Ownership Changes of Chinese Newspapers Listed? The Case of Beijing Media Corporation

Abstract

The ownership structure is important and marks the development of a market. For media companies, the change of their corporate structure is an important achievement in the cultural systematic reform and deepens the reform in the publishing and distribution industry, which is necessary for the development of a modern cultural industry system.Chinese media opened first time to market forces in 1978 when they turned from non-profit institutions (shiye danwei) to profit-oriented organizations. Advertising revenues became and still today are the first and most important financial source for Chinese media organizations. The commercialization of the media industry was further consolidated in January 1996 when the first newspaper conglomerate, the Guangzhou Daily Press Group, was established. Since then a number of newspaper groups, including the Nanfang Daily Press Group, Yangcheng Evening News Press Group and Wenhui Xinmin Press Group have been established. While the conglomeration of press industry took place, quite a few enterprises associated with media organizations went public, marking the beginning of Chinese media corporatization. As restructuring the state-owned enterprises (SOEs) has been considered a fundamental factor for Chinese economic success in the last decade, the recent restructuring of Chinese media enterprises is at the top of agenda of reforms of the Chinese cultural industry. The ownership change, towards a private ownership, has been considered a necessary condition for enterprise’s efficiency. In this paper we provide an explorative analysis of the corporate governance of Chinese newspapers which are listed on stock markets. In particular we focus on Beijing Media Corporation (BMC), which is the only Chinese press enterprise listed in Hong Kong Stock Exchange, therefore offering H shares to foreign investors. We examine the changes of its ownership structure and its possible implications by adopting an exclusive economic-financial approach. This paper is organized as follows: in section 1 we provide the theoretical background for the analysis of corporate governance in general; section 2 focuses on the Chinese background, especially addressing the structure of press enterprises. The BMC case study is discussed in section 3. Conclusions are drawn in section 4.