Gong Pengcheng Dialogue with Overseas Scholars No. 7: In the postmodern context, human society ruled by technology can only gain the power of cultural rebirth by strengthening dialogue and reconstructing the ethics of communication. This is not whose theory, but an activity that everyone should practice. Mr. Gong Pengcheng traveled the world and presided over the "World Sinology Research Center". We will successively launch a series of articles on "Gong Pengcheng Dialogue with Overseas Scholars" and invite him to talk to some meaningful souls in the academic world. The scope is not limited to sinology, but involves a variety of disciplines. In order to hope that the water of the deep mountains and long valleys will come out on all sides.
prof brian sturgess
Prof Brian Sturgess is chief economist at world economics and is currently a professor of economics at the University of Buckingham in the United Kingdom.
He has taught economics at several universities and has published extensively in books, academic journals and newspapers on the economics of advertising, media and sports, as well as economic data issues.
He has worked as an investment analyst and consultant for commercial banks and media companies for nearly 20 years, including BBC, The Daily Telegraph Group, World Advertising Research Centre, Barclays Bank, etc., where he studies the financing and economic issues of media companies.
He has also been a sports, cultural and broadcast advisor to the European Commission and an economic adviser to the Chilean Football Federation. His current research interests are economic data, banking and financial stability, international trade, emerging markets, Islamic economics, and renewable energy economics.
Gong Pengcheng: Hello, there are many economists, but you are particularly curious. For example, you are very concerned about the financing and economic issues of media companies, working as an investment analyst in a media company for many years, and as a sports, cultural and broadcast consultant to the European Commission, etc., and are economists with special knowledge of culture and media. But you know, China's cultural circles are generally estranged from the banking, finance, and international trade sectors, and economists pay less attention to the work and research you do. So I would like to ask you to talk a little bit more about this.
Brian Sturges: Hello, Professor Gong. My interest in media and the economics of cultural industries began decades ago. In the 1980s, I was an industrial economist at the University of Nottingham, but I taught a course on marketing economics, which got me interested in the impact of advertising campaigns on the market. Does this involve questions such as whether advertising is a competitive tool, or is it more a feature of an oligopolistic industry associated with market power and higher prices and profits? So I published a book on the economics of advertising in 1981, deepening my connection with the advertising industry and publishing numerous articles in academic journals and the media.
The importance of advertising revenue, as the main source of revenue for media companies, naturally expanded my research interest into this industry. The industry I studied was largely overlooked by many economists, so I was hired as an investment analyst to valuate a large number of advertising agencies, television, radio and publishing companies listed on the stock exchanges in London, New York and Paris. There is a clear link – due to macroeconomic growth, increased advertising spending, and deregulation of the media industry, the value of media companies and the value of programming has increased, including other rights to cultural events such as sports.
After setting up my own company, I spent nearly a decade analyzing the global sports industry. This company provides business news to players in the industry and until 2008 I consulted clients, clubs, associations and broadcasters in the football markets of England and Scotland, the United States, Turkey, Mexico, South Africa, Nigeria, Egypt, China and Chile.
my interest in the economics of media and the cultural industries began several decades ago. i was an industrial economist at the university of nottingham in the 1980s, but i taught a course on the economics of marketing, which led to an interest in the impact of advertising activity on markets. this involved questions such as was advertising a competitive tool or was it more a feature of oligopolistic industries and associated with market power and higher prices and profits? this led to a book on the economics of advertising, published in 1981 which deepened my connections with the advertising industry and lead to the publication of many articles in academic journals and in the press.
the importance of advertising revenues as a major source of income for media companies naturally expanded my research interests into this industry. my research into an industry, which was largely neglected by many economists, lead to my recruitment as an investment analyst to value the significant number of advertising agencies, television, radio and publishing companies that were listed on the stock exchanges of london, new york and paris. there was a clear link – rising advertising expenditure, due to macroeconomic economic growth, and a deregulated media industry, was driving the value of media companies and the value of programme production and other rights to cultural events such as sport.
i then spent nearly a decade analysing the sports industry globally after setting up my own company. this company provided business news to the participants in the sector and i carried out consulting work for clients, clubs, associations, and broadcasters in the football markets of england and scotland, the usa, turkey, mexico, south africa, nigeria, egypt, china and chile until 2008.
Pengcheng Gong: What are the emerging markets you are interested in? Media companies are undergoing a drastic shift, are new media bringing emerging markets?
Brian Sturgis: Later in my tenure as an investment analyst, I saw the importance of the media and cultural industries as well as sports as complementary to economic development, because the ability of businesses to effectively reach audiences and potential customers is an important factor in developing the domestic market. Although the media and cultural industries are relatively important in the economy, they are ignored by development economists. I developed a model of the evolutionary growth of media and cultural industries that align with GDP per capita to analyze whether a country's broadcasting and advertising industries are relatively underdeveloped. This can diagnose what factors – institutional, political, social or economic – are holding back the industry. At Barings Bank, I studied some emerging markets in Asia, Africa, and Latin America, with the primary goal of identifying companies that might benefit from the desired path of the industry's future growth.
The media industry in many emerging markets has developed considerably in recent decades, but attention to it remains relatively lacking, often for political reasons. Africa's most developed media industry is probably in South Africa, although Nigeria is growing. Measurement is also a problem. In many emerging markets, the importance of media, telecommunications and cultural industries is often overlooked because national statistical offices lack data and have no incentive to collect data. In 2008, when I took over as Editor-in-Chief of World Economics, I focused on the quality of economic data across emerging markets — GDP, price indices, international trade, etc. – but I was increasingly focused on The large economies of Africa and India and China.
during my later period as an investment analyst, i saw the importance of media and cultural industries and sport as complementary to economic development since the ability of firms to reach audiences and potential customers efficiently is an important element of growing domestic markets. the media and cultural industries are relatively neglected by development economists despite their relative significance in the economy and i developed models of their evolutionary growth in line with gdp per capita which would allow a country to be analysed to see whether the broadcasting and advertising industries in a country were relatively underdeveloped. this permitted a diagnosis of what factors – institutional, political, social or economic – were hindering the sector’s development. at ing barings i studied a number of emerging markets in asia, africa and latin america, with the main objective of identifying companies that might benefit from the anticipated path of the sector’s future development.
the media sector has developed considerably in recent decades in many emerging markets, but there is still a relative lack of attention paid to it, often for political reasons. probably the most developed media industry in africa has been in south africa, although nigeria is experiencing growth. one problem is measurement. the importance of media, telecommunications and the cultural industries are often neglected in many emerging markets because national statistics offices lack data and are not incentivised to collect it. in 2008, i took over the role of managing editor of world economics and i have pushed the focus of the journal into an interest in the quality of economic data – gdp, price indices, international trade etc. across the emerging markets, but i have increasingly focused on africa and on the large economies of india and china.
Gong Pengcheng: Islamic economics has been a hot topic for some time, what has been the recent development? Does its religious ethics have a great influence on economic activity, is there an advantage?
Brian Sturgis: My first interest in Islamic economics and Finance was in 2014, when I did some consultancy work for the Islamic Development Bank in Saudi Arabia. I was asked to write a major report within 6 months, analysing its structure, history and the scope of work on development in the Islamic world since its inception in the mid-1970s. This means that I must be familiar with the main principles of Islamic finance – the ethical basis for conducting daily and large financial transactions and investments in a shariah-compliant manner. Islam promotes markets, capitalist investment, and profit sharing because, after all, Muhammad was originally a businessman. The ethical foundations of Islamic finance allow for market transactions and the accumulation of wealth, but emphasize that there should be fairness, benevolence, and charity in business practices.
There is not much evidence in behavioral studies on how Islamic finance and rules change economic behavior. However, there is some evidence that the existence of islamic banking, which is morally recognized by religious authorities, has mined money for savings and investments. There are also some advantages in providing additional financing for international trade, while traditional banks have significant deficiencies in this regard. There is also some evidence that the growth of the sukuk market has had a positive impact on economic growth and the public finances of some governments. Finally, there are drawbacks, namely that scholars tend to disagree on Shariah interpretations of many financial products, which can inhibit innovation in financial products because of higher transaction costs.
i first became interested in islamic economics and islamic finance in 2014 when i undertake some consulting work for the islamic development bank in saudi arabia. i was asked to write major report in six months analysing its structure, its history and the scope of its development work in the islamic world since its foundation in the mid-1970s. this meant i had to familiarise myself with the main principles of islamic finance - the ethical underpinning of carrying out every day and large financial transactions and investments in a way that was compatible with the shar’ia. islam has a presumption in favour of markets and capitalist investment and profit sharing since after all mohammed was originally a merchant. the ethical underpinning of islamic finance permits market transactions and the accumulation of wealth, but stresses that there should be fairness, mercy and charity in commercial behaviour.
there is not much evidence from behavioural studies about how islamic finance and rules, changes economic actions. there is some evidence, however, that the existence of ethically sanctioned islamic banking practices by religious authorities, has tapped into funds for savings and investment. there are also some advantages in terms of providing an additional supply of finance for international trade, an area where there are large deficiencies offered by conventional banks. there is also some evidence that the growth in the sukuk bond market has had a positive effect on economic growth and the public finances of some governments. finally, there are however disadvantages in that often there is disagreement among scholars about shar’ia interpretations of many financial products which can inhibit innovation in financial products since transaction costs are higher.
Gong Pengcheng: From the perspective of big data, what is the global financial stability situation after the epidemic?
Brian Sturgis: The pandemic has created problems with the collection of economic data and, unfortunately, has created any incentive for governments to manipulate health and economic statistics.
Speaking of financial stability, in the short term, i.e. over the next two to three years, the pandemic has led to a massive increase in government debt, leading to increased private sector liquidity in parts of the world – the US, the UK and Europe – while consumer spending has been subdued. The problem with stability is that the relationship between supply constraints and suppressed demand is very tight, leading to inflation, and that raising taxes and interest rates could stifle growth and lead to bankruptcy. These dangers can arise when governments and central banks take routine macroeconomic remedies for unconventional problems.
In the medium term, the factors that threaten global financial stability come from the scale, value, and financing of the investments used to transform the world's response to the threat of climate change, which governments use to meet their commitments to combat climate change. Before the outbreak, some central banks were already concerned about the impact of climate change on financial stability. Mark Carney, former president of the Bank of England, has played a global role in raising awareness of the issue.
The pandemic and its aftermath mean that central banks have had to shift their focus to supporting economic activity and the inflation consequences of quantitative easing and accommodative monetary policy.
the epidemic has caused problems in the collection of economic data and has produced, unfortunately, incentives by any governments to manipulate health and economic statistics.
turning to financial stability, in the short-term, the next two to three years, the pandemic has led to a large increase in government debt and consequently private sector liquidity across parts of the world – the usa, the uk and europe while at the same time consumption expenditure has been supressed. the problem for stability is that there is a knife edge between supply constraints and supressed demand leading to inflation and the dangers that tax rises and interest rate rises could stifle growth and cause bankruptcies. these dangers might arise as governments and central banks undertake conventional macroeconomic economic remedies to what is an unconventional problem. the medium-term threat to global financial stability are the scale, value and financing of the investments needed to transform the world to meet the commitments made by governments to respond to the threats of climate change. prior to the pandemic a number of central banks were become concerned about the impact of climate change on financial stability. mark carney, the former governor of the bank of england, has played a global role raising awareness about this problem. the pandemic and its aftermath have meant that central banks have had to switch emphasis to supporting economic activity and the inflationary consequences of quantitative easing and loose monetary policy.
Gong Pengcheng: Thank you. I would also like to ask you, what do you think of China's cultural industry?
Brian Sturgis: In terms of The Chinese culture field, I was impressed by the rapid growth of the Chinese film industry, which I believe has a global box office share of about 25%, which is the second largest film industry in the world. Obviously, this growth has been achieved with the growth of Chinese per capita GDP and consumer spending, but it has been achieved by promoting public and private investment in film production and distribution. The development of chain theaters such as Wanda Cinema Line and Guangdong Dadi Digital Cinema is also impressive. I've noticed that the film industry has evolved from art genre works by directors like Chen Kaige and Zhang Yimou's early films that received a lot of praise in the West to more popular films and blockbusters spanning many genres, including large-budget historical works, science fiction, and animation. I think global interest in Chinese films will grow as a result of the buying policies of internet publishers like Netflix, which have acquired the rights to The Wandering Earth and other films.
in terms of the chinese cultural sector, i have been impressed by the rapid growth of the chinese film industry which i believe with a global box office share of around 25% is the second largest in the world. obviously, this growth has followed the growth in chinese gdp per capita and consumer spending, but it has been enabled by facilitating public as well as private investments in film making and distribution. the growth of cinema chains such as wanda cinema line and guangdong dadi digital cinemas has also been impressive. i note that the film sector has graduated from art type productions by directors such as chen kaige and the earlier films of zhang yimou which gained much acclaim in the west, to more popular films and blockbusters across a number of genre including big budget historical productions, science fiction and animation. i think there will be a growth in interest in chinese movies as a result of the buying policy of internet distributors such as netflix who acquired the rights to the wandering earth and other films.
Gong Pengcheng
Gong Pengcheng, born in Taipei in 1956, ph.D. of National Taiwan Normal University, is a famous contemporary scholar and thinker. More than one hundred and fifty books have been published.
It has universities, publishing houses, magazines, colleges, etc., and plans urban construction, theme parks and other places. Lectures are given all over the world. He has also held calligraphy exhibitions in Beijing, Shanghai, Hangzhou, Taipei, Paris, Japan, Macao and other places. He is currently the Chairman of the Gong Pengcheng Foundation.