China Meiguo

I came across this article which discusses the recent success of some Chinese peer-to-peer (P2P)file-sharing services. In the U.S. successful lawsuits by the music and film industries have limited the ability of companies to profit from operating P2P services whose existence is based on encouraging illegal "sharing" of copyrighted music and movies. On the other hand, some Chinese P2P companies are attracting venture capital and advertising income. Although China's laws on copyright are similar to those of the U.S., penalties or damage awards are usually very low. Consequently, P2P companies can take the risk of being sued and, even if they lose, treat any resulting damage awards as a cost of doing business.

Screenshot of Tudou video sharing site. Tudou was found liable in one lawsuit against it and ordered to pay RMB 50,000 (U.S. $7100) in May, 2008 (see this article). Apparently (after the lawsuit?)Tudou started partnering with some content companies to offer content legally in return for sharing advertising revenue.

I don't think there's any doubt that P2P is a viable method of distribution for TV shows and other content and, when done illegally as described, certainly quite profitable to the companies facilitating the illegal conduct. If this can be done in a legal manner with content owners (and authors) getting a share of the profits, that'd be a much more equitable arrangement. However, if they can get away with illegal distribution and profit to a greater extent by doing so (by avoiding payment to content owners), there doesn't seem to be much incentive for legal P2P distribution. The article doesn't mention whether any Chinese P2P companies have tried to negotiate deals with content owners, but I why would they if they can make much more money operating illegally without serious adverse consequences even if they are sued? Even though damage awards tend to be very low for copyright infringement in China, it seems the only way to force business to start operating legally is to sue them (just as it has been in the U.S. and elsewhere).

Dr. Ming Wang forwarded me a link to a New York Times article which reports that the Chinese government has announced a plan to institute universal healthcare by 2012.

China Announces Subsidies for Health Care

By EDWARD WONG


BEIJING — China announced Wednesday that it intended to spend $123 billion by 2011 to establish universal health care for the country’s 1.3 billion people. . . Xinhua, the state news agency, said the authorities would “take measures within three years to provide basic medical security to all Chinese in urban and rural areas, improve the quality of medical services and make medical services more accessible and affordable for ordinary people.”

The article indicates that the Chinese government might be doing this, in part, to stumulate its economy by encouraging Chinese to spend more. Since many Chinese have little or no health coverage, they tend to save a large portion of their income in case they need it to cover medical expenses which, although still cheap compared to the U.S., are rising rapidly in China.



Its a bit ironic that China, with a 1.3 billion population and a smaller economy than the United States, is at least aiming for universal healthcare while the U.S. has so far been unable to do so. Of course, the U.S. population are not big savers so the security of universal healthcare isn't likely to result in increased consumer spending as China is hoping for. However, I think there are other very good reasons that the American healthcare system needs substantial reform. Maybe we can follow China's lead on this one.


Or maybe, Americans will just have to start going to China for cheaper medical treatment.

A short article from Variety Asia Online says that the mainland China movie industry had an increase of 27% in box office revenues for 2008 (worth about U.S. $622 million). Chinese films were responsible for slightly more than 60% of that income according to the China Film Bureau .

The biggest grossing film in China last year was Red Cliff, a historically-based epic about the Battle of Red Cliffs in ancient Han Dynasty China. The film made U.S. $45.3 million in China and over U.S. $102 million worldwide. Red Cliff also has the distinction of being the most expensive Asian-produced movie with a budget of around U.S. $80 million.



Other top grossing films were CJ7, Painted Skin, American-produced The Forbidden Kingdom, Kung Fu Dunk, If You are the One and Forever Enthralled.

Interestingly, increasing numbers of Chinese people are going to movie theaters to watch movies even though pirated DVD copies can be easily and cheaply purchased. This is probably due to the fact that as China's economy has grown, more people have disposable income and are willing to pay more to see a movie in a theater for the entertainment experience (going-out, group-oriented activity) rather than watching pirated copies at home.