Huayu: Starting from joining the mainstream entertainment industry in 96

Chapter 503, Section 501: Thank you, country, thank you...

In late December 2003, the wind was biting cold in Beijing, but inside the State Administration of Radio, Film and Television building at No. 2 Fuxingmenwai Street, a meeting concerning the future landscape of China's film industry was quietly taking place.

The atmosphere in the meeting room was solemn and serious, a stark contrast to the bleak winter scene outside the window.

Seated around the oval conference table are key figures who will determine the future of China's cultural industry.

This was not a simple symposium, but a "coordinated development seminar" with strategic significance.

The lineup of participants clearly indicates the level and significance of this conference:

Regarding the competent authorities: the main leaders of the State Administration of Radio, Film and Television, the deputy director in charge of film affairs, and the heads of relevant departments are naturally the core.

Furthermore, although the specific names could not be explicitly stated, the important intentions of the propaganda system were conveyed through the leadership of the General Administration and individual attendees. Officials from relevant departments of the Ministry of Culture were also present, discussing policy support and planning for the cultural industry.

Representatives of state-owned capital: Han Sanping, Chairman of China Film Group, led his team to attend. As a strategic investor in Shengying Media and a representative of state-owned capital, China Film Group is not only a shareholder but also a bridge between policy and the market.

Old Han was recently promoted to a permanent position.

A benchmark for private capital: Wang Sheng, chairman of Shengying Media Group, was a special invitee to this conference and was also the core target of being "examined" and "empowered".

In addition, officials at the bureau level from the Ministry of Finance's Cultural Assets Management Office and the National Development and Reform Commission's Cultural Industry Department also attended the meeting, which involved the supervision of state-owned cultural assets, the approval of major cultural industry projects, and funding support.

The core topic of the meeting was how to "use well" and "use correctly" the 57 billion yuan raised by Shengying Media's IPO, and what role Shengying Group would play in the future development of China's cultural industry.

The leader of the State Administration of Radio and Television opened the meeting with a calm and powerful tone: "First of all, congratulations to Shengying Media on its successful listing. This is an important achievement of my country's cultural system reform and marks a key step for private cultural enterprises to take advantage of the capital market to grow bigger and stronger."

The significance of "China's first listed film company" lies not in the amount of money it raised, but in the fact that it explored a path and set a benchmark.

The tone then shifted to the core issue: "Precisely because it is the 'first stock' and a 'benchmark,' it attracts high public attention and carries significant responsibility. The nearly 57 billion yuan raised is unprecedented in the cultural industry."

This money represents the trust that investors place in Shengying, and it also reflects their confidence in the development of the national cultural industry.

Ensuring that this money is truly used to promote industrial upgrading, foster content creation, and strengthen the industrial base, rather than being diverted from the real economy or used for disorderly expansion, requires joint planning, strengthened guidance, and oversight.

The leader's gaze swept over everyone present, finally landing on Wang Sheng: "Comrade Wang Sheng, Shengying has emerged from the tide of marketization, and its achievements are evident to all."

The purpose of today's meeting is to hear your thoughts and discuss together how to make the best use of this money, to make Shengying's "cake" bigger and more substantial, and to truly enable it to play a leading role as a key enterprise.

Wang Sheng knew that this moment was crucial. Sitting in front of him were not only regulators, but also the "national team" that controlled policy resources and could provide key support for him to "realize" his dream market value of 40 billion yuan.

While this 57 billion yuan fund appears to be under his control, in reality, every major investment must align with the national cultural industry strategy and be subject to oversight from state-owned shareholders (China Film Group), the China Securities Regulatory Commission, and the Ministry of Finance regarding the use of the raised funds.

He composed himself, spoke calmly, his tone respectful yet confident: "Thank you for your trust and guidance, leaders. Shengying Media's success today is inseparable from the opportunities provided by the national cultural system reform, the continued care and support from leaders at all levels, and the mentorship of senior figures like Chairman Han."

My team and I have always been keenly aware that Shengying's temporary lead and high valuation in the capital market are opportunities bestowed by the times, and that the wave of the country's vigorous development of the cultural industry has propelled us to this position.

He first clarified his understanding of his political stance and the source of his wealth, which were the foundation for his livelihood.

Next, he presented a carefully prepared plan for the use of funds:

"Regarding the use of the raised funds, our initial plan is to invest mainly in three areas, aiming to solidify the foundation and lay the groundwork for the future. We will never be overly ambitious, nor will we deviate from the real economy for speculative purposes."

"First, approximately 20 billion yuan will be used for upgrading the film industry's infrastructure and technology. Among these, the focus is on cooperating with China Film Group to jointly plan and construct a world-class digital film shooting and post-production base in the suburbs of Beijing or other suitable areas."

This is not only to serve Shengying's own projects, but also to create an open platform to attract high-quality production resources from home and abroad and improve the overall industrialization level of Chinese films.

At the same time, we will increase investment in 'Shengying Visual Effects,' introduce internationally advanced technologies and training systems, and utilize the talent cultivated in our collaboration with Disney to truly master the core technologies of the digital film era.

This part involves significant investment and a long payback period, but it is of great strategic importance, demonstrating to leaders our commitment to a long-term perspective.

"Secondly, approximately 25 billion yuan will be used for the modernization and strategic expansion of cinema terminals."

While cinema construction is progressing rapidly, the quality varies greatly, especially the proportion of digital screens, which remains very low.

The funds will be primarily used to popularize digital projection systems in cinemas under the China Film Grand Cinema Circuit and to build high-standard multiplex cinemas in emerging cities and economically developed county-level areas.

The goal is to increase the proportion of digital screens in its portfolio to over 60% within the next five years, further consolidating its channel advantages and driving the penetration of film consumption into lower-tier cities.

Cinemas are a source of cash flow and an important platform for serving the people and promoting cultural benefits. This investment aligns with policy encouragement.

"Third, approximately 12 billion yuan will be used for film and television content production and copyright reserves." Wang Sheng paused, needing to elaborate on this point more subtly. "Content creation is fundamental, but we realize that relying entirely on our own funds for production is risky and the efficiency of capital utilization needs improvement. Therefore, in the content sector, we plan to change our approach and leverage the platform advantages and leverage of a listed company more."

He explained in detail: "Part of this funding will be used for the development of Shengying's core IPs, such as the 'Night at the Museum' series and fantasy blockbusters with Chinese cultural characteristics, to ensure the continuous production of top-notch content."

More importantly, we will join forces with China Film Group and other state-owned film studios to launch the 'China Film and Television Content Innovation Fund'.

Shengying, as a cornerstone investor, contributed a portion of the raised funds while also attracting participation from social capital and local cultural tourism investment platforms. The fund focuses on investing in various film and television projects with market potential and aligned with mainstream values, particularly supporting young directors and original screenplays.

He glanced at Han Sanping and continued, "Through the fund model, we can leverage more social resources, diversify investment risks, and, more importantly, share a portion of the pie with more industry participants, especially our sister companies within the state-owned system, forming a community of shared interests to jointly stabilize the market and promote creative output. This also helps Shengying optimize its capital structure and focus on the development and control of core projects."

This proposal cleverly combines "sharing the cake" with "making the cake," addressing potential "monopoly" concerns while demonstrating a cooperative and win-win approach, aligning with the nation's expectation that leading enterprises will drive the common development of the industry.

The leader from the Ministry of Culture nodded in approval: "This is a very good idea. The development of the cultural industry cannot rely on just one or two companies working alone; it requires building a healthy industrial ecosystem. Fund-based operation and professional management are conducive to the optimal allocation of resources."

"..."

……

The discussion then shifted to a more macro level—Sheng Ying's role and Wang Sheng's "loyalty".

A leader from the publicity system spoke calmly yet with great weight: "Chairman Wang Sheng, Shengying's success, especially its commercial success, has been witnessed both domestically and internationally."

We also took note of your statement in Time magazine. The concept of a 'connector' is quite novel.

I'd like to hear your more in-depth thoughts on how you view the value of the film industry within the broader context of my country's cultural industry.
And what responsibilities should Shengying, as a benchmark for private enterprises, shoulder in the future?

This question gets straight to the heart of the matter.

In terms of output value alone, the film industry in China in 2003 was indeed "worthless" compared to traditional industries such as real estate, manufacturing, and energy, with the total annual box office nationwide only reaching a little over 3 billion RMB.

However, its true value has never lay in its contribution to GDP.

Wang Sheng took a deep breath, knowing this was a crucial moment to make his statement: "Distinguished leaders, I believe that the core value of the film industry lies in its irreplaceable cultural influence and ideological attributes."

It is one of the most powerful mediums for storytelling, character building, and value transmission. In the context of globalization, film is even more of a strategic frontier for cultural export and establishing a national image.

"What Shengying Media has done in the past few years, whether it is 'Night at the Museum' which tells Chinese elements in a world language and shows cultural confidence;
Or commercial genre films like "Kung Fu Hustle" and "Lost in Thailand" satisfy the public's entertainment needs and convey positive values;

Even the deep collaboration with Hollywood is all for one goal: to strengthen itself in market competition, accumulate capital, technology, and experience, and ultimately, to more effectively promote Chinese culture and participate in global cultural competition.

He reiterated: "I always remember that Shengying is a Chinese company, and my roots are in China."

Engaging with Hollywood capital is a necessary process of "learning from the West to subdue the West," aimed at learning its industrial system and global perspective, and ultimately at building our own globally competitive cultural dissemination power.

In my interview with Time magazine, I clearly stated that the Chinese market is a giant ship, and in the future it will be an important source of content production and a partner, which in itself is a manifestation of cultural confidence.

"I assure you all," Wang Sheng said firmly, "that Shengying Media and I personally will always maintain a high degree of consistency with the national cultural development strategy. Our market position and capital advantages will certainly serve the overall goal of enhancing the country's cultural soft power. Film is the 'weapon' and 'battleground' we have chosen."

Han Sanping added at the opportune moment, endorsing Wang Sheng: "Wang Sheng and his team's sensitivity to the market, their ability to control content, and their awareness of combining commercial success with national strategy are rare."

As a shareholder and partner, China Film Group will earnestly fulfill its supervisory and guidance responsibilities to ensure the safe and efficient use of raised funds and jointly promote the implementation of key projects.

"..."

……

The meeting lasted for nearly three hours.

Finally, the leaders of the State Administration of Radio and Television summarized the proceedings and made the final decision:
"Today's meeting was very fruitful. Comrade Wang Sheng's planning ideas are clear and in line with the development laws of the cultural industry and the strategic direction of the country."

Shengying Media should cherish the current favorable situation, make good use of the raised funds, and focus its efforts on "strengthening the industrial foundation, optimizing channel layout, and innovating content production mechanisms."

"We must deeply understand the ideological attributes and special importance of the film industry, adhere to putting social benefits first, and achieve a balance between social and economic benefits."

We hope that Shengying can truly play a leading role, not only developing well itself but also driving the overall improvement of the industry, telling China's story well and spreading China's voice effectively in the process of "going global."

"Relevant departments will actively support Shengying's project advancement and model innovation within the scope of regulations. Specific funding usage plans will be submitted for approval according to procedures and subject to supervision. We hope you can deliver results that satisfy the people."

(End of this chapter)