What’s the Deal with China?

News Corp. Time Warner. Xinhua. Think one of these things doesn’t belong? Not if the Chinese government has anything to do with it. China has earmarked $7 billion USD, not including any money raised through non-state investors, to develop its state-owned media groups–including CCTV and Xinhua–into international conglomerates. They are intended as competition to the “household name” media giants, essentially breaking up the West’s media monopoly and positioning China atop a very strategic financial and political perch.

Just how far, though, can state-run media companies like Xinhua, CCTV, and People’s Daily really get in the global American-style capitalist system that we all know and love? The answer may surprise you. Over the past fifteen years, the introduction of a market economy to the production of print and broadcast media in China has resulted in a truly liberating restructuring of the sector. Rapidly increasing viewership has turned advertising revenue into a $28 billion USD industry in the country, and the reliance of state media outlets on the state themselves has dropped dramatically. While technically still state-owned, most state media outlets are no longer heavily subsidized by the government.

The Chinese government, contrary to popular perception, truly takes a “hands-off” approach to the majority of news media. It does certainly keep, to put it lightly, a tight rein on any traditional and new media it perceives as challenging its political authority. Its Internet police force numbers more than 30,000–and most of us in the field can rattle off a few names of famous imprisoned bloggers and activists from the top of our head. But despite this, the government has allowed coverage of entertainment, sports, and finance to go mostly unregulated, and a broad spectrum of media products have cropped up in recent years.

This system is, to borrow the words of CFR Senior Fellow and sinologist Elizabeth C. Economy, “schizophrenic.” But it works. While many surely crave political commentary, a market for consumers of non-political news is expanding by the day–illiteracy in China has, after all, decreased rapidly, from around 80% in 1950 to greater than 95% today. And along with more consumers, advertising revenues are ready to meet the demand.

It should be no surprise, then, that the Chinese government is ready to expand the system internationally. They have seen the the monetary success of introducing the media to an internal market economy, and are ready to use it to the country’s advantage. And when they do, the international community should be prepared. If the Chinese government plays its cards right, these state-backed media conglomerates may end up playing a huge role in the international system. Not only will they serve as machines of soft power supporting Chinese foreign policy abroad, but the government will generate ridiculous amounts of revenue–in the tens of billions per year, if not more–just for doing it.

Maybe the global market will reject media produced by a country with such a repellant journalistic reputation as China. But I’m not sure we should hold our (collective) breath.