Feature

Asia: China in your hand

The largest Chinese-language media group outside China has Western audiences in its sights.

Earlier this year, three little-known publishers captured the imagination of Sinophiles when they merged to form the largest Chinese-language media group outside China.

A complicated reverse takeover saw Malaysia's Sin Chew Media and Nanyang Press Holdings join forces with Hong Kong's Ming Pao Enterprises.

The deal, masterminded by Tiong Hiew King, a billionaire logging merchant from Borneo, created a US$400 million company with magazines, newspapers and websites in the US, Canada, Australia, Indonesia, Cambodia and Myanmar, as well as Hong Kong and Malaysia.

The plan is to launch its flagship titles in every country where there are large Chinese communities, then move into radio and TV. There are now whispers that it will launch a global 24-hour news channel to take on CNN and BBC World.

"The idea is to connect the world's Chinese speakers and enforce China's culture and civilisation," Rita Sim, the executive director of Sin Chew Media, who managed the merger, explains. "We want to become a pillar of the world's Chinatowns. We want to support Chinese- language schools, political organisations, businesses.

"It's about time world news was told from an Asian perspective. Western companies have dominated international media for too long."

The 60 million Chinese living outside China aren't the only targets. "Asia is the fastest-growing region in the world and is becoming increasingly prominent in world affairs. It's in Western interests to understand Asia better and listen more carefully to our point of view," Sim insists.

The deal has attracted much interest, mostly from non-Asian, non-print media companies, who want to hang on the newlywed's coat tails as it expands, Sim says.

The company's flagship titles, the most widely read being Sin Chew Daily and Ming Pao Daily News, are published in simplified Chinese characters - suitable for Chinese expats whose written Mandarin is a bit rusty, and for Westerners keen to learn the world's most widely spoken language.

None of the group's existing five newspapers and 33 magazines are to close and will, eventually, be exported as individual brands, some as local newspapers, others as regional titles. Their websites will remain too, but will soon be connected by a global news site that, Sim says, will be "a mega portal to the Chinese-speaking world".

Grand plans indeed. But the new company is lucky to exist at all. Together, Sin Chew and Nanyang control 85 per cent of Malaysia's Chinese-language media, and market watchers were amazed the deal was approved by competition regulators.

And it's still very early days. Media buyers suspect that it won't be at least another year until the company - which confirmed the merger in April - gets serious about going global. Its name hasn't been registered yet, although it will probably be called Asian Media Global, "to very clearly reflect our ambitions", Sim says.

But Sin Chew and Nanyang will have to win at home before they make aggressive strides abroad. Their titles, which include Nanyang's China Press (the second-largest circulating newspaper in Malaysia), account for one- quarter of Malaysia's RM370 million (£54 million) newspaper advertising market. But they lack the punch of the English-language rival The Star, which dominates with close to one-third of the market. And while Malaysia's ethnic Chinese are big readers (90 per cent of adults read a daily newspaper), only 65 per cent read a Chinese language paper. That number is falling as older generations born in mainland China die off.

Media buyers worry, too, that Sin Chew and Nanyang will hike their ad rates once the post-merger dust has settled. In its 80-year history, Sin Chew hasn't earned a reputation for flexibility on price. That is unlikely to change, Gina Lim, the media director of PHD Malaysia, thinks. "They don't tend to discount. Even if a client approaches them, they will say no," she says.

However, this won't affect Asian Media Global's appeal to advertisers. A bundled package in its newspapers will offer advertisers one million Chinese eyeballs in eight countries. And the portfolio is diverse, ranging from China Press, which targets a blue- collar readership, to Nanyang, which is more business-oriented.

Asian media companies are yet to make their mark worldwide. But in Ming Pao, the new group has overseas experience and knows how to handle itself abroad, Sim says. The Hong Kong publisher debuted its first North American edition in Toronto in 1993, Vancouver a few years later and has since launched newspapers in the US.

The group is certainly not short of cash, either. It generated HK$300 million (£19 million) when Ming Pao listed on the Hong Kong stock exchange, and the plan is to float Ming Pao in Malaysia. And that's not to mention the deep pockets of its owner Tiong, who is listed by Forbes as one of the world's richest men (and by Greenpeace as one of South-East Asia's biggest environmental threats).

Tiong has already drawn comparisons to the irresistible force that is Rupert Murdoch. Tiong is expected to go on a spectacular buying spree, and, critics say, he may sacrifice the editorial integrity of his newspapers while he's at it.

None have a perfect reputation to begin with. Nanyang and Sin Chew have been accused of political factionalism in the past, often dramatically swinging the Chinese Malaysian vote at election time. Meanwhile in Hong Kong, Ming Pao is considered unfashionably pro-Beijing.

The merger has not gone down well with Malaysia's Chinese community, which suspects press freedom will be strangled. Sim insists that the newspapers will be operated very separately. But readers still need convincing self-censorship will be avoided. Neither the takeover, nor the anti-monopoly demonstrations outside Sin Chew's headquarters which followed, were reported by Sin Chew Daily.

Editorial integrity will prove tricky given Tiong's early ambitions to enter a market not famed for free speech: China itself. Rumours have been circulating that Tiong has been courting Liu Changle, a former colonel in the People's Liberation Army, who runs Phoenix TV, a Chinese satellite TV operator. For any sort of deal to happen, Tiong would need the nod from Beijing government officials.

Tiong has supposedly been in talks with Richard Li, too, the son of the Hong Kong tycoon Li Ka-Shing, about buying a stake in one of the territory's leading TV stations, TVB. For now, though, Ming Pao is the most likely passport with which Asian Media Global will enter China.

Of course, the new company will not be the last globetrotting media giant from the East. The managing director of PHD China, ST Tso, notes: "Asian players will mirror how US brands such as Time and The Wall Street Journal have internationalised. The difference now is that technology will allow Asian companies to leapfrog their Western rivals."

THE LOWDOWN ON A CHINESE MEDIA GIANT

Company: Asian Media Global

Founded: April 2007

Market capitalisation: US$400 million

Owner: Tiong Hiew King

Footprint: The US, Canada, Indonesia, Australia, Malaysia, Hong Kong, Cambodia, Myanmar

Flagship newspapers: Sin Chew Daily, Guang Ming Daily, China Press, Ming Pao Daily News, Yazhou Zhoukan

Cost of a full-page ad: (colour) in the leading title Sin Chew Daily: RM 40,850 (£5,730)

Combined daily newspaper circulation: One million

Websites: Nanyang.com, mingpao.com, sinchew-i.com

What the buyers say "The Chinese empire is becoming stronger and is creating a wall that will be hard to break. The rise of Chinese-language monopolies like this one will affect negotiations with media agencies. But it's too early to say whether the threat to editorial independence scares readers off," Manjiri Kamat, the managing director of Mediaedge:cia Malaysia, says.