increased financial support. Since 2012 we have set up a supportive fund of 300 million yuan annually at the municipal level for the development of the cultural and creative industry. In the last six years, we have invested 2.7 billion yuan into nearly 1,500 projects, which attracted 18 billion yuan from society. Meanwhile, we have set up special funds in the areas of film, online game, animation and entertainment, which effectively accelerated the development of the key industry.

Of course we still have many challenges, and we hope the cultural and creative industry in Shanghai can enter a new stage of development after the publication of the 50 measures.

CBN Radio: The 50 measures suggest that we should innovate ways of financial support and regulate charges. What are the specific steps?

Jin Weimin: Regarding innovation of financial fund support, there are four main measures: The first is to make full use of the municipal special funds for the development of cultural publicity, cultural and creative industry and service industry. We should further optimize the expenditure structure and strengthen support in key areas, including film and digital cultural industries. Secondly, we give full play to the guiding role of the investment funds and introduce all kinds of social capital to the cultural and creative industry and the new media industry. Thirdly, we will further develop functions of the financing guarantee fund for small and micro businesses in the city and guide commercial banks to strengthen credit support for small- and medium-sized cultural and creative enterprises. Fourthly, we will support the application of innovative products in the cultural and creative industry. Qualified cultural equipment products will be included in the city’s recommended list of innovative products.

This year, we will actively promote the regulation of government funds and administrative charge as part of the central government’s policies on deepening the structural reform of the supply side and reducing the cost of enterprises. From April 1 this year, the city has canceled some government funds and administrative charges.

Next, the Shanghai Municipal Finance Bureau will also implement relevant policies and measures in the cultural and creative industry, strengthen performance evaluation, and actively promote the implementation of these policies so as to effectively promote the sustainable and healthy development of the industry. At the same time, we will further strengthen the management of administrative charges, effectively reduce the cost of various enterprises and create a good business environment for the cultural and creative industry.

Jiefang Daily (Shanghai Observer): What trends have taken place in the integration of industrial design and real economy? The second question, what measures will Shanghai take to build a global city of innovative designs?

Chen Yuehua: Shanghai joined the UNESCO “Creative City Network” in 2010 and was named “the City of Design”. Shanghai has achieved global recognition in its design and cultural creativity. In recent years, industrial design has expanded its area to business model design, service model design and data flow. Currently, we should pay attention to several characteristics:

The first is integrated innovative design which means the top-level overall design for the whole product. The C919 is a product of integrated innovation.

Secondly, industrial design can promote the transformation of scientific and technological achievements. It is easier for scientific and technological achievements to enter the market after designing.

Thirdly, industrial design promotes sustainable development. For example, the pure electric and hybrid versions of SAIC Roewe RX5 sell well. The model focuses on sustainable development, aesthetic appearance and favorable prices which meet the demands of the public.

Fourthly, industrial design promotes the development of new models and new industries, including unmanned and shared cars.

Fifthly, industrial design achieves import substitution and improves the competitiveness of our country’s products. I found that a design company innovatively designs traditional textile equipment which is able to replace imported products from Italy.

Sixthly, cultural creations do benefit the life of our people. They can increase the product supply from the supply side to meet demands of consumers. For example, M & G Stationery Co Ltd launches more than 1,000 kinds of new products every year.

When implementing the 50 measures for the cultural and creative industry we will focus on three aspects: design, fashion and brands.

STV: Has Shanghai been able to explore its own mode of copyright transactions and payment for knowledge?

Xu Jiong: Your question concerns the current status, development plan and measures for digital publishing in Shanghai. In a narrow sense, the development of publishing refers to the transformation from traditional publishing or paper publishing to the emerging digital publishing and achieving the goal of “synchronization of paper and digital publishing” and “same content, multiple forms”. In recent years, Shanghai has done much work in this area. For example, the city has tried developing a variety of digital publishing products, including audio books. Efforts are being made to shorten the time difference between paper books and e-book publishing. At the same time, some publishing houses have set up digital publishing departments to cultivate full media editors. East China Normal University Press is dedicated to building the first batch of national key laboratories for the integrated development of publishing. The school is actively exploring new technologies and new modes of integrated publication. However, the development speed of Shanghai in this area is not fast compared with domestic counterparts. The gap is more obvious compared with the advanced global standard.

This is a weak link that we need to improve upon. The rise and development of digital publishing is driven by technology, to start with. However, traditional publishing companies in Shanghai have limited resources. Therefore, we must actively seek external cooperation and join hands with all kinds of Internet innovation and start-up companies. The 50 measures suggest that we should encourage deep cooperation between private institutions and state-owned publishing institutes, especially in the key area of digital publishing.

In a broad sense, digital publishing includes network literature. The industrial scale and market share of Shanghai’s network literature have obvious advantages. Shanghai has the country’s leading sound book publishing platform. The city’s traditional publishing institutes have been seeking external cooperation in recent years with the support of government departments and have achieved some results. However, there is still a lot of space for improvement in the breadth and depth of cooperation. Of course, cooperation is not limited to these kinds of digital products and a small number of enterprises. The transformation and development of Shanghai’s traditional publishing call for an open attitude and vitality. We warmly welcome enterprises from home and abroad to develop in Shanghai.

Digital publishing is a new field with great potential. We need to seize this opportunity to improve weak links of the city.