EDITOR'S note:

This is the first of a two-part article about China's push to make culture a "pillar" industry. But can and should culture be packaged and sold? Will the deal to let in more Hollywood movies stoke the economic growth engine?

IMAGINE what the Chinese economy will look like three years from now - will it be any different? Even the boldest economists may shy from making predictions. China's economy is simply too gigantic and complex, and thus it's challenging to guess how it will evolve.

On second thought, forecasting doesn't seem that difficult, considering the structural sclerosis that has long beset the country's economy. It is highly reliant on certain sectors, most notably the property market in the past few years.

However, with the industry now going downhill and the government unusually firm in its clampdown on sky-high home prices - local governments' major source of revenues -the real estate blues seem here to stay. Many are wondering which sector will supplant property as the new money spinner.

The most likely candidates, some pundits argue, are green energies and nanotechnology. But they take years, if not decades, to mature. Besides, they represent a fairly small portion of the overall economy.

The great guessing game of China's next growth engine was officially ended by a host of high-profile government conferences that unveiled the future economic locomotive: the cultural industry.

First it was the 6th Plenum of the Party's Central Committee held last year, which focused on reform of the cultural sector, such as encouraging mergers and acquisitions of media and publishing groups.

Then came the concrete plan announced last week that details the reform package during the period of the Twelfth Five-Year Plan (2011-2015), and holds up culture as the new "pillar industry" for the very first time. Previously it was real estate.

By global standards, a "pillar industry" accounts for more than 5 percent of a nation's GDP. China's cultural market contributed 3 percent to the overall economy last year. And amid the housing miseries, China's economic planners have realized that land sales are unsustainable and can have pernicious effects.

Strategic transition

Since all land is state-owned in China, and houses sit on it for a 70-year lease (for commercial properties the lease lasts 50 years), selling out all the land now will leave nothing for the future generations to resell for a long time. To keep the economy growing, the leadership has pinned its hopes on culture, something that can prosper on its own terms.

This strategic transition is also inspired by the success of other countries, in particular the United States.

America's cultural industry is worth nearly a tenth of its GDP, second only to the arms industry, and employs 17 million people. Its success is not just in economic terms, but in cultural terms as well. American pop culture producers, such as Disney, Hollywood and Broadway, have reached the furthest corners of the globe. In its eagerness to spread its culture overseas and strengthen its soft power, China is keen on emulating the American recipe for success.

Chinese often say knowledge is productivity, but that motto was perhaps amended to "culture is productivity" when the immensely popular animated film "Kung Fu Panda" (2008), produced by DreamWorks, dropped a bombshell in China's cultural circles.

Why, many asked, are Westerners cashing in on Chinese culture, not us? Most pundits, except a few nationalist rabble rousers, were overwhelmed less by the charms of the roly-poly, funny panda than by US filmmakers' uncanny ability to package culture, even if it's others', for sale and to win huge profits.

Spending big

This reflection has sparked a call to develop China's own cultural industry. Official support quickly followed in the form of billions of yuan spent on both building cultural infrastructure, like state-of-the-art art centers, music halls, theaters, and on sponsoring large-scale cultural festivals and making admission to museums free.

These measures are all laudable for they meet people's needs for more cultural products and recreation. But is spending big a sure bet to nurture China's homegrown cultural talent? Not necessarily.

Many observers are not so upbeat about that prospect, noting a host of barriers, such as ideological constraints, censorship and an education system that stifles creativity, to name but a few.

Sometimes it may help to stimulate the growth of the domestic cultural market through opening the door wider to foreign competitors, and that appears to be the thinking of Chinese cultural authorities when they signed a memorandum of understanding on film imports with their American counterparts on February 18 in Los Angeles.

According to the memorandum, China will open its box office to 14 more US movies, on top of the current 20 every year, with an expected increase of their takings from 13 percent to 25 percent.

This deal is probably hailed in the US, but in China it has generated mixed feelings. Cinemas of course salute the move, as they stand to profit even more handsomely. On the contrary, quite a few domestic producers and directors are crying wolf, fearful that an influx of American films will further steal business from local movies and add to their financial woes.

Such worries are not entirely misplaced, but they appear exaggerated, at least when we see the benefits of letting in more "wolves."

The domestic film business has witnessed a boom these years, but its output is far from satisfactory. Chinese entries seldom capture any weighty prizes in major film festivals and some films are so vulgar that they are tantamount to visual pollution.

So the import of more American movies may not be that devastating to the indigenous film industry, some say, as it will weed out potboilers, cultural trash and leave real good works in place. America indeed has a lot to offer China in tapping the cultural industry.

To be continued tomorrow