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China’s Bull Market For Music!

...370,000 square feet, with a new zone dedicated to music education and expanded areas for bowed instruments and pianos, Music China welcomed a record number of visitors and 1,900 exhibitors from 30 nations worldwide. This early high point in the show’s evolution coincides with a transformative period in the Chinese domestic music products market. Driven by a powerful symphony of economic, cultural, and government policy forces, this market is on the cusp of massive engagement and growth that will be felt industry-wide.

SNIEC’s aisles were packed throughout the show, especially on the two final days, when Music China is open to the public. For what it’s worth to gauge the “tone” of a trade show, Music China 2016’s ranged from merely positive to full-on exuberant, accompanied by the cacophonous counterpoint of competing product demos and visitors’ uninhibited instrument “test drives.” (No one who passed through the drum and percussion exhibits will ever complain about the noise in NAMM’s drum hall again!) The mood was summed up by Traveler Guitars President Corey Oliver: “You see crowds forming around product demos, taking photos and videos that they’ll post on their social media accounts, not because the performer is famous, but just because it’s fun and exciting to see someone performing.”

No longer just a tool for sourcing, Music China paints a vivid picture of the opportunities for selling into a vibrant domestic market. The most obvious feature of that market is its size, more than a billion souls strong. Another, no less compelling, is its rising prosperity. China is now deemed a middle-income country, with only about 10% of its population living on $1 USD a day, compared to 64% in 1980. Western economists estimate its current annual GDP growth at around 4%, well shy of the previous decade’s barn-burning 9%, but enviable nonetheless.

Equally attractive, China is a young market not only in its abundance of young consumers (although that too is invaluable), but “young” in the enormous number of potential customers who have very limited experience with buying music products and making music. Where the mature U.S. and European markets are swayed by economic tides and pop music trends, China’s (excluding its piano sector, which already leads the world) is a new frontier: inquisitive, unjaded, unsaturated, and ripe for development.

The cliché with which many Westerners long identified China and the Chinese was “inscrutable.” While arguably valid throughout much of the last century, the perception that Chinese consumers are too “different” simply no longer applies. Consider that this past June the Disney Corporation opened a $5.5 billion Shanghai Disney Resort that is four times larger than Disneyland. “It’s A Small World” rings very true in China, though with 1.3 billion people, some “small worlds” are larger than others.

The same is true for advances in basic retail practices. Oliver recalls that “15 years ago a clothing store might have had a few items laid out on a table under a bare light bulb. The next time I came, the same store had a 10% off sign, music playing, and all the employees were wearing coordinated outfits. They have progressed very rapidly.”

If this commercial soil didn’t already seem fertile enough, the Chinese government’s recently unveiled 2016-2020 Five Year Plan features policies encouraging consumerism, liberalized trade, and more equitable distribution of wealth. The plan projects annual GDP gains of 6.5%, a target that could, indirectly and over time, make musical instruments accessible to millions more customers. (Addressing long-range consumer demographics, China recently relaxed its one-child policy to tilt the nation away from 2014’s first recorded shrinkage of its working age population.) More notably still, the plan calls for investment of $124 billion in standardized school facilities, $6.2 billion of which has been earmarked specifically for music education. Terence Ng, president of China’s leading music products retailer Parsons Music, suggests that this progressive allocation is in line with Chinese national values, saying, “To Asian people it is very important for their children to play a musical instrument, to develop their mind, culture, and character.”

Alan Liu, CEO of AXL Musical Instruments, whose brands include Palatino, Recording King, The Loar, VHT, and others, suggests that policymakers correlated the prevalence of music study and school band programs in Shanghai with the dominance of Shanghai children in math and other academic competitions. He also cites studies at major Chinese universities showing superior brain function among people who play musical instruments. “Now students in grades 1-3 must learn at least one instrument,” he says, and adds that AXL is already benefiting from the state’s new music education push, as several school districts have started ordering its pianos.

The United States’ school band and orchestra programs are the envy of other nations’ music products retailers. Whereas recent pop music trends have provided scant boosts to the industry, school band programs promote sales more consistently than any other single factor by perpetually replenishing the industry’s customer base. In the past, China’s music education was executed almost exclusively through private academies akin to the West’s lesson studios and commercial music schools. Liu says that starting in 2015, every Chinese high school is required to run an orchestra or band program. And as an example of the degree to which his nation is assimilating U.S. school band traditions, he adds that last year Shanghai’s Aviation High School band won the silver medal at a major competition in Holland. How would the world’s music products suppliers respond if China fully adopts the American model of music education: integrated into the public school day of China’s roughly 200 million children?

Curves Ahead
Of course, such tectonic shifts don’t happen easily, or overnight. NAMM and CMIA (China Musical Instrument Association, “China’s NAMM”) presented a Music China forum of international experts to discuss their concerns and looming challenges, most of which don’t sound “foreign” at all.

One challenge the government’s new policy appears to address is making music education available to a broader swath of the population. “In previous years, only children of wealthy families or children of musicians would get lessons,” said panelist Cong Kong, director of the College of Continuing Education at Beijing’s Central Conservatory of Music. Zhe Qu, president of Dalian Fuyin Music Co. Ltd. music store chain, lamented that most music education in China had been limited to the “tier-one and tier-two cities,” neglecting poorer, more remote regions. Pending implementation of the government’s new music education initiatives, especially as the existing pool of qualified music teachers will not keep up with growing demand, he recommended more extensive use of online learning.

As in ongoing efforts by NAMM, the panelists urged focusing on the life-enriching aspects of music making over the creation of professional musicians. Zhe specifically characterized China’s past music education as exclusive and goal-oriented, with participation dependent upon graded tests and talent assessments. NAMM Director of International Affairs Betty Heywood, who moderated the forum, declared, “It’s sad, the prospect of 30 million children having the joy of music making tested out of them.” “[In the past] we put technique ahead of passion,” Cong added. “We need to reverse that approach and simplify our regimented pedagogy.”

Addressing the topic of adult music education, Ng described how his leading music retail chain had developed a family concert program to encourage parent involvement and participation, just as Zhe had introduced low-cost music lessons for the same purpose. Several panelists touted “silver” lesson programs for seniors as well as programs emulating NAMM’s New Horizons Band. Ng noted the need to tailor teaching methods to adult and elderly students.

The proliferation of Chinese manufacturers and brands over the past decade, on the bright side, has enabled new producers to earn a place in the market on their merits, less deterred by the West’s ensconced hierarchies. However, the rapid expansion of music education could shine a harsh light on China’s notoriously uneven instrument quality. Expressing their concern, the panelists agreed that poor quality instruments will discourage beginners and hinder plans for a more musical society.

Small World
For a clearer picture of where the Chinese music products market is headed, it helps to consider where it’s been. China was introduced to Western music over a century ago, largely through classical concerts and recordings. That connection was severed during China’s ten-year Cultural Revolution, when virtually all non-indigenous art and culture were purged from public view. When the Revolution officially ended in 1976, China’s window to the world began reopening slowly, incrementally: Government-sanctioned classical styles flourished; the West’s decadent inventions of jazz and rock ’n’ roll, not surprisingly, did not. It’s no wonder, then, that piano, and to a lesser extent orchestral strings, remain beloved and firmly ensconced in the nation’s artistic psyche. As median Chinese incomes continue to rise, more of the nation’s citizens will be able to afford higher-priced brands from Europe and America, and domestic brands will continue to raise their game to compete. Speaking of how owning a piano has become an important status symbol in Chinese culture, Harvey Levy of Levy’s Leathers says, “Once you have your Mercedes, then you need your grand piano. Has it trickled down to m.i. yet? It’s getting there.”

Getting there indeed. While the piano continues to dominate the Chinese music products market, expanded exposure to capitalism and world cultures over the past two decades is having an obvious effect on China’s society. Just as its domestic manufacturers have proven remarkably adept at copying all manner of Western products, technologies, and production methods, especially in its cosmopolitan larger cities its people have developed a strong appetite for Western culture, including its pop music. While classical piano is still king with their parents, Chinese millennials have become positively eclectic in their consumption of American-style pop genres running the gamut from rock, folk, blues, pop, and funk, to hip-hop, jazz, EDM, and even bluegrass. (The Chinese government even produced an official rap song that features an animated President Xi Jinping!)
Some artists blend Western pop elements with customary Chinese styles. For example, Ego Fall intersperses heavy metal’s familiar guttural growls and screams, menacing guitars, and breakneck drumming with traditional Chinese instrumentation and Mongolian throat singing. Others, with obvious language differences aside, sound thoroughly “Western.” Are they all on the cutting edge of their respective genres’ artistic evolution? It doesn’t matter. From where they started, they are “catching up” very fast. And perhaps the only relevant measures are the size of the concert crowds and radio audiences they’re commanding, and the numbers of students they’re inspiring to take lessons and buy instruments.

D’Addario Vice President of Sales David Via applauds the central government’s support for public school education but points to the established parallel industry of private academies and schools that has already begun shaping and growing the domestic music products market. “China is a very entrepreneurial culture,” he says. “Its people were quick to fill the void [created when sanctioned styles weren’t satisfying] the society’s growing appetite for Western music. There are jazz schools, rock schools, heavy metal schools, drumming schools.... Nine Beats [Education Institution for Modern Music, a ‘School of Rock’-type drum, guitar, and bass academy franchise business] has hundreds of locations throughout China, and each one has students in the high hundreds or thousands.” [Editor’s note: The chops and conceptual grasp of some of Nine Beats’ youngest students, including many females, is frightening.]

In another illustration of how China’s music scene, once totally insular, has “become the United Nations,” Adrian Bagale of Shubb International and Northfield Mandolins cites Northfield artist Tom Pang, “a mandolin player from Inner Mongolia who can hang with the world’s best mandolin players” and his band: “a Chinese-Korean vocalist who sounds like Patsy Cline; a Serbian accordion player; an American jazz guitarist; a banjo player from Japan; and another guitarist and bassist from Shanghai. The acoustic music scene is blowing up in China,” Bagale continues. “When bands like Mumford & Sons are taking over pop music in the U.S., [the style] gets picked up here as well. Musicians here are very curious, and they’re willing to experiment with [unfamiliar] instruments.” Bagale, who hails from Michigan, first saw Pang playing mandolin in a Chinese television commercial for Ford automobiles.

Chinese Bluegrass?
“We have bluegrass bands with all Chinese guys—it’s quite funny—but they’re actually very good,” Liu says. “A lot of famous Western musicians come to perform here now, and that’s having an impact on the local players. China’s music scene follows American pop music trends very quickly: It’s not the next month; it’s almost the next morning.”

Amidst Music China’s broad menu of educational forums, panel discussions, and master classes, a separate forum co-organized with the China Jazz Education Festival explored international perspectives of jazz promotion and education practices in China. Obviously a broad adoption of the genre could have an immense impact on the school band sector. “Jazz has been around in America for 100 years,” said saxophonist/educator David Liebman, one of the presenters; “in China only for a decade or so. But it’s growing in popularity, especially with young people, who love its freedom.”

From exhibitor product demos to formal concerts, Music China presented a diverse, international slate of entertainment. Featured performers included Yamaha piano artist Maksim Mrvica, six-time Grammy Award winning Hawaiian guitarist/ukulelist Daniel Ho, Italian rock bassist Dino Fiorenza, Finnish thrash metal band Dead Shape Figure, Germany’s Beyond the Black drummer Tobias Derer, Canadian classical guitarist Ewan Dobson, guitarist Lei Chen of pioneer Chinese metal band Tang Dynasty, Swedish heavy metal guitarist Ola Englund, and The Voice of China season four champion Lei Zhang. Other Music China attractions included the SchoolJam China competition for school bands; a comprehensive program of sessions featuring the world’s top bowed instrument makers; the Kids’ Music Castle, where children can try out a variety of instruments; and the “Music Warms Our Hearts” campaign featuring performances by autistic children and fundraising activities.

Overall, the strength of “the Shanghai Show,” Music China, and the economic and cultural winds behind music making in the world’s most populous nation bode extremely well for the industry.

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