1 The Relationship between Copyright and Small & Middle Size Enterprises Chao XU NCAC Dec , 2004 Shanghai

2 Catalog I. General information of the copyright industry in China II. The closer tie between the interests of copyright and the small & middle size enterprises III. Conclusion

3 I. General information of the copyright industry in China The importance of the copyright industry in the national economy Copyright industry:the enterprise whose added value mainly derives from the exploitation of copyright, such as the industries of publishing, radio and TV, film, sound recording, computer software and some Internet enterprises.

4 Publishing Industry the increasing rate of GDP 2003: 9%, publishing industry 2003 : billion RMB, increasing rate: 11.76% Book publishing 1992: billion RMB, amounted to 0.38% of the GDP, 2003: billion RMB, achieved at 0.98% of GDP, the average increasing rate during 11 years: 25%, 1.78 times of the national economy.

5 Software Industry Software industry 1992: 4.37 billion RMB, occupied 0.16% of GDP; 2003: 160 billion RMB, increasing rate: 45%, the average rate 1992 to 2003: 38%, 2.71 times of that of GDP and far beyond that of the world The sale and exportation of software industry would keep an increasing rate of % to % for the following several years, and the sale would reach 250 billion RMB in 2005

6 II. The closer tie between the interests of copyright and SMEs Copyright is not only an important element for the development of the industries of publishing, film, sound recording, radio & television, software and Internet, but also has a closer tie with the interests of some SMEs.

7 II. The closer tie between the interests of copyright and SMEs In contrast to the enterprises with high- tech products, the enterprises with products of high added value of art do not need too much investment and advanced technology. The decisive element for the enterprise development rests with the creativity and the designing capacity for the artistic form of the products.

8 II. The closer tie between the interests of copyright and SMEs China has a long history of culture and art and lot of talented designers for artistic design. The cost of social labor force in general is low Less investment and requirement of high tech the artistic designs of the products are updated very fast. The flexibility is an advantage for SMEs.

9 Case 1 Dehua County of Fujian Province has 1100 enterprises producing porcelain products, everyone consists 3-5 to 100 persons. Past, dull and simple designs, low annual value, design imitation by each other accustomed, investment environment affected Fujian Copyright Provincial Bureau helped the local government to form a genius to encourage the creativity. Porcelain products became the pillar industry and mainly sold to the overseas.

10 Case 1 Porcelain products in Dehua 1990: 100 million RMB; 2002: 4.5 billion RMB; 2003: 5.3 billion RMB, of which 4.15 billion RMB was from exported products. From Jan. to Sep. 2004, the exportation value: 4.5 billion RMB, the total value of the exportation would be expected to be over 5 billion RMB.

11 Case 2 Sanchen Corporation in Hunan Province was a small private company. Contribution of cartoon image “Blue Cat”: Learn from Disney successful experience as 1. step: build an industrial chain of cartoon products through the authorization of the use of cartoon image, a TV program, and produced related books and audiovisual products.

12 Case 2 TV program, books, audiovisual products, stationery, toys, realia, food, clothing, shoes, caps, commodities, 4000 kinds of products, with annual sales of 2 billion RMB The sales of VCD and books with “Blue Cat” design was over 80 million RMB in a year

13 Case series of “Prankish Blue Cat 3000 Questions ” acknowledged by Guiness, obtained the medals of the 18 th to 20 th China’s TV Golden Eagle and the prize of the 5 th China’s TV Golden Children, broadcasted in 1017 TV stations in the mainland, Taiwan and HK S.R. synchronously with a total air time of 500 hours every day.

14 II. The closer tie between the interests of copyright and SMEs totally 8730 computer software companies, 57% less than 100 employees in one company, 34 % employ staffs in company. More than half of the software enterprises are relatively small size. Thus it can be seen that most computer software companies in China are SMEs.

15 III. Conclusion Copyright relates the interests of litterateur, artists, and enterprises The development of reproduction and communication technology promoted the copyright development In the age of knowledge economy, the promotional function of copyright to the development of the social economy is becoming more obvious.

16 III.Conclusion Since 1970s, the contribution made by the copyright industry to growth of the national economy has been in evidence in the western developed countries. Starting from 1990s, the importance of copyright industries has also been realized and gained more concerns in the developing countries.

17 III.Conclusion WIPO: in developed countries and developing countries the portion of copyright industries in the GDP is between 3-6% 2002 GDP of China: billion RMB, press and publication: billion RMB, radio and TV: 51.4 billion RMB, software: 110 billion RMB. These three made up 5.46% of GDP, plus the other copyright industries, it could be estimated that the overall outcome of the whole copyright industries in China may occupy 6% of the GDP.

18 III. Conclusion China is the biggest developing country with a big population and weak economy basis, in a period from the planned economy to the market economy system. The development of SMEs play an important role for the continuous rapid growth of the national economy.

19 III. Conclusion As the high tech enterprise needs high cost investment and high risk, so the development of SMEs, whose added value mainly comes from the exploitation of the copyright is very important. The sole condition to develop such industry is to establish successful legal environment and to eliminate all kinds of pirated activities.

20 Thanks