Published: March 13, 2005 – Copyright The New York Times
Here is a red dinosaur that demands our attention. The cartoon character, named Gogo, bounces on a monitor inside China’s largest bookstore. ”Do you like doughnuts? Do you like burgers? Do you like sandwiches?” he sings in English.
”Yes I do!” the subtitles prompt. But the audience misses its cue. Look at them ignoring Gogo: a seated bundle of green hand-knit sweaters, black pigtails and bowed heads . . . reading. They’re poring over cartoons — translations of ”Calvin and Hobbes” and of Japanese manga — and the locally drawn ”Legend of Nezha” books, which held 10 of the top 11 places on a Chinese best-seller list last year. Others turn the pages of a Garfield English-Chinese dictionary, which contains no entry for lasagna, but one for tofu.
Forty focused children crouch on Book City’s fourth floor, and 40 more gather at the neighboring nook, and 40 after that. It’s calming to reach this pool of prepubescence amid the chaos that is Book City, whose five floors hold 230,000 titles.
Downstairs, the crowds are dense and the juxtapositions jarring. ”Monica’s Story” lies between Bill Clinton’s and Hillary Clinton’s autobiographies. A box set of books about Hermann Goering rubs shoulders with ”What’s Behind Jewish Excellence?” American titles in Chinese translation range from the predictable — ”The Da Vinci Code” and the Atkins diet — to the surprising: Henry Rollins’s ”Get in the Van,” a memoir of his punk years, and a collection of Woody Allen books whose Chinese title promises ”Mensa Whores.”
But translations into Chinese make up only 6 percent of the 190,000 books printed in China in 2003. Instead, the world’s fastest-growing book market — adding an estimated $300 million in sales annually — is fueled by textbooks, which account for nearly half of all purchases. (This is according to China’s statistical yearbook and a definitive book on publishing, which offer the most reliable figures available on the Wild West atmosphere of the Chinese book market.)
At Book City, shoppers face an entire floor of English-learning materials. One, ”Love English,” offers pick-up lines and pillow talk with cultural hints. Among its instructions: that ” ‘I’m bored’ really means: ‘Do you want to have sex?’ ” Practice cassettes are included.
At the store’s entrance, a red banner urges shoppers to ”Maintain Communist Party Members’ Advanced Character.” This is, after all, a state-owned shop. Eighty percent of China’s 72,000 booksellers are private, but nationalized stores ring up two-thirds of sales. At Book City, the Communist Party tracts sit neglected. Instead, crowds jostle toward a nearby shelf with business titles like ”Confronting Reality,” ”New Leadership” and ”Change the Tape of China.”
Book City is overwhelming. The din, the eager customers, the slippery stacks of oversized paperbacks — hardcovers are less common — whose covers call out: ”I Was an American Police Officer,” ”I’m Only Raising You for 18 Years” and ”Chinese-Style Divorce.” There’s also the 2000 hit ”Harvard Girl,” the story of how two dedicated Chinese parents groomed their daughter to get into Harvard. The copyright page reads: 63rd edition, 1.76 million copies. It costs just $2.41, the average price for a general interest text, which illustrates the difficulties both foreign and Chinese publishers face in trying to make a profit.
Chinese best sellers often see their themes repeated. ”Harvard Girl” quickly gave rise to ”Harvard Boy,” among others. A whole pack of lupine imitators followed the successful novel ”Wolf Totem.” Even banned books get knocked off. The muckraking ”China Peasant Survey,” about the plight of China’s peasant farmers, has spawned a look-alike called ”China Migrant Worker Survey.”
Outside Book City, the view is pure New Beijing: bigger, wider, flatter, more. The squat buildings still feel new; memories of the old neighborhood linger. A man reminds me that before one of the capital’s 44 Starbucks opened across this square of brown grass, before Book City, this was the site of Democracy Wall, where Beijingers posted demands for openness and reform. Now, they shop for books. In fact, Book City has so many customers that it figures into the planning for the 2008 Beijing Olympics. Plans call for doubling the existing building so it can accommodate 200,000 shoppers at once.
After a decade in China, I thought I’d seen it all: murder, jail, aliens, rodeo. But nothing prepared me for its publishing industry, in puberty.
”Doing business here is like playing ice hockey without referees,” says Toby Eady, a London-based literary agent who represents several authors who have written on China. They include Jung Chang, who wrote the popular novel ”Wild Swans”; Ma Jian, a dissident who wrote the political travelogue ”Red Dust”; and Tim Clissold, the author of the business memoir ”Mr. China.” In China, Eady says, ”a contract is good until you step 10 centimeters out of the office.”
Adrian Zackheim, the publisher of the Penguin Group’s business imprint, Portfolio, has a similar take. ”When I walked into a Beijing bookstore, I felt like a Russian émigré in New York, seeing his first supermarket,” he says. ”Book publishing in China seems deliciously complicated. Though I might not be so charmed by it if I had to make my living there.”
In reality, the situation is far less defined. At the heart of the state press’s power is its control of the nation’s market in International Standard Book Numbers, or ISBN’s, the bar-code-like number that identifies a book for commercial consumption. Without one, a book can’t be published in China, with the exception of party tracts and state-sanctioned religious texts. (Among the religious books on sale at the Xishiku Cathedral in Beijing are Bibles, the catechism and ”God, Country, Notre Dame,” the autobiography of the university’s former president).
But as in so many other sectors of China’s economy, a parallel, unofficial market in ISBN codes has mushroomed among China’s estimated 30,000 private publishers. Known as ”culture houses” or ”booksellers,” they act like packagers: finding titles, buying rights, and shopping them to state-owned publishers, who will issue an ISBN for a fee ranging from $1,250 to $2,500, then publish the book under the state imprimatur. Agreements can also include the sharing of production costs, marketing and distribution.
It’s considered an openly illegal system, tolerated to a point. Officially, the buying and selling of ISBN’s is forbidden. In a round of recent speeches aimed at culling pornography and other ”illegal publications jeopardizing social stability,” government officials vowed to crack down on culture houses, calling them ”malignant tumors that must be excised.”
The question is at what cost. ”Private publishers are doing an extremely valuable job,” says Andrew Nurnberg, whose London-based literary agency specializes in foreign rights. In the West, packagers are often considered ”hired help,” he says. But in China, it’s the reverse. Although the state ostensibly controls publishing, it relies on the private culture houses to do the heavy lifting.
The story of Yang Erche Namu, a Beijing author and onetime popular singer, is also telling. Namu has published 12 books in Chinese, and her memoir, ”Leaving Mother Lake,” was released in 2003 by Little, Brown. After an editor commissioned her first book, Namu was handed a bag with $10,000 in cash — and no rights. She estimates the book sold two million copies, not counting pirated editions. In China, authors and editors rarely forge a lasting bond. For each of her successive 11 books, Namu has worked with a different publisher. Now they pay advances against royalties, but, given unreliable sales data and piracy, she says she still can’t support herself from writing. Instead, she relies on income from guesthouses she owns in her native village. She has also started a lingerie line, for which she is seeking backers. ”I am famous, everyone knows me, but I have no money!” she says with a laugh.
These are the stories that make agents wince. Yet compared with the West, agents play a much smaller role in the Chinese industry. A few dozen cover the entire nation, and only three firms represent translation rights.
Agents and American publishers say the average amount they receive for Chinese rights is a paltry $2,500, which is what a Chinese publisher paid for the hugely successful business book ”Who Moved My Cheese?” It became China’s all-time best-selling translated work, with official sales of two million.
”Of our 30,000 contracts, 60 percent are paying,” says Luc Kwanten, the head of the Big Apple Tuttle-Mori literary agency, which has branches on the mainland and Taiwan. ”Publishers are conscious of the fact that royalties have to be paid. And the publishers do have money,” he says. ”There is still a trend to view this as a poor country. It’s not a poor industry. It’s still a wide-open market, like a dry sponge. It senses the water, but isn’t there quite yet.”
China’s book sales totaled an estimated $5.6 billion in 2003, compared with $23.4 billion in the United States. Web sales are fledgling in China, due in part to a reliance on cash-on-delivery payments, but book-selling Web sites deeply discount the standard 40 percent markup over wholesale prices. Popular portals include dangdang.com and joyo.com, which Amazon bought for $75 million last year. There are also book clubs. The Bertelsmann Group runs one based in Shanghai with 1.5 million members. It has also invested in a bookstore chain.
… ”I went to a bookstore in London once,” Zhu Xiaoli, a manager at OpenBook, says. ”It was so calm, with so few people. I asked the saleswoman: ‘How can you make any money?’ ”
Because of piracy, the same question is constantly asked of China. Not everyone answers eagerly. When I asked one publisher about piracy, he plunged into a polemic about my exterminating the American Indians, angrily stabbing his palm with his finger. Xin Guanwei, Chinese publishing’s Rosetta Stone, compares the heightened campaign to protect intellectual property rights to America’s war on drugs. ”Piracy is our drug problem,” he says.
It’s not going to be easy. On my desk sit a pack of fake Marlboros, a knockoff Allen Iverson silver medallion, a bootleg DVD of ”The Aviator” and a copy of the best seller ”No Excuse!” whose credited author is Ferrar Cape, West Point graduate and motivational speaker, but who is rumored to be a Chinese invention.
Increasingly, however, infringement cases are being heard. In the last two months, the copyright holders of Peter Rabbit and Garfield won piracy suits. One of China’s best-known novelists was found guilty of plagiarizing parts of the romance novel ”Falling Blossoms in Romantic Dreams.” To top it off, last month a Chinese author won his case against a Web site that had illegally posted his material. Its subject? Protecting intellectual property rights.
The control of foreign content is also loosening, to a point. Last year, a Chinese publisher offered to buy the rights to ”River Town: Two Years on the Yangtze,” by Peter Hessler, a Beijing-based writer who contributes to The New Yorker. Hessler passed after learning that unspecified parts would be cut. ”The point is to be honest to the people you write about,” Hessler says. ”It’s condescending to them to allow the material to get softened. I have faith that one day it will be translated directly.”
Indeed, the government has become less restrictive of some genres, among them history and health — that is, sex — by Chinese writers, and law and political thought by foreigners. Lindsay Waters, an editor at Harvard University Press, recalls being approached by a former Red Guard in 1998: ”He said, ‘Do you know that I used to destroy books? Now I’m helping to bring in John Rawls’s ‘A Theory of Justice.’ ” Last year, Waters published ”China’s New Order” by the political scientist Wang Hui, which would probably never have seen the light of day in China.
When it comes to exporting culture, not goods, America enjoys a ballooning trade surplus with China. Of the estimated 12,000 translations published here in 2003, nearly half were of American books, a ratio consistent over the past five years. Try naming more than a handful of books by Chinese authors published in America in that time.
Lauren Wein, the associate rights director for Grove Atlantic, says she has been surprised at the range of titles the Chinese have bought from Grove, including ”The Hungry Gene,” about obesity, and a book by the experimental gay writer Dennis Cooper. But for the most part, ”China wants the heavy hitters, like ‘Sex and the City’ and ‘Cold Mountain.’ ” After all, she says, ”They still have ‘On the Road’ to publish.”
In fact, the first Chinese edition of Kerouac’s classic appeared in 1989. For years, I had been looking for its translator, the Beats’ sole messenger to China. I finally tried Google.
Wen Chu’an answered his phone at Sichuan University, where he teaches, among other subjects, Beat Studies. The photo on the jacket of his translation of ”Howl” — ”Hao jiao” — shows a wan, middle-aged man with a comb-over.
Before I phoned, I’d spent the day sifting through all my notes on Chinese publishing, and my eyes were glazing over at the statistics. All this talk about the book business — potential growth and infrastructure flaws — had turned texts into a commodity, no different from cars or socks.
Then I asked Wen the obvious. Yes, he had seen the best minds of his generation destroyed by madness. But why translate Kerouac and Ginsberg? ”Because the impact of these Beat editions on readers is great,” he said. ”Chinese young people can find something inspiring and encouraging in the Beat lifestyle: the ardent love of freedom in action and speech, the firm stand against everything inhuman, the giving priority to the spiritual life and denying the attitude that money-seeking is everything.”
Both of Wen’s Ginsberg titles have an official print run of 20,000. ”On the Road,” which Wen says is available free online in China, had sold 30,000 copies by 2002. Small potatoes next to Chinese sales of management guides like ”The West Point Way of Leadership.”
But wait. ”I believe there are pirate editions by unofficial private publishers,” Wen continued. ”So actually, the numbers are much more than that.”
He didn’t sound at all upset.
Mike Meyer went to China in 1995, via the Peace Corps. He is writing a book about the destruction of historic Beijing, where he lives.
Japan Inc., RIP
By BILL EMMOTT – Copyright The Wall Street Journal
March 10, 2005; Page A16
The appointment of the first foreign-born chief executive to run one of Japan’s most famous companies, Sony, looks like a clear sign that something dramatic is happening in Japanese business. It isn’t. Instead, the arrival of Sir Howard Stringer at the helm of Sony is a sign that something dramatic has already happened.
Writing about Japan, especially about Japanese business, can be a frustrating affair. Nothing ever seems to happen. Despite hundreds of press conferences each year, every effort is made to avoid the occurrence of big, exciting and newsworthy events — just the opposite of the desire of most American publicists, which is to try to create drama out of mundane reality. Big, dramatic events would be not only embarrassing to Japanese executives but also disturbing; this is a culture whose every ritual is dedicated to smoothing over uncertainties and avoiding discomfiture.
That does not mean that dramatic things do not happen. Sometimes they take place through sudden events, which in the 15 years since the Tokyo stock market began its collapse has mainly meant bankruptcies. Mostly, though, they take place through incremental change, a remorseless process of step-by-step reform and adjustment, none of which individually looks like much but which together, when you look back over several years, can look dramatic. That is what has happened in Japanese business.
Think of all the features that, 10, 15 or 20 years ago, were considered axiomatic about big Japanese companies. They had extensive cross-shareholdings with other firms, especially suppliers and banks. They used the promise of lifetime employment to keep their labor force loyal, paying according to age and seniority. They had strangely large corporate boards, stuffed with grandees and retired executives. They worried about sales and market share, not profits. Their top executives all came from within, and behaved more like bureaucrats taking their turn in the top seats for a few years than like corporate chieftains. The idea of foreigners on the board, let alone in senior management, was anathema.
Such generalizations were always a bit overdone, but not by much. Now, you can cross out every single one of them. Cross-shareholdings have largely been unwound. Lifetime employment, even in big firms, is now the exception not the rule thanks to changes in labor laws that have allowed workers to be employed on short-term contracts. Such employees make up 40% or more of the total at manufacturers such as Toyota. Many — though not all — corporate boards have been streamlined, with more independent directors and fewer placemen. The profitability of big Japanese firms has risen to record levels (when measured as a ratio to sales), thanks to restructuring, the aforementioned labor-force changes, and efforts to fatten margins. Falling wages leave Japan’s domestic economy still suffering from deflation and weak demand, but do wonders for corporate profits.
Executives remain primarily bureaucratic but there are now many more exceptions, sounding and behaving more like American CEOs and with senior management pay geared to performance. And foreign executives are no longer unacceptable. There have been plenty at the helm of the Japanese subsidiaries of foreign multinationals, such as Mazda (Ford) and Isuzu (GM). Carlos Ghosn, the Brazilian brought in by Renault to run its 44%-owned subsidiary, Nissan, has become a national hero for the way he turned round Japan’s second-largest, but long-ailing, car maker. And now Sir Howard, born in Wales but long prominent in the American entertainment industry, has been called in from Sony USA to run the parent company.
With Sony, the surprise should be that it has taken so long. This Tokyo-based firm has always been a maverick compared with its staid Japanese competitors, such as Matsushita in Osaka, parent of the Panasonic brand among others. Its founders, especially Akio Morita, were not afraid to act like showmen, conjuring up events for publicity purposes rather than smoothing them over. They liked profits, rather than just worshipping market share. Even in the 1980s and early 1990s, Sony gave powerful executive roles to foreigners, but only in its overseas operations. It was a pioneer in slimming down its board and using more independent directors.
The reason it has taken so long is that Sony, like Toyota in the car industry, continued to be successful even after the Japanese economy turned stagnant during the 1990s. It had built a powerful world-wide brand and a world-wide business, in both hardware and software. Its main problems were outside Japan rather than within, thanks to its huge but troubled acquisition of Columbia Pictures in the mid 1980s which added movies to its already large music business, the sorting out of which eventually fell to Sir Howard. Through its PlayStation games console, Sony continued to build its image as a cool, innovative and profitable business. Now, however, Sony’s image is fading and its consumer-electronics business in particular has lost its shine: hence the elevation to chief executive of the firm’s currently most successful and impressive executive. The fact that he is a foreigner is almost secondary.
Well, it isn’t entirely. The novelty of Sir Howard’s appointment is that he is the first foreigner to run a big Japanese firm that is not (like Nissan) a multinational’s subsidiary — though 40% of Sony’s shares are, in fact, held by foreign institutions. What he mainly represents, though, is two things: first, the striking fact that Sony felt under pressure from its shareholders to make changes; and, second, a willingness to be ruthless, to do whatever it takes to solve corporate problems. Choosing a foreigner is a symptom of that willingness — but also of the fact that Sony’s entertainment business, which is centered on the United States, is doing far better than its Japan-centered hardware divisions.
How this foreigner will fare is going to be the stuff of future business journalism. It won’t be easy, but then he wouldn’t be getting the job if it were. What can already be said is that Japanese business is unlikely again to be capable of being summed up in a simple paragraph of standard business practices. The watchword now is diversity, not conformity: diversity in who runs companies, how they are owned and governed, how they handle their workers, and much more. Just as it makes little sense to describe P&G, Dell and Amazon as all belonging to a standard American way of doing business, so it no longer makes sense to put Toyota, Sony, Canon, Nissan and Matsushita under one collective label.
* * *
The element of change that is still relatively scarce, however, is entrepreneurship — the very thing that created Sony in 1946. It is not entirely nonexistent: New firms have been notable in recent years in retailing, telecoms and financial services and, of course, the Internet. So far, however, they have struggled to make a big impact. The reasons lie, in part, in regulations that discourage new business formation, in part in the very sluggishness of the Japanese economy, in part in the still slow pace of divestment of poorly performing divisions at older companies.
There are signs of change here too, however. Takafumi Horie, the youthful boss of Livedoor, an Internet-services company, is mounting a takeover challenge for Nippon Broadcasting Systems, a venerable radio broadcaster. Such a newsworthy event will probably join the long list of past failures at rocking the Japanese boat in this way, for the bid has been rather wild in every way. But the fact that a young Japanese entrepreneur was willing to try it, and to shrug off the opprobrium that has inevitably come his way, could nevertheless be a clue that gradual, incremental change is coming in this aspect of business, too. It may prove hard to spot the rise of a new class of entrepreneurs until it has already happened.
Mr. Emmott is editor of The Economist.