Local Buzz and Global Pipelines: The Vitality of Creative Industry Clusters in Beijing and Shanghai

M50 Art District, Shanghai (Source: http://spoiltbytes.blogspot.com/2015/05/m50-art-district-shanghai.html)

Abstract: To facilitate the transition to a knowledge-based economy, Chinese policymakers have sought to create favourable conditions for the development of the cultural and creative industries (CCI). This paper compares the development of CCI in Beijing and Shanghai, two leading cities in China’s creative economy, with a focus on their CCI clusters: the Beijing 798 Art Zone and Shanghai M50. Both clusters first developed due to organic mobilization among artists which resulted in their rising status in the international contemporary art industry. Later, municipal governments incorporated these successful clusters in their agendas to achieve global city ideals and increase urban attractiveness. With similar beginnings, 798 and M50 exhibit varying patterns of growth under Beijing and Shanghai’s separate approaches to CCI governance. By relying on the relational buzz-and-pipeline conception, this paper examines the relationship between regional political economy and the development of CCI clusters. Given the peculiar nature of cultural and creative goods, this paper argues that CCI clusters benefit from a policy framework that protects internal networks within clusters (local buzz) but adopts a hands-off approach regarding their regional and international linkages (trans-local pipelines). As cultural production relies on the presence of “creative ambiance” which is the result of artists’ autonomy and avant-garde pursuits, a vibrant local buzz is essential to the attraction and sustenance of trans-local pipelines.

Keywords: cultural creative industries, Beijing, Shanghai, creative clusters, relational economy

Since the Chinese central government designated the cultural and creative industries (CCI) as a “national strategic industry” in the early 2000s, an explosive growth of cultural spaces has taken place across the country.[1] In this essay, I will examine the development of CCI clusters in Beijing and Shanghai, China’s two leading cities in CCI output,[2] by comparing the local and non-local knowledge circulations in their CCI clusters. While official Chinese documents label the creative sector as the “cultural and creative industries”;[3] this essay will refer to the CCI, the cultural industry, and the creative industry, interchangeably because they refer to the same group of enterprises.

A cross-comparison between Beijing and Shanghai allows us to observe the outcomes of different CCI policy frameworks because the scales of CCI development in the two cities are comparative – they represent the highest and second-highest concentrations of listed creative firms in the nation.[4] However, scholars have demonstrated further nuance in the development of CCI clusters in the two cities, namely that Shanghai’s creative sectors outperform Beijing’s in terms of aggregate and average turnovers as well as the share of the city’s GDP.[5] Building upon this distinction, I will utilize the relational framework of local buzz and global pipelines to answer the research question: how do different forms and intensities of state intervention affect the dynamic growth of CCI clusters in Chinese cities?

To start, I will introduce the historical and present development of the cultural and creative sector in China. Then, I will employ existing literature to explain my methodology, the buzz-and-pipelines conception,[6] and why this relational framework provides an appropriate perspective for this research. Next, I will address the local and trans-local linkages of CCI clusters in Beijing and Shanghai, focusing on the Beijing 798 Art Zone and Shanghai M50. Finally, the Discussion section will bring the analyses for both cases together to address the research question. With consideration to the peculiar nature of creative production and China’s market socialism, I argue that the economic success of CCI clusters relies on a policy framework that protects the organic development of local buzz and relies on free-market mechanisms for the cultivation of trans-local associations.

Historical Overview: China’s “Cultural Industries Fever” 

Starting in the late 1970s, China has demonstrated significant progress in the transition from a manufacturing-driven economy to a creative and innovation-based economy.[7] After the early 2000s, an evolution of political decisions defined the role of creativity in China’s market socialism: in 2005, the Fifth Plenary Session laid the legal framework for non-public capital to invest in the cultural industry;[8] in the following year, the National 11th Five Year Plan established the development of CCI as a core strategy for national economic growth.[9] Today, the operations of most cultural industry entities remain under state planning, subsidization, and, in some cases, direct management.[10]

In China’s “cultural industries fever”, top-tier cities played a leading role as innovations and trial operations sites. To construct urban competitiveness, these municipalities produced different policies and demonstrated various levels of progress of becoming leading players in the national and global economy.[11] This essay aims to study how policy interventions in creative industry development may result in different patterns of growth among creative industry clusters given different relational circumstances in cities.

Literature Review

The Relational Economy of Creative Industries Clusters

The creative industries resemble a roughly defined sector that encompasses activities including “advertising, architecture, the art and antique market, crafts, design, designer fashion, film, interactive leisure software, music, the performing arts, publishing, software and computer services, television and radio”.[12] Scholars have identified a distinctive set of production and distribution relationships within cultural industries – namely, the need for skilled labour,  organization based on dense networks, the synergy between various occupation types, the repletion with a wide variety of external economies, and the reliance on institutional infrastructures.[13] Recognizing the idiosyncratic nature of creative goods, Branzanti proposes that the investigation of creative clusters should consider both the specific features of creative industries and the uniqueness of district economies.[14]

The Buzz-and-Pipeline Conception

The relational buzz-and-pipeline conception sees the regional growth of clusters as dependent on the reflexive relations between local and trans-local knowledge flows and transactions. Within this mechanism, the “buzz” refers to the particular information and communication ecology, enabled by co-location and face-to-face contact within a cluster; the “pipeline” refers to the trans-local, or global, interactions that supply the cluster with external information. Scholars of relational economy highlight the dynamism between the two processes in enabling knowledge creation and innovation in clusters. On the one hand, over-embeddedness among internal players may result in inefficiency; on the other hand, the efficient application of new knowledge depends on the filtering function of local buzz which isolates the particularly useful elements.[15]

The relational buzz-and-pipeline conception is appropriate for the scope of this essay because it attends to both the peculiar nature of creative goods and the institutional context of China’s creative sector development. The focus on internal and external networks attends to the CCI’s knowledge-intensive nature. In particular, the conception also provides a productive framework for analyzing cluster development under China’s “state-driven hybrid model” – it examines the performance of dynamic linkages under various levels of state regulations.[16]

Case Studies

The two cases have been chosen for this study for their similar beginnings: as pioneers of China’s CCI clusters, they developed according to a similar timeline through the organic mobilization among artists.[17] Although they share many similarities, the two clusters exhibit different growth patterns in local and trans-local linkages due to differences in managerial tactics. The Discussion section will compare the two cases for how the different political economies in Beijing and Shanghai and engendered different growth in CCI clusters – namely, that a more liberalized policy framework is more conducive to the local buzz among cluster players, which is crucial in cultivating and maintaining trans-local pipelines.

The Beijing 798 Art Zone

Located in the northeast corner of Beijing, the 798 Art Zone was part of the former Ministry of Electronic Industry from the late 1950s to 1964. Beginning in 2000, the low rent and Bauhaus style architecture attracted local and international artists to set up studios which led to the clustering of creativity-centred businesses.[18] The artists’ organic mobilization valorized 798 with international fame and inspired the municipal government to incorporate 798 into its world city branding.[19] In 2006, a “Beijing 798 Art Zone Development and Management Office” was set up jointly by the Seven Star Group (owner) and various levels of the government to oversee 798’s planning and management.[20]

Local Buzz

Previously, residency at 798 was highly desired among artists for the opportunities of face-to-face contact and knowledge sharing between other artists, curators, and buyers.[21] After 2006, the state’s intervention had inimical effects on the community spirit, a hallmark of 798 due to an evolution of trust and cooperation through bottom-up mobilization.

One of the top managerial objectives was to align 798’s creative style to Beijing’s Global City credentials by orienting it towards high-end figures that showcase China’s contemporary art.[22] This was demonstrated by the transfer of event-planning rights from artists into the hands of exhibition professionals. This new organization format appeared to have freed artists from administrative and financial chores; in reality, it prevented the creation of local buzz. Not being able to participate in vertical or and horizontal organizations through event-planning, there are fewer opportunities to engage in the development of a “[community] of practice” where a shared language, attitude, and standard came to encompass artistic innovation through tacit knowledge transfer.[23] For artists, such community spirit is essential as it allows them to “feel the pulse of contemporary artistic trends”.[24]

Moreover, creative control began to loom over the artists for 798 to represent Beijing’s official image. Previously, artists used their work to express criticisms and social ills; now, this presence of (self-)censorship served as a barrier in sharing relevant signs and information in stimulating artistic creation and, thus, limited the Zone’s avant-garde sensibilities.[25] The top-down approach also limited the cluster’s local buzz by replacing the old creativity-oriented network with one that centred around cultural consumption.[26] The city government’s goal to redevelop 798 into a tourist destination involved the improvement of service facilities and a shift in promotional discourses, which resulted in gentrification and dramatic rent hikes.[27]

Combined with the effect of reduced artistic autonomy, artists started to trickle out of 798.[28] By 2008, one-third of the galleries had closed;[29] as the number of consumption facilities continued to increase.[30] The mass exodus of artists fundamentally worked against the notion of being “on the scene” which generates local buzz through planned and unplanned communication and transactions.[31]

Trans-local Pipelines

The eroded local buzz made the city’s effort to impose trans-local associations counter-productive. The transfer to state management opened up abundant associations with high-end figures in the art world; however, these linkages could not be effectively applied without the local buzz between artistic enterprises. Under official management, 798 became a venue of the Beijing Design Week and, thus, the city’s heart of fashion design and modern art.[32] Although the cluster benefited from social networking and information sharing in temporary clusters during exhibitions,[33] the decline of artistic presence meant that there lacked a local apparatus to receive these relationships and offer external actors the appeal to remain in contact with 798.

The decline in creativity-centred activities also led to the decline in regional pipelines. Although city-wide events supplied regional associations, there lacked joint interpretative schemes on both ends to practice and reinforce those relationships. The diluted creative ambiance at 798 meant that the imported knowledge, such as industry trends, did not apply effectively within the cluster as there lacked “absorptive capabilities” which assimilates incoming information into a locally applicable format.[34] Furthermore, while these exhibitions increased the popularity of 798, most visitors were attracted to consumption activities, rather than art-related transactions.[35]

It is also important to note that, previously, the artists had maintained vibrant international linkages;[36] these relationships declined under official management due to rent hikes and the resultant exodus of artists. An example of this is the Ullens Foundation, private collectors from Belgium, who announced its departure in 2016 after ten years of tenancy.[37] Thus, without the proper functioning of local buzz, trans-local pipelines are hard to secure. The inorganic imposition of external linkages in top-down cluster management has proven to be counter-productive.

The Shanghai M50

In 1994, the “Shanghai Chunming Slub Corporation” (SCSC) was founded under Shangtex Holding (Group) Corporation, a state-owned enterprise (SOE), to manage the industrial complex on the south bank of the Suzhou River.[38] Starting in 2001, the company started replacing existing enterprises with art studios and saw a large influx during 2002 and 2003 due to the demolitions of nearby art zones. Due to Shanghai’s rising awareness for heritage preservation, the buildings at M50 were preserved and in 2005, nominated as the “first batch of cultural creative industrial clusters”.[39] By 2007, almost all the 130-plus enterprises at M50 were art studios, galleries, design firms, or culture-related research organizations.[40]

Local Buzz

In general, research has shown that less direct intervention of state management has resulted in the better preservation of organically developed local linkages at M50, compared to that of 798. In terms of negative development, the SOE’s infrastructural upgrading of M50 has led to the depersonalization of space and reduced the local buzz rooted in community spirit. To enhance urban attractiveness, M50 was named a “five-star international art district” by the city of Shanghai.[41] The improved physical conditions resulted in the dissipation of the “revolutionary bond” that artists had developed through collaborative actions in adverse conditions.[42] Like the fate of 798, the decrease in cooperative experiences prevented the development of professional trust and hindered the mutual stimulation of further growth (Bathelt & Glückler, 2011).

The industrial gentrification of M50 also generated displacement and fragmented the local ecology. This was partly due to the growing reputation of M50 in the arts and culture industry, as well as the overheated property market along Suzhou Creek.[43] From 2002 to 2012, rental prices at M50 saw a near tenfold increase.[44] This resulted in the acceleration of displacement rate within the cluster which forged a “generation gap” between the early settler and the new arrivals.[45] Furthermore, the practice of providing concessions to some tenants of higher industry status caused resentments among tenants and engendered cliquism.[46] This fragmentation limits the benefits of co-location – actors are simply engaged in geographic proximity, whereas the lack of community cohesion reduces the potentialities for collaborative actions and intended information sharing.

Although the creative ambiance of M50 has been subjected to dilution, actors still benefit from being “on the scene” where unplanned encounters may provide access to tacit knowledge and the observation of other actors.[47] In response to the rising rents, many artists have resorted to alternative measures to sustain their residency, such as tailoring to market demand or engaging in dealings unrelated to artistic creation.[48] Unlike 798’s mass exodus, M50 tenants still demonstrate the willingness to stay as residency remains a coveted luxury for emerging figures in Chinese contemporary art.[49]

Trans-local Pipelines

Ever since its organic beginning, M50 has already exhibited diverse trans-local linkages. This was largely due to the fact that the cluster’s local buzz has maintained substantial creative ambiance and avant-garde sensibilities, which continued to attract external attention and forge linkages. Other than the western presence in its residents, namely ShanghART and BizArt,[50] the cluster gained external associations along with the Shanghai government’s rise to heritage consciousness in the early 2000s. Together, cluster occupants and Tongji University’s “Research Center for National Historic Cities” (RCNHC) set up forums featuring celebrity artists to raise the status of M50 as a heritage district.[51] These attempts not only drew M50 to scholarly, media, and government attention, but also allowed cluster actors access to external markets and trans-local interactions.

Unlike 798 where the top-down regulation of cluster networks dismantled the interaction between the local and trans-local circulation of knowledge, the market-oriented approach to managing M50 did not affect its previously established relationships with outside players. Since its embryonic stage, M50 continued to be home to a mix of Chinese and foreign artists and firms. Even among firms established by Chinese people, many of those were returned artists from the West.[52] Although rising rents have generated a rapid displacement rate, these turnovers occurred among impacted small to medium enterprises as large studios were largely unimpacted – most pioneer tenants, such as Xue Song,[53] have remained as more award-winning artists announced their M50 membership.[54]

In terms of trans-local linkages with the immediate urban fabric, M50 is faced with the lack of public communicative activities and a low mixed-used index;[55] however, the advantage that comes with this relative isolation is the preservation of creative concentration. This comes in stark contrast with 798 where the surge in cultural tourism has diluted its avant-garde sensibilities and decreased the artist-centred local buzz. Thus, the prioritization of international linkages over regional linkages better serves the development of CCI clusters.

Discussions and Conclusions

Upon comparison, although eroding internal linkages can be found in both Beijing 798 and Shanghai M50, the local buzz at M50 is more active, as most of its original artistic ecosystem has remained intact. The condition of trans-local linkages is where the two case studies diverge significantly. Both clusters used to have active, external associations before official endorsement; thus, the comparison points to the development of the relations after state intervention. Current research has shown that the clusters’ trans-local pipelines largely feed upon the happenings of local buzz. In 798, the decrease in creativity-led activities meant that there lacked continuous maintenance and application of external linkages; in M50, the creative ambience made cluster tenancy attractive to international players while offering the necessary infrastructure to anchors these connections. As foreign figures set up branches at M50, their presence serves as built-in pipelines which supply external knowledge and access to further networks. This finding matches Bathelt and Glückler’s theory which highlights the dynamism between local buzz and trans-local pipelines.[56]

The comparison testifies to the configuration of CCI development across China. As aforementioned, while Beijing hosts the most creative enterprises in China, Shanghai’s creative economy triumphs in terms of turnover rates and its share in the municipal GDP.[57] The fact that Beijing has a larger creative economy has to do with its position as the national capital and the access to stronger financial backings and state-facilitated projects. On the other hand, Shanghai’s political economy has historically been more liberalized and akin to the free market.[58] This is no different for the creative sector; the state plays an indirect role in CCI management as SOE serves as the intermediary between artists and the government officials.[59] The contrasting institutional frameworks in the two cities resulted in different approaches to CCI cluster management and, thus, have led to different development outcomes. In particular, a liberalized approach to creative economy management is more favourable in stimulating creative innovation and the attractiveness to external players in the art world.

So, how do different forms and intensities of state intervention affect the dynamic growth of CCI clusters in Chinese cities? The study has demonstrated that, a vibrant, creative ambience is organically attractive to external collaborators and the buzz within local networks will serve to maintain and tighten these relationships. In other words, the state should only play a secondary role in in promoting trans-local linkages within the creative economy; instead, policy frameworks should focus on protecting local buzz from rising urban land values and fierce competitions with other industries. The benefit of this is two-fold: firstly, it fosters local talents; secondly, the promotion of local buzz simultaneously paves the groundwork for trans-local pipelines. Together, they promise the dynamic growth of CCI clusters. To conclude, the economic success of CCI clusters relies on a policy framework that protects the organic development of local buzz and relies on free-market mechanisms for the cultivation of trans-local associations. Future empirical research may identity the threats facing internal networks and their policy implications, such as special funding for artistic showcase or talent incubation.


Amy Chen is a fourth-year undergraduate student in Contemporary Asian Studies, Diaspora and Transnational Studies, and Political Science. Her research focuses on urban regeneration and contemporary art infrastructure in Shanghai. Currently, she is an intern for the Asia-Pacific Research Lab, a participant in the Insight Through Asia Challenge, and a student academy member at the School of Cities.


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[1] Xu Zhang and Kunlun Chen, “Which Scale Matters? Rethinking Cultural Industry Development Policies from a City Network Perspective,” Journal of Urban Affairs 43, no. 1 (2021): 143.

[2] Ibid.

[3] Si Si, “A Report on Beijing’s Cultural and Creative Industries Media Clusters,” Global Media and China 1, no. 4 (2016): 413.

[4] Zhang and Chen, “Which,” 145.

[5] Kai Liu, “Creative Edge of Cities: A Comparative Analysis of the Top 500 Creative Industries Businesses in Beijing and Shanghai,” Creative Industries Journal 1, no. 3 (2009): 235.

[6] Harald Bathelt and Johannes Glückler, The Relational Economy: Geographies of the Knowledge Economy (Oxford: Oxford University Press, 2011), 131-132.

[7] Shaofei Niu et al., “Sustainability Issues in the Industrial Heritage Adaptive Reuse: Rethinking Culture-Led Urban Regeneration through Chinese Case Studies,” Journal of Housing and the Built Environment 33, no. 3 (2018): 502–3.

[8] Shaun Chang, “Great Expectations: China’s Cultural Industry and Case Study of a Government-Sponsored Creative Cluster,” Creative Industries Journal 1, no. 3 (2009): 264–5.

[9] Liu, “Creative Edge,” 227.

[10] Zhang and Chen, “Which,” 143.

[11] Ibid.

[12] Nicola J. Thomas, Harriet Hawkins, and David C. Harvey, “The Geographies of the Creative Industries: Scale, Clusters and Connectivity,” Geography 95, no. 1 (2010): 14.

[13] Liu, “Creative Edge,” 230.

[14] Caterina Branzanti, “Creative Clusters and District Economies: Towards a Taxonomy to Interpret the Phenomenon,” European Planning Studies 23, no. 7 (2015): 1402.

[15] Bathelt and Glückler, The Relational Economy, 137-8.

[16] Zhang and Chen, “Which,” 141.

[17] Niu et al., “Sustainable,” 503.

[18] Tsu-Lung Chou, “Creative Space, Cultural Industry Clusters, and Participation of the State in Beijing,” Eurasian Geography and Economics 53, no. 2 (2012): 203.

[19] Niu et al., “Sustainability,” 506.

[20] Chou, “Creative Space,” 203-4.

[21] John McCarthy and Yan Wang, “Culture, Creativity and Commerce: Trajectories and Tensions in the Case of Beijing’s 798 Art Zone,” International Planning Studies 21, no. 1 (2016): 4.

[22] Lily Kong, Ching Chia-ho and Chou Tsu-Lung, Arts, Culture and the Making of Global Cities: Creating New Urban Landscapes in Asia (Cheltenham: Edward Elgar Publishing, 2015), 133-6.

[23] Bathelt and Glückler, The Relational Economy, 134.

[24] Chou, “Creative Space,” 209.

[25] King, Ching, and Chou, Arts, 136.

[26] Ibid., 136-138.

[27] McCarthy and Wang, “Culture,” 7.

[28] King, Ching, and Chou, Arts, 138.

[29] Chou, “Creative Space,” 213.

[30] Niu et al., “Sustainability,” 511.

[31] Bathelt and Glückler, The Relational Economy, 134. 

[32] Si, “A report,” 419.

[33] Huasheng Zhu, Kebi Chen, and Yunlong Lian, “Do Temporary Creative Clusters Promote Innovation in an Emerging Economy? — A Case Study of the Beijing Design Week,” Sustainability (Basel, Switzerland) 10, no. 3 (2018): 784.

[34] Bathelt and Glückler, The Relational Economy, 136. 

[35] McCarthy and Wang, “Culture,” 9.

[36] Chou, “Creative Space,” 203.

[37] Niu et al., “Sustainability,” 511.

[38] Sheng Zhong, “By Nature or by Nurture: The Formation of New Economy Spaces in Shanghai,” Asian Geographer 28, no. 1 (2011): 37.

[39] Niu et al., “Sustainability,” 507-8.

[40] Sheng Zhong, “New Economy Space, New Social Relations: M50 and Shanghai’s New Art World in the Making,” in New Economic Spaces in Asian Cities (London: Routledge, 2012), 174.

[41] Zhong, New, 176.

[42] King, Ching, and Chou, Arts, 148-9.

[43] Zhong, “By,” 38.

[44] Zhong, New, 174.

[45] King, Ching, and Chou, Arts, 149.

[46] Zhong, New, 176.

[47] Bathelt and Glückler, The Relational Economy, 134. 

[48] Zhong, “By,” 42.

[49] Zhong, New, 177-8.

[50] King, Ching, and Chou, Arts, 146.

[51] Zhong, New, 172-3.

[52] Ibid., 171.

[53] Xin Gu, “Cultural Industries and Creative Clusters in Shanghai,” City, Culture and Society 5, no. 3 (2014): 126.

[54] Zhong, New, 177-8.

[55] Niu et al., “Sustainability,” 512.

[56]. Bathelt and Glückler, The Relational Economy, 137-8.

[57]. Liu, “Creative Edge,” 235.

[58]. Ibid., 241.

[59]. Zhong, New, 177.