With the global financial crisis having an impact on China’s export-oriented manufacturing industries, many businesses have been selling products originally destined for export markets in domestic markets. In contrast, one domestic cartoon company has seen its comic books debut internationally before finding their way back to the home market.
Established in 1997, Tianjin Creatworld Cartoon Co. is the creative force behind the operation. The comic book Romance of the Three Kingdoms was recently published by Anhui Publishing Group (APG); three of the other four Chinese popular classics (The Dream of Red Mansions, The Water Margin, and The Journey to the West) are coming soon to the local market.
In the past Japanese and Korean works have had a deep influence in China. Young people have been obsessed with cartoons and animation (anime) from Japan and South Korea. Meanwhile, China has remained a popular processing base for overseas cartoon companies on account of its cheap labour. Unsurprisingly, the international companies are also vying for the Chinese market.
But now Chinese creativity is moving beyond the outsourcing model. Bringing together distinctive characteristics of Chinese painting with the country’s unique literary resources, Creatworld’s comic renditions of the four popular novels generated interest in the Korean and Japanese publishing industries. Just as the Chinese company was running into funding problems and was facing the prospect of closing down, a South Korean publisher closed a deal of RMB 10 million with the company to act as the international copyright agency for these books.
Following this, Japan’s Toppan Printing approached Creatworld and both parties signed a deal to publish 10,000 sets of Water Margin with 7 percent of royalties going to Creatworld
In mid-2006, The Water Margin was published in Japan. Since then the comic books have entered other international market including Korea, France, Britain, and Germany. 540,000 copies have been sold globally since 2006.
In addition to bolstering China’s cultural development (wenhua jianshe) and ‘Chinese’ values, the Chinese government regards the cartoon and animation industries as potentially lucrative industries. A number of animation industry bases (jidi) have been established, supported by tax incentives and government funding. Creatworld is located in such a base in Binhai, which is a special export development zone not far from the northern metropolis of Tianjin. The base is designed to benefit resident businesses through cluster effects, to attract creative talents, and to help establish a consolidated industry chain.
The central government has released a series of policies to support the development of the cartoon and animation industries. In 2003, Ministry of Information Industry (MII) forecast that these industries would be a new growth point in the economy. In 2006, the State Council (2006) issued Opinions on Promoting the Development of National Animation Industry. In 2008, the Ministry of Culture (MoC) launched a project to support original cartoon and animation
Under the project plan, RMB 7 million would be utilized to develop cartoons, animation works and creative talents. The four Chinese classics comic book series won the first award, in this way gaining financial support for further development.
The establishment of industry bases and the release of support policies may be functioning to ‘industrialize’ cartoons and animations, but more importantly, the lifeline of the industry relies on promoting creativity and bringing creativity to the market. As the market environment matures and with government policies increasingly beneficial to the development of ‘home-made original’ cartoons, domestic operators are trying to figure out how to harness creativity to appeal to consumers. Crudely produced Chinese cartoons with insipid plots and unattractive characters have been turning off readers. This is a critical time for the industry. Creative content and international production values are necessary to breathe new life into a stagnated industry.
It is important to promote talent, not only in the area of creative production, but also in areas such as marketing and copyright. Creatworld has a flexible working environment. When the company received its funding, the business owner immediately bought houses for artists who were working there, even despite the company being on the verge of bankruptcy.
The artists’ income also increased significantly. Of course, financial incentives are not all that creative talents pursue. The sense of pride gained through their creative work, especially when they compete on the international market, is an important motivation.
The comic book series entered the international market thanks to its copyright value. This channel represents a different kind of market strategy in China. Usually original works target domestic markets first, before considering international markets. For Creatworld, it was the reverse. The company was approached by several domestic publishers after the books’ initial success in Japanese market. Overseas success made domestic publishers confident about reception in the domestic market. Then Creatworld struck a deal with APG in June 2008. The ensuing sales figures validated the vote of confidence. The complete set of Romance of the Three Kingdoms, composed of 20 books, was priced at RMB480; 2700 sets were sold within a month of the launch in April 2009.
All this occurred seven years after the creative idea was born. Back in 2001 Creatworld had no means to obtain funding and have its content published. Moreover, the fundraising strategy of working with international distributors may be of value to other domestic businesses. To expand opportunities and quicken the pace to reach international markets, Chen Weidong, the owner of Tianjin Creatworld Cartoon Co., initiated a joint venture, Cunren Cartoon. Co. Ltd. He owns 70 percent of the total shareand has complete power over management, finance and personnel. The remaining 30 percent, or RMB3 million, is contributed by Korean capital.
By exploiting the synergistic benefits of such joint venture models local businesses are now more ready to participate in international cooperation. In order to become more competitive in the international market, however, it is vital to establish a complete cartoon industry value chain. Original creative work, production, operation and branding are important links along the chain, with production at the bottom of the smiley curve. Other links can generate high added-value. A focus on production, however, may lead to a loss of value. Indeed, the transition from processing (OEM) to an original content focus is inevitable if value is to be maximized. Development of spin-offs and the connection between comic books, animation, and games also help to augment the value of the original works and promote the development of the whole industry.
Recreating Chinese classic works in a cartoon format is not a new idea. However, there are several factors at play in this model. First, applying Chinese painting elements adds value; second, innovative funding and distribution models assist the generation of content; and third, attracting and retaining talent is crucial. These factors are all contributing to the successful debut of comic books in the international market.
The recent government support for cartoon and animation has created a better development environment, especially for original content work and for the nurturing of creative skills. While Chinese classic literature is a valuable asset for artists, they also need to develop new works; in other words, they need to keep up with the times. The cartoon and animation industries not only promote Chinese culture and values, but also contribute to economic growth and modernisation. They have the potential to reverse the country’s heavy cultural trade deficit with foreign countries.
With China trying to shaking off the image of a processing base by attaching great importance to creativity, local businesses have an unprecedented opportunity to enhance their position in the emerging industry chain and generate more value. Through joint ventures or other kinds of cooperation with international businesses, local businesses can enhance competitiveness and develop international markets.