The Underground Publishing Industry in China

In a rapidly evolving cosmopolitan city like Hong Kong, there is always nostalgia for traditional venues that are being displaced in the name of progress.  Some recent examples are a traditional sidewalk food stall, a custard tart shop and a first-floor bookstore.

You may know what a second-hand bookstore is.  But what in the world is a first-floor bookstore?  Along Sai Yeung Choi Street in the Mongkok district, there are a number of first-floor bookstores.  They are not at the street-level because the rents would be astronomical.  To find the bookstores, you have to look for their signs from the street, walk into a residential building and up the stairs to get to the first floor.  Typically, the bookstore occupies only a small space of two or three hundred square feet.  Such stores have been a Hong Kong tradition for decades.  Recently, with the recovery of the overall Hong Kong economy, rents have gone up and so the first-floor bookstores are becoming second-floor or even higher-floor bookstores as they make way for other more profitable retail/service businesses.

At the same time, these bookstores are also subjected to the pressure from the mega-bookstores such as PageOne.  Due to space limitations, there is no way for the first-floor bookstores to carry an inventory that can match the mega-stores in size.  They can only offer idiosyncrasiess and intimacy.  There is also another odd intramural competition within the first-floor bookstores, as there are some that specialized in importing the books from mainland China into Hong Kong.  The significance of the imports is that those books are priced much lower.  A Hong Kong- or Taiwan-published book may cost HK$100, but its mainland Chinese edition may cost a fraction thereof.  For the true book aficionado, there is an even cheaper way of acquiring books.  For example, if your monthly book budget is HK$1,000, you can spend it in Hong Kong or else you can hop on a train across the border to Shenzhen and buy ten times as many books.  What will you do?

At this point, people are tempted to point out what seems to be the obvious: But you can't buy all the books you want in China!  They banned all the interesting but controversial books, don't they?  You will never be able to buy the Chinese Peasant Study, or Zong Fengmin's collected thoughts of Zhao Ziyang, or the private life of Mao Zedong according to his personal doctor, or F*L*G's Nine Criticisms of the Chinese Communist Party, or the sexually explicit Serve The People.


Only people who don't actually buy or read books in China would think 'banning' = 'no access.'

The following is a translation of a section of an article in the June 2005 issue of Open magazine (in Hong Kong).  This is the first of a multi-part series titled "The Secret Behind China's Ten Most Profitable Industries."  This article covers the top three industries: real estate, education and underground publishing.  I am going to stick to underground publishing.

In the busy Sanlihe strict of Beijing, there are a number of national government offices.  It is also adjacent to the headquarters of the People's Liberation Army.  This can be said to be the heart of the Chinese government.  Yet, there is a little side street full of various underground bookshops which sell all kinds of banned books, pirated books and pornographic books and past issues of magazines such as Open, Cheng Ming and The Spring of China.  Everything can be had.  They carry pirated copies of books published in Hong Kong and Taiwan and even books banned by the Chinese government.  "Friendship and Enmity in Zhonghanhai", "Love Affairs in the Red Capital", "Zhou Enlai in his Latter Years", "How the Red Sun Rose", "The Truth About June 4", "A Heavy-Hearted Look Back", and even Adolf Hitler's "Mein Kampf" and Chiang Kai-shek's "The Fate of China" can all be bought cheaply.  The "Recollections of Mao Zedong's Private Doctor" was once very popular, but nowadays "The Past Is Not Like Smoke" is popular.  Also, the series of sexually explicit books by female Chinese writers such as Mu Zimei as well as the sexually explicit "Serve The People" which debased the image of Mao Zedong.  These are all available from the underground bookshops.

These books are mostly of poor print quality.  There are many spelling mistakes; words, sentences and even whole pages are missing; or sentences and pages appear in the wrong places.  A small number are typeset by computer, and match the original copies in quality.  Yet, they are all very cheap and therefore popular with the people.  A proper copy of "Zhou Enlai in his Latter Years" costs more than HK$100 in Hong Kong, but it can be bought for 20 RMB at the underground bookshops.  The official copy of "The Secret War of China" sells for 45 RMB in China, but the pirated copy costs only 10 RMB.  An owner of an underground bookstore boasted that any Hong Kong, Taiwan or banned Chinese book can be delivered in three days' time.

There are more than a dozen underground book markets like Sanlihe in the city of Beijing alone.  One can imagine what happens in the other cities that are even further away from the view of the central government.  At the Lowu border entry point in Shenzhen, book hawkers walk around the street carrying bags of banned books.  In the residential areas of Shenzhen, mobile book carts carry books like "The Chinese Peasant Study", "The Past Is Not Like Smoke" and "The Secret War of China."  At the moment, there is a reverse flow of banned books, as smart Hong Kong residents go up to Shenzhen to pay one-tenth the price to purchase banned books that were originally published in Hong Kong and Taiwan.

The growth of the underground book markets is due to the existence of a complete underground publishing system.  According to an underground publisher in Beijing, he has a publishing outfit that uses computer typesetting.  He has the means to proof-read, design the packaging and typeset.  He can publishing any banned or pornographic book, including Epoch Times' "Nine Criticisms of the Chinese Communist Party."  Furthermore, he can determine the appropriate print quantity based upon the content of the book, and he can guarantee that he can deliver up to 100,000 copies to more than 2,600 sales points around the country, all within three days.

This underground publisher can do that because there are more than 4,000 underground publishing factories located in poor rural villages around the country.  These factories have a clearly defined organizational structure and division of labor.  A book is distributed among several factories, with each factory being responsible for printing just a few pages.  The binding is done at another specialized factory.  The distribution goes through other specialized channels.  2,600 sales points, 4,000 printing factories and more than 100 underground publishers form an independent underground publishing empire, nicknamed "The Other Money-Printing House" of China.


In China, the ratio of official-to-pirated books is 40%:60%.  There are more pirated copies than official copies out there.  At the Foreign Language Department at a certain university in Wuhan, the students' University English textbook fell apart shortly after they began to use it.  It turned out that those books were lousy pirated copies.  These pirated copies have low costs, since there are no loyalty payments, no fixed costs and no advances.  As cheap as these books are, only 20% of the price goes to printing costs, 25% to distribution and 33% to retailing, with 22% left for pure profit.

The proliferation of pirated copies is due to the underground publishers getting in league with the official publishers and paying bribes and kickbacks to obtain the master originals (either electronic manuscripts or printing plates).  Also, the underground book markets are left unmolested, either due to the inadequacy of the laws or indifference to enforcing any laws.  Finally, the official copies are priced too high, and the pirated copies are therefore economically attractive to people.  [blogger's comment: And we can add that the underground industry publishes books that are not officially available]


Addendum #1: I saw the original unedited version of Serve The People on sale in a Hong Kong bookstore last week for HK$73.  I am sure that it is available in China by now for a fraction of the cost.

Addendum #2: I just read that the Chinese government is requiring all visitors to fill out Customs Declaration forms, which include questions about whether you are bringing in printed materials that might endanger the social stability of China (meaning, political and pornographic materials).  I have previously noted that the bookstores at the Hong Kong International Airport carried an inordinately large proportion of banned books (such as The Chinese Peasant Study as well as the Mirror books on Chinese political scandals) and this was undoubtedly due to their marketing departments identifying that these books sell well to Chinese visitors.  Stopping visitors from bringing the books in is very much missing the point, because those books are easily available in the underground book markets at much cheaper prices.

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