NEWS & VIEWS
May-June 2016
25
What is really happening in China?
by peter bruce
In March, China’s annual party conference
took place with the announcement of China’s
13th Five-Year Plan (FYP), from 2016-2020.
What does it all mean? China’s FYPs are
blueprints laying out the country’s social,
economic and political goals. They encompass
and intertwine with existing policies, regional
plans and strategic initiatives. An FYP signals
the Chinese government’s vision for future
reforms and communicates these down the
chain of command.
The 13th FYP is the first under President
Xi Jinping’s leadership, and the articulation of
China’s vision for its future. As such, foreign busi-
nesses must be fluent not just in the substance
of the plan, but also in its language, in order
to argue for how they fit into China today.
This FYP is central to understanding where
China is heading. As we have seen over the
past few years, even if you are not directly per-
forming business in China, you will still feel its
effects. One economic analyst said: “If China
catches a cold, the rest of the world starts
sneezing.” For sure, the current downturn in
many South-east Asian countries is a result of
the slowing Chinese economy.
So, how is this FYP going to specifically
affect the TV, broadcast and media industry
in China and the region? After attending
this year’s CCBN (the 24th China Content
Broadcasting Network Exhibition) in March in
Beijing, things are a little bit clearer.
By 2020, China’s R&D investment will re-
portedly account for 2.5% of GDP — so science
and technology will benefit, with an expected
focus on semiconductors, chip materials,
robotics, aviation equipment and satellites.
One area of focus highlighted is to ensure that
China’s high investment in education actually
translates into real-value developments in the
fields of science and technology.
I attended the conference that took place
at the Beijing International Conference Center,
where the keynote speech was given by Pro-
fessor Du Baichuan of SAPPRFT (the State Ad-
ministration of Press, Publication, Radio, Film
and Television). Reflecting on President Xi’s
FYP, Professor Du’s presentation highlighted
five key areas: innovation, coordination, green
development, open and shared develop-
ment. With a projected ‘medium-high’ rate
of economic growth of above 6.5%, China
will reportedly invest 2.5% of GDP on R&D.
The ‘belt and road’ initiative will con-
tinue to connect China with Europe via land
transport (the Silk Road economic belt) and
improve marine connectivity (the Marine Silk
Road project). The technology plan focuses on
1Gbps broadband speed availability to urban
areas and 100Mbps to more regional areas.
The uptake of cloud services was projected
to stabilise to 20% from 2017 onwards, after
an initial spike, to over 40%. Heavy investment
is predicted in technologies such as on-board
video for airlines and development of near-light
speed quantum communications — faster and
more secure than today’s fibre connections.
The CCBN conference sessions addressed
the trend of over-the-top (OTT) in China and
the challenges for cable networks in address-
ing reduced growth in their sector.
Also discussed were the three Chinese
cable access standards of C-DICSOS, CHPAV
and HINCO. There were also many papers
on the advantages of the TVOS operating
system and its implementation. At the
exhibition site, there was a large increase of
operational cloud solutions; almost all booths
displayed a cloud logo.
As an observation, it is clear that China is
having to re-adjust to operating in a global
market. China has seen a rapid increase in
global investment, including from emerging
markets in Africa, South-east Asia and South
America. However, the bulk of Chinese invest-
ment is in Western Europe and the US.
With the 13th FYP, China is sending a
softening message; however, reform of the
military and a speeding up of its modernisa-
tion programme is also a key component for
China to protect its interests internationally.
Conclusion
The world is changing and China is preparing
itself for the next five years. While there may
be an economic slowdown, it will not stop the
country from focusing on technology growth
up to 2020 and beyond. We expect to see a
strong push for China as an innovator at the
leading edge of technology and science, thus
shedding the reputation that China invents
“second-best”.
Peter Bruce is Director of IABM, APAC.