Proceedings of the 

Second ICSU-UNESCO International Conference on

Electronic Publishing in Science

held in association with CODATA, IFLA and ICSTI
at UNESCO House, Paris 20-23 February 2001

Financial Considerations in Scientific Publishing in Developing Countries:

The Case for the People’s Republic of China

received 10 February 2001

Steven K. Luk, Ph.D, Director, The Chinese University Press
The Chinese University of Hong Kong,
 

INTRODUCTION

Many scientific journals are available on the web. This is particularly true for huge collections of historical information, which can be more conveniently provided via an electronic database available online for reviewing, or that which is ever changing since the speed of delivery is as important as the contents. The issue of pricing for electronic products, just as for printed products with a limited circulation presents a challenge to publishers. The industry is searching for a business model for pricing and discussing standards of peer review and editing, distribution/sales and copyright management.

In this paper, I will try to briefly summarize the present state of electronic publishing of science in the People’s Republic of China, and to explore how Chinese scientific publishers seem to be more successful in resolving the very same issues that confront their Western counterparts. Not being a scientific publisher myself, I owe a great deal of the information to publishers and librarians who I have interviewed [1].

THE CHINA SYNDROME

Before we proceed to discuss electronic publishing, we must recognize the unique characteristics of the media/publishing industry in the People’s Republic of China.
State ownership/management control of the entire media/publishing industry
Under a "socialist country with Chinese characteristics", the Chinese media including all facets of the electronic publishing industry is administered and staffed at various levels by government institutions whose purpose and mission is to promote policies made by the Chinese Communist Party. As such, all publishing houses (about 500) and electronic publishers (50) are numbered and licensed. Each publishing house is allowed to publish a certain number of titles annually, and each manuscript has to be approved prior to publication. In fact, the publishing industry is one of the few areas in the economy that is still within the grip of the government.

In China’s Four Point Modernization Program, scientific education and R&D are given top priority. Given China’s ability to attract overseas capital in recent years, universities and scientific institutions have earned increased funding to buy books and equipment for updating their facilities. This scenario has provided a good base for the electronic publishing industry to flourish in recent years.

Late development in the electronic publishing field
Prior to the digitalization of Chinese characters on a large scale around 1996 (Microsoft Windows 95 did not come out in Chinese until 1996), the computer was seldom used for word-processing. Indeed, Beida Fengzheng, the corporate giant in electronic publishing software, was not established until 1996. The digitalization of Chinese characters, the appearance of the www and the introduction of affordable desktop computers happened at almost the same time – around 1996. Coincidentally, this was also a period of high economic growth and regained political/economic confidence since the Tienanmen incident of June 4, 1989. Thus, there was no better way to build up the basis of scientific education than by deploying increased funding to establish electronic libraries (as many of the traditional libraries have been in sorrowful shape).
China wants an independent scientific community
Scientific publishing in most third world countries is conducted in the English language since the number of copies sold would be too low to be economically sustainable. Furthermore, the English language is the lingua franca of the scientific community in most areas in Asia such as Hong Kong and Taiwan. Owing to China’s large population, or perhaps because of its ideology, it insists on maintaining an independent scientific community. Thus, China has engaged in the active promotion of electronic publishing in the natural sciences in Chinese in the past several years.

On the other hand, there is an active movement by editors and publishers in China to have Chinese journals recognized by mainstream databases Therefore many of the journals are published in English or at least have abstracts in English.

Electronic publishing materials in Chinese have a market outside Mainland China
Libraries with collections on Asia in some scientific research institutions and major universities in the US, UK, Japan and Korea, must acquire research materials in Chinese. It is estimated that as many as eight consortia have been set up to negotiate electronic publishing products with Chinese publishers.
 

China’s Electronic Publishers

There are two tiers of electronic publishers in China, namely, those that produce for the public/educational market, and those that publish for the scientific research community.
 

Electronic publication of computer titles in a market economy

According to the registration records at the News and Publication Administration in Beijing, a sub-cabinet level agency overseeing the country’s published media, among the 136 scientific publishers, only around 50 are licensed to publish electronically. There were 1,800 publications in the scientific field in 1999, most of which in fact were paper-based books on popular science and family medicine.

The so-called "Four Big Electronic Publishers", namely, the Electronic Industry Publishing House, the Heavy Machinery Industry Publishing House, the Tsinghua University Press and the People’s Postal Services Publishing House, have been very active in acquiring rights to computer titles pertaining to software such as Microsoft, Linux, Apple, Cisco, Java, Oracle, Lotus, etc. Indeed, entities affiliated with government institutions such as the Beijing Hope Electronic Press http://www.bhp.com.cn,Wanfeng Database Publishing House, and the typesetting software provider, Beidai Fangzheng, were set up by the government for the development of publishing software in the Chinese operating environment, the promotion of computer education, and the publication of books and electronic products for the popular/professional market. The Year 2000 Publication Catalog for the Beijing Hope Electronic Press, an affiliate of the Academy of Science, was a combination of computer titles from the Microsoft Press, Simon & Schuster and McGraw-Hill. The range of titles included operating manuals, books on database and graphic design and internet literature at all levels as well as testing/certification self study manuals and papers.

Although these publishing houses can easily publish their titles exclusively in an electronic format such as CD-ROM, most of them are paper-based, or are bundled with colorful manuals. According to the company’s senior management, this is due to the rampant piracy pertaining to popular electronic publications in China. Consumers and law enforcement personnel can better distinguish the real from the fake if colorful manuals are attached. There were as many as four different pirated editions of Adobe Photoshop 6.0 at one time in the Province of Sichuan. The Copyright Agency of the News and Publication Administration are working hard to stamp out piracy. Officials there pointed to their recent successes, particularly after 1994 when information leading to a successful conviction can earn as much as RMB300,000 (USD38,760) at a time when the average household income in big cities is around RMB1000 (USD120) monthly. It was reported that eighty production lines for pirating CD-ROMs were confiscated in 1999.
 

Electronic publishing for the scientific community

The largest and perhaps the most comprehensive and serious online publishing project today is the government-funded China Journal Net  administered by the Chinese Academic Journal Electronic Journal Publishing House, which was specifically set up to coordinate this project.

The full text databases of the Chinese Academic Journal (CAJ-CD) cover more than 3,500 scholarly journals in nine disciplines, including Mathematical and Natural Sciences, Engineering, Electronics and Information Science, Agriculture, Medical and Health Sciences, History/Literature, Politics/Law, Social Sciences, and Education. It is reported that 31 issues and 233 volumes of optical discs (totaling 1.5 million pieces of literature) have been published since its initiation in December 1996. Additionally, half a million full-text articles will be added annually. One thousand two hundred major libraries in Hong Kong and the Chinese Mainland have subscribed to this service. According to their plan, most literature collected in the database will have bibliographies in both Chinese and English, and all academic journals will carry abstracts in both languages. Also, more than 200 journals of the social sciences with full English language texts will be added gradually.

Structure: The establishment was approved by the Chinese government and administered by the database/information design and publishing unit in the Tsinghua University, which is regarded as the MIT of China. Other members include the National CD-Rom Research Institute and Tsinghua Tongfeng CD-ROM Manufacturing, Ltd. (which is probably the production arm of the design unit of the University). The Ministry of Education is the sponsoring agency within the government. This is in line with the Communist Party’s call to "strengthen China through science and education".

Organization: The literature is selected, evaluated and edited by the research libraries of the Academy of Science and the Academy of Social Sciences. Since this database is unique in China, they have designed their own platform and software, which are also supplied to journal publishers who have neither the financial resources nor the expertise to digitize their publications.

Distribution: Eighty "mirror substations" are maintained all over the country to deliver some seventy specialized databases of serialized journals to its clients. Subscriptions are available for the entire set or for selected literature pertaining to certain disciplines. They are also available in CD-ROM format at a specified charge.

In a marketing brochure, it is claimed triumphantly that "[the Chinese Academic Journal Electronic Journal Publishing House] has successfully established the China knowledge infrastructure, aiming to create a comprehensive information environment for Chinese scholars".
 

China’s "Business" Model

The issue of how to digitize the contents of scholarly journals through the most economic means for the greatest public good has been in the minds of public policy-makers in academia for several years. The US National Research Council’s Committee on Intellectual Property in the Emerging Information Infrastructure released The Digital Dilemma: Intellectual Property in the Information Age on November 3, 1999 after nearly two years of meetings by "the widely divergent members of the committee." While admitting that the implications for archiving the national output of intellectual property are formidable, the report recommends that "the Congress, the Administration, and combined managements of the top research libraries and archives should lead efforts in developing an archive system that will work as well with digital information as previous systems have worked with hard copy information."

Indeed, the statement seems to be begging the question [2]. It continues:

"The economics of the digital environment entails a redistribution of power away from creators and distributors. The committee introduces the term disintermediation to refer to the new capacity of authors and artists to deal directly with consumers, bypassing the traditional role played by publishers and distributors [3]."

A more concrete proposal has been made by David Stern, Director of Science Libraries and Information Services at Yale University in his article, "Pricing Models: Past, Present, and Future?" It can be summarized as follows:

1. The goal of this cost model is to create a relatively simple, predictable, reviewable flat-rate budget scheme for quality STM items with market value and support for the archiving of non-marketable information items in relation to both local and global needs.

2. Recognizing that not all quality scientific information can be distributed on a commercially successful revenue basis, a sizable amount of information may need to be housed on non-profit servers.

3. A two-tier pricing model is needed. The tier 2 arena will be subsidized by a balance of direct or indirect government, commercial and society dollars.

4. New aggregator roles for research, charge, tracking and validation across publishers will record both costs (hardware and software) and revenues [4].

Is the Chinese business model referenced-above sustainable inside the People’s Republic of China? In a telephone conversation with Mr. Wan Jinkun, Managing Director of the China Journal Net Project, he indicated that the RMB5 million (USD625,000) initial loan from the government for setting up the venture was repaid in 1997, and that current revenues can sustain the ongoing operations. They can borrow additional funds should there be a need to develop new projects.

Indeed, the success of the electronic publishing venture in China owes as much to government funding as to the monopolistic nature of the business. Let us delineate the income/expenditure scenario of the entire enterprise:

Conclusion

It is argued that the business model for electronic commerce has to meet the formula of "fairness, legality and efficiency" in order to induce all parties to cooperate. [5] While the electronic publishing of general titles in China is plagued by wide-spread piracy, the electronic publishing of scientific journals has by and large attained the level of fairness, legality and efficiency as Odlyzko defined. This is because the communist state owns and controls and operates the publishing industry exclusively in both the educational and scientific fields. There is no commercial cost attached. As such, the sole consideration is efficiency and affordability. Also, the publication and distribution of scientific materials in electronic format must be far cheaper in the long run than printed copies, particularly when it is evaluated from the government policy-making perspective. This might well be one of the many "advantages of Socialism" as their daily slogan goes.

What do we gain in this survey of China’s electronic publishing in scientific fields? China and its people are worthy of attention to the outside world; and as such, the sales of its products/services probably can cover the exceedingly low production expenditure, although their publication activities in the scientific fields are still marginal. The unfortunate part is that most of the scientific ideas that are worth publishing are published in the English language and distributed via Western channels. Thus, the scientific publications in China, similar to those of many countries, are of marginal monetary value, unless they are published in English. Obviously, this phenomenon is not limited to publication in the scientific fields. Nevertheless, as scientists are more amenable to electronic formats, the dominance of English in electronic publication in the sciences will continue.
 

References

1.The author is grateful for the information he obtained from many individuals who are working in the electronic publishing field in the People’s Republic of China. He has also received valuable information from Mr. James K.M. Cheng, Librarian of Harvard-Yenching Library, Mr. Karl Lo, Director of International Programs at the Libraries of the University of California, San Diego, and Mr. Leo Ma of the Serials and Electronic Resources Department of the University Library System, The Chinese University of Hong Kong. It goes without saying that the interpretations and the mistakes therefrom belong to the author.

The following papers were read online as posted by the Association of American University Presses on March 30, 2000 under the title "Andrew Odlyzko: Papers on Electronic Publishing and Electronic Commerce".

2.Melinda Koyanis, "The Digital Dilemma: A Summary", Exchange Vol. 2 (winter 2000): 1 and 4.

3. Ibid., 12

4.David Stern, "Pricing Models: Past, Present, and Future", Serials Librarian 36 (1999): 301-319.

5.Andrew Odlyzko, "The Bumpy Road of Electronic Commerce", WebNet 96-World Conference Web Society Proceedings, ed. H. Maurer, ACCE, 1996, pp. 378-389.

address: Hong Kong, Shatin NT, China. Tel. +852 2609 6460, Fax +852 2603 6692,
E-mail: stevenkluk@cuhk.edu.hk