Loans for culture industry rise

Bank of Beijing Co announced on Saturday that it had approved loans of more than 30 billion yuan ($4.76 billion) for Beijing's nearly 700 companies involved in the culture sector by the end of last year, which demonstrates that the country's financial institutions are lending more support to the culture industry.

"The culture sector contributed 5 percent last year to Beijing's GDP, which indicates that the sector has already become a pillar industry (for its economy)," Yan Bingzhu, chairman of the board of Bank of Beijing, said in a meeting yesterday, adding that the bank will try to boost financing for the country's culture industry.

Yan also suggested that the regulators should relax credit policies for companies in the culture industry, considering "the high risks in the culture industry".

The industry covers numerous different areas, including music, literature, performances, film and TV production, publishing, exhibitions, as well as newer additions like the Internet and telecommunications.

"Generally speaking, the culture industry is becoming a new propeller of the country's economic development, proven by the volume of financial support and official policy announcements," Li Daxiao, director of the research institute at Shenzhen-based Yingda Securities, told the Global Times yesterday.

The country's third-largest lender Bank of China (BOC) announced yesterday that it will provide an unspecified amount of financial support for the Hong Kong-based Phoenix Satellite Television Holdings, as a way to foster the development of the country's culture industry.

BOC said it had granted loans of more than 32 billion yuan to over 1,700 culture industry companies nationwide.

And China Development Bank disclosed Thursday that it had extended 120.4 billion yuan in loans to culture-related companies by the end of last year, projecting that the bank's total loans for the culture sector will amount to 200 billion yuan between 2011 and 2015, including last year's 38.1 billion yuan.

However, as to the financial institutions' massive lending, Li warned that as the culture industry is still in its initial development period and most of the culture-related companies are still small-scale without a mature business model, "high financial risks exist in the sector."

"Some of the major players in the culture industry are State-owned companies, which are not very efficiently run," Chen Shaofeng, deputy dean of the Institute for Cultural Industries at Peking University, told the Global Times yesterday.

"But of course, business opportunities in the sector are huge," Li at the Yingda Securities.

More than 50 culture-related companies were listed in the domestic market by December last year. And the Ministry of Culture said Thursday that it will support more than 30 culture-related companies to go public by the end of 2015.

According to the latest statistics released by the National Bureau of Statistics in September last year, the total output of the culture industry in China in 2010 reached more than 1.1 trillion yuan, accounting for 2.75 percent of the country's GDP.