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Article

Sustainable Development of the Cultural and Creative Industries in the Post-Pandemic Era: A Case Study of the Animation Industry in China

by
Ting-Ting Feng
and
Li-Fan Yang
*
School of Art and Design, Zhejiang Sci-Tech University, Hangzhou 310018, China
*
Author to whom correspondence should be addressed.
Sustainability 2024, 16(22), 9796; https://doi.org/10.3390/su16229796
Submission received: 28 September 2024 / Revised: 8 November 2024 / Accepted: 8 November 2024 / Published: 10 November 2024
(This article belongs to the Special Issue Sustainable Development in Light of Current Challenges in the Social and Economic Sphere)
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Abstract

:
As a novel development concept and model, the cultural and creative industries have become an important sector of the global economy owing to their diverse development pathways. In particular, the animation industry surpasses traditional sectors in scale. This industry demonstrated unprecedented resilience during the COVID-19 pandemic, highlighting its critical significance in the global economy. In this study, the SWOT (strength, weakness, opportunity, and threat)-PEST (political, economic, social, and technological factor) analytical model was employed to systematically assess various properties of the animation industry in China. Through an in-depth analysis of both internal and external factors affecting the industry and in consideration of conditions in the post-pandemic era, industrial development strategies across macro, meso, and micro levels were proposed to improve the existing development system. It was found that policy guidance at the macro level, improving the industry chain, integrating technologies at the meso level, and expanding target markets and financial channels at the micro level are key strategies for the continued development of the industry. This study offers new insights and directions for the sustainable development of the animation industry in China.

1. Introduction

Over the past two decades, with the continuous development and widespread adoption of digital technology, global cultural and creative industries have experienced rapid growth. As a new development concept and model, the cultural and creative industries, characterized by design-oriented products and the image of ‘smokeless industries’ and ‘intellectual industries’, have gained widespread recognition worldwide [1], becoming an important channel for economic growth and development in many countries [2]. The creative economy promotes the achievement of Sustainable Development Goals through diverse pathways, especially Goal 8 (decent work and economic growth), Goal 9 (industry, innovation, and infrastructure), Goal 11 (sustainable cities), and Goal 12 (sustainable consumption and production patterns). It has become an essential sector of the global economy [3,4]. According to 2022 statistics from UNESCO, the cultural and creative industries account for 3.1% of the global GDP, creating nearly 50 million jobs globally, representing 6.2% of the total number of jobs [5].
Animation is one of the five pillar industries of the cultural and creative industries. As a vibrant and rapidly growing component of the creative economy, the global animation market was valued at USD 394.6 billion in 2022 and is expected to grow to USD 528.8 billion by 2030 [6]. In Japan, the economic scale of the animation industry far exceeds that of traditional key industries, making it the second-largest pillar industry. In 2023, the value of the animation industry in China surpassed RMB 300 billion (approximately USD 43 billion) [7], with a revenue growth rate of 19% [8]. By 2029, the value of the animation industry in China is projected to exceed RMB 470 billion [8]. China has established itself as the second-largest animation market in Asia, trailing only Japan. Beyond its economic value, the animation industry also possesses cultural significance [9,10] and entertainment functions [11]. The highly globalized nature of the animation market makes it an important bridge for cross-cultural communication and a powerful medium for cultural exchange. Animation products reflect the cultural essence of different regions [12] and social values. They satisfy spiritual needs and contribute to cultural soft power.
Sustainable development is also a critical focus for the animation industry, particularly in light of the challenges posed by the COVID-19 pandemic. The ability to integrate economic, social, and cultural factors into industry practices is crucial for long-term sustainability. The COVID-19 pandemic, which broke out at the end of 2019, brought unprecedented challenges and disruptions to nearly all industries [13,14,15,16]. However, it also acted as a catalyst for transformation, accelerating the digital transformation of the animation industry and reshaping its dynamics [17]. As a major component of the cultural and creative industries, the animation industry demonstrated greater resilience than other sectors during the pandemic [3]. It quickly adapted and continued to thrive amid the impact of the pandemic [18,19,20]. During widespread pandemic-related shutdowns, it provided ongoing cultural engagement for global audiences. China, as one of the first countries to recover its film market [21], saw its animation industry achieve steady GDP growth, even during the COVID-19 pandemic (Figure 1) [7], highlighting the importance of development strategies employed within the sector.
Although the animation industry has shown remarkable resilience and growth potential during the COVID-19 pandemic, its future development still faces challenges and uncertainties. Especially in the post-pandemic era, the question of how China’s animation industry can maintain this growth trend under the new normal and achieve industrial transformation, upgrading, and sustainable development has become a pressing issue. This study offers an in-depth discussion of these concerns.

2. Literature Review

2.1. Sustainable Development and Cultural and Creative Industries

In 1987, during the United Nations Conference on Environment and Development, the Brundtland Commission formally introduced the concept of “sustainable development” in the report Our Common Future, defining it as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” [22]. In 1992, the United Nations Conference on Environment and Development in Rio de Janeiro, Brazil, adopted key documents, such as the Rio Declaration and Agenda 21. These documents emphasize the importance of fairness, sustainability, and inclusivity, shifting the focus of sustainable development from environmental protection alone to a more comprehensive emphasis on the sustainability of ecological, economic, and social systems [23,24]. The goal is to foster harmonious relationships among people and between humans and nature [25], elevating sustainable development from a theoretical concept to a global action agenda. In 2010, culture was recognized as a fundamental component of sustainable development in all its aspects, confirming its strong contributions to economic growth, social stability, and environmental protection [26]. As a result, some scholars argued that culture should be included as the fourth dimension of sustainable development [27,28,29]. In 2015, the United Nations Summit on Sustainable Development adopted the 2030 Agenda for Sustainable Development, outlining 17 fields with 169 specific goals to address sustainability issues across various dimensions from 2015 to 2030 [30].
In China, sustainable development has similarly garnered significant attention from the government. Following the 1992 United Nations Conference on Environment and Development, the Chinese government took the lead in formulating Agenda 21: White Paper on China’s Population, Environment, and Development in the 21st Century. As a guiding document for national economic and social development, this white paper marked the beginning of China’s sustainable development initiatives [31]. In 2003, the Chinese government introduced the Action Guides for Sustainable Development in the Early Stages of the 21st Century, outlining specific measures to advance sustainable development [32]. These documents reflect the concept that sustainable development is not a one-dimensional pursuit but rather an integrated and coordinated process across multiple domains.
The cultural and creative industries position culture as a sector of activity, leveraging traditional knowledge and unique cultural practices as fundamental resources [33,34]. Through tangible and intangible heritage, creativity, and various forms of artistic expression [26], traditional knowledge is connected with consumers, serving societal and economic functions in alignment with the paradigm of sustainable development [35]. Research has focused on the contributions of the industry to both regional and societal development [36,37,38,39,40] as well as the economic and financial sustainability of these sectors [41,42,43,44]. The cultural and creative industries have long been regarded as potential tools for economic development [45]. Their innovation and creativity are viewed as powerful means for enterprises to achieve sustainable growth and obtain a competitive advantage [46]. The digital transformation of these industries is considered an emerging trend in their development [4]. Moreover, the cultural and creative industries also influence the social and cultural dimensions of people’s lives [47], prompting extensive research into the policies supporting these industries [48,49,50,51,52].

2.2. Current Status of the Animation Industry in China

The animation industry in China originated in the 1920s and has experienced periods of prosperity and stagnation over its 100-year history [53]. Since the 1980s, the industry has largely developed through outsourcing, a direction that has harmed the growth of the original domestic animation sector. Chen et al. [54] argued that the outsourcing model has interrupted decades of progress in the animation industry in China. Prolonged dependence on outsourcing also led to an overemphasis on imitating foreign styles in the early stages, resulting in a lack of originality in Chinese animated works [55]. Since the 21st century, however, the Chinese government has introduced strong policies to support the domestic animation industry. With the advent of the internet era, the channels for cultural dissemination have expanded, and significant capital has flowed into the animation sector, spurring the rapid and sustained growth of the domestic animation industry.
Despite the rapid expansion, a robust development model for the animation industry in China has not yet been established. The value chain can be divided into three segments: content production, content dissemination, and derivative monetization, forming a complete cyclical operating system (Figure 2) [56] in which each segment is indispensable. The degree of completeness of the industry chain directly impacts the level of development. As early as 2011, China became the world’s largest animation producer. The annual production volume reached 260,000 min, twice those of the United States and Japan [57]. However, being a major producer does not equate to being a global leader in animation. Under policy support, the animation industry in China has historically placed more emphasis on quantity than quality. After 2012, however, production volume began to decline while output value increased, signaling a positive shift from quantity to quality. Despite this shift, several unresolved issues remain. For example, many works primarily target children, and domestic audiences continue to demand and heavily rely on foreign animated content [58]. In addition, local productions lack innovation, the overall value chain is incomplete, the derivative market is underdeveloped [59], intellectual property (IP) protection is insufficient, and sustainable development pathways remain elusive.
Currently, China has nearly 300 million children [60] and a pan-ACG (animation, comics, and gaming) audience of nearly 500 million [7], making the country a key target for competition from major animation powers, such as the United States and Japan. The growing market demand provides ample room for the animation industry to develop. From 2020 to 2022, the number of domestically produced animated films released exceeded that of foreign films [7] (Figure 3), and the revenue gradually increased (Figure 4). Therefore, actively adjusting the industry model, maintaining steady growth, and forming a sustainable development strategy to enhance the industry’s competitiveness are key priorities for the future development of the industry.
Liu [61] compared the policies of China and the UK on the animation industry and determined that the government plays a leading role in the development of the industry. Ma et al. [62] emphasized that combining internal knowledge management and open innovation is vital in China’s animation industry. Hao et al. [63] discussed the profit model of the animation industry. Fan et al. [64] proposed an industrial development strategy centered on improving competitiveness from six aspects, including production factors and demand conditions.
In the current research literature on China’s animation industry, the focus has been primarily on the industry itself, which can be categorized into three main aspects: an overview of the industry’s development and current status, challenges and corresponding countermeasures, and the enhancement and transformation of competitiveness. Nevertheless, a deficiency in the comprehensive analysis of both internal and external factors affecting the animation industry remains, particularly in the context of the COVID-19 pandemic. For the sustainable development of the animation industry, a shift from the past strategy of “develop first, manage later” to an operational system focused on development, coordination, and sustainability is necessary. In this study, the sustainable development of the animation industry was analyzed across macro, meso, and micro levels. It is essential to focus on the internal, healthy, and coordinated development of the industry, with content creation at its core, technological innovation as a driving force, talent as the foundation, and the animation industry chain as a backbone. The continuous development of the animation industry in conjunction with social, economic, political, and cultural environments must be prioritized.
In this study, based on the current development status in the post-pandemic era, the SWOT (strength, weakness, opportunity, and threat)-PEST (political, economic, social, and technological factor) analytical model was employed to explore sustainable development strategies of the animation industry in China across macro, meso, and micro levels. The aim is to develop strategies to improve the existing system and to provide new directions for the sustainable development of the animation industry in China.

3. Methodology

The SWOT analysis, as a dominant framework in strategic management [65] (Figure 5), effectively identifies strengths, weaknesses, opportunities, and threats through a comprehensive and systematic examination of the industry environment [66,67]. It enables the development of corresponding strategies, plans, or countermeasures and helps industries explore market opportunities, identify internal obstacles, and respond effectively to competitive pressures [68], thereby formulating sustainable strategies and plans to achieve continued development.
The PEST analysis is a widely used tool for macro-environmental analyses (Figure 6). It is commonly applied in the business field to understand the external macro-environment in which organizations operate [69]. Focusing on external environmental factors that affect the industry, the PEST analysis specifically examines the impacts of political, economic, social-cultural, and technological factors on industry development prospects. This analysis provides guidance for strategic decision making, enhancing competitive advantages, and achieving a positive alignment with external forces while avoiding mistakes that could undermine effective performance [69,70]. The PEST analysis serves as an effective complement to the SWOT analysis by offering a holistic view of the industry from the inside out [71].
The SWOT analysis emphasizes the examination of internal conditions within the industry, while the PEST analysis focuses on the external environment. Therefore, the integrated SWOT-PEST model (Figure 7) provides a comprehensive approach to systematically analyze the internal strengths and weaknesses of the industry under the influence of the macro-environment as well as opportunities and threats. This integration forms the SWOT-PEST analytical matrix (Table 1), which identifies key factors influencing the development of the industry and enables the formulation of scientifically sound and effective sustainable development strategies. In this study, the SWOT-PEST model was adopted as a research tool to conduct extensive literature research on related topics. Based on the available literature, policy documents, industry reports, and previous research, we analyzed the macro-environment of the animation industry in China, along with its SWOT. Both internal and external factors were explored in-depth and systematically to offer strategic guidance for the sustainable development of the industry.

4. SWOT-PEST Analysis of the Animation Industry in China

4.1. Strengths

4.1.1. Policy Strength (SP)

Concerning policy strengths, the animation industry receives strong support from the government, which can be categorized into four areas: comprehensive, supportive, protective, and regional policies. Comprehensive policies outline the development and strategic direction of the animation industry. Supportive policies serve as a driving force for development by promoting prosperity across all links of the industry chain, typically through mechanisms such as tax incentives, fiscal support, and financial measures. Protective policies focus on regulating market order to ensure the healthy development of the industry. Regional policies are aimed at establishing animation industry bases and clusters, aggregating advantageous resources to increase industrial concentration, and promoting industrial upgrading, thus driving the rapid development of the animation industry (Table 2).

4.1.2. Economic Strength (SE)

The macroeconomic environment refers to the broad economic situation of a country or region. Economic foundations are the primary driving force behind social transformation, and continuous improvement is a fundamental condition for the positive development of the animation industry. Over the past decade, the GDP of China has doubled, surpassing RMB 126 trillion in 2023. The real growth rate stands at 5.2%, nearly double that of the United States [72]. In the first half of 2024, the GDP of China reached RMB 61.7 trillion, representing a year-on-year increase of 5.0%. The economy remained generally stable, showing steady progress and achieving high-quality development [73]. Against the backdrop of a generally favorable macroeconomic environment, the total output value of the animation industry in China exceeded RMB 300 billion in 2023. Among 20 listed and pre-listed animation companies, 18 achieved revenues exceeding RMB 10 million, 8 surpassed RMB 100 million, and the total revenue of these 20 companies grew by 86.59% compared with 2022 [74].
In terms of the market, China is currently the world’s largest producer and trader of animation and the second-largest animation consumer market globally. For instance, between 2015 and 2019, the box office revenue of Chinese animated films grew from RMB 1.9 billion to RMB 7.0 billion, and the share of domestic animated films rose from 5.4% in 2016 to 16.9% in 2019 [75]. Although the development of cinema chains was hindered during the COVID-19 pandemic, it recovered in the post-pandemic era. The year 2023 marked the most significant recovery in the film market in the past 3 years. In total, 62 new animated films were released, a year-on-year increase of 34.78%, and their cumulative box office capacity reached RMB 7.998 billion, accounting for 14.56% of the total box office [76]. The top three highest-grossing films were all produced domestically, with two exceeding RMB 1 billion in box office revenue.

4.1.3. Sociocultural Strength (SS)

China, with over 5000 years of history, holds profound cultural significance. Its rich traditional cultural resources provide abundant high-quality material for domestic and international animation works, such as the American Mulan and Kung Fu Panda series and Japan’s Chūka Ichiban and Alakazam the Great. Several outstanding domestic animated films drawing from traditional culture have also recently emerged, including Monkey King: Hero is Back, Ne Zha, and Chang’an. The incorporation and innovation of traditional culture enhance the emotional impact of animation, enriching the content and empowering the entire animation industry. This effect allows animation to transcend a mere artistic form and reach a level of deep spiritual resonance. Animation plays an important role in cultural inheritance and value guidance. It shoulders the social responsibility of promoting and carrying forward Chinese culture. In the broader context of the government’s active promotion of traditional cultural inheritance and development, not only can the animation industry achieve a harmonious coexistence with society but also gain more opportunities for international cooperation, enhancing the competitiveness of Chinese animation in the global market.

4.1.4. Technological Strength (ST)

With integrated breakthroughs in new-generation information technologies, such as big data, cloud computing, 5G, computer-generated imagery (CGI), and generative artificial intelligence (AI), the production methods, presentation formats, and audiovisual experiences of animation are set to undergo transformative changes, further enriching genres and themes. The development of 5G technology has facilitated the emergence and upgrade of Chinese animation-related software products, such as Bilibili and Tencent Animation, both of which have achieved tens of millions of downloads. Competition among various animation apps has led to significant advancements in both the quantity and quality of animation products.
In terms of production, the development of animation art is highly dependent on technological progress. In China, traditional art forms, such as ink painting, paper cutting, puppetry, and clay animation, have been integrated with modern computer animation in the digital age. For instance, particle ink technology developed by the production team of the animated film “Deep Sea” has, for the first time, combined traditional ink painting with 3D technology, simulating the brushstrokes and textures of ink in particle form to create a unique visual aesthetic. This milestone marks a revolutionary shift in digital animation technology for ink animation, using the precision of 3D algorithms to transform the imagery of ink painting into concrete forms and dynamic expressions. This breakthrough surpasses the limitations of traditional ink materials and techniques, representing a significant technological and aesthetic milestone for Chinese animation [77].

4.2. Weaknesses

4.2.1. Policy Weakness (WP)

A major policy weakness is the lack of unified macro-level regulation. Currently, the core regions of the animation industry in China are concentrated in economically developed areas, forming three major industrial clusters centered around Shanghai, Beijing, and Guangzhou. Other regions are experiencing slow or stagnant growth, leading to regional development imbalances. Most animation enterprises in China are small in scale, and the COVID-19 pandemic exacerbated the financial burdens on many small and micro-enterprises, limiting development. Government support policies tend to favor government-recognized animation enterprises. For instance, in terms of tax incentives, only government-recognized animation enterprises are eligible for the corresponding benefits. However, the criteria for recognition are highly stringent. Small- to medium-sized enterprises (SMEs) and upstream and downstream enterprises in the animation industry often do not meet these criteria. As a result, SMEs in the animation sector receive insufficient support from the government [78]. This problem not only reflects the narrow scope of current tax policies but also highlights issues within the recognition mechanism of animation enterprises.
Regarding legal regulations, IP protection remains inadequate. Although many policy documents address the protection of IP related to animation works, the actual implementation of these policies has been ineffective. As the animation industry is a knowledge-intensive, light-asset sector, IP constitutes the core resource of animation enterprises. Nevertheless, there are frequent disputes over IP rights concerning animation characters, creativity, and derivatives. One major reason is that animation characters are not explicitly protected under China’s Copyright Law [79]. Intellectual property laws provide vague regulations regarding the copyright ownership of animation characters. In addition, the legal framework’s weaknesses include low compensation standards, insufficient punitive measures, and the difficulty for rights holders to protect their interests, among other issues.

4.2.2. Economic Weakness (WE)

As the animation enterprise with the highest net profit in the first half of 2024, Huaqiang Fantawild is currently the only animation enterprise in China that operates the entire industry chain of creation, research and development, production, and sales. A complementary industry chain was established, comprising theme parks, animation works, theme performances, and cultural derivatives as their main components. However, an underdeveloped market mechanism still hinders the animation industry in China. Having emerged relatively late, the industry lacks international competitiveness, and coordination across the value chain is insufficient. The mid- to downstream segments contribute relatively little to the overall value, and a complete industrial value chain has yet to be established. Notably, there is a significant deficiency in the market promotion of derivative products. Derivative monetization is the most profitable segment of the animation industry chain [80]. It determines the commercial value and sustainability of animation works. In countries with well-established animation industries, revenue from derivative products accounts for 70% to 90% of industry profits. However, in China, investment in derivative product development is less than 10% [81], causing stagnation in the downstream segments of the industry. The primary profit model for the downstream segment is based on developing anime IPs to build a fan economy. However, this action requires upstream animation works to be well received by the market and effective promotion by platforms in the midstream segment, calling for the interdependence and collaboration of each part of the industry chain.
Financing challenges are also prevalent in the animation industry. The sector’s light-asset, high-risk, long-cycle nature makes it difficult to secure financial backing, especially in a broader market environment that prioritizes virtual economies over tangible industries. These issues create financial bottlenecks. For instance, the entire production budget for the animated film The Wind Guardians was equivalent to that of just 5 min of Coco [80]. Owing to limited funding, some creators attempt to maximize profits with minimal investment, which can negatively impact the reputation of domestic animation.

4.2.3. Sociocultural Weakness (WS)

As a knowledge- and technology-intensive industry, animation requires a large number of professionals to enhance its core competitiveness and establish a competitive advantage. Although many Chinese universities have established animation-related programs, the focus is primarily on theoretical instruction, with unclear training objectives. Graduates often lack practical skills and innovation, leading to a shortage of high-end creative and development talent [82]. The talent gap in China’s animation industry exceeds 300,000, severely hampering its development [83].
Currently, Chinese animation is in a transitional phase, shifting from a focus on content for young children to productions aimed at all age groups. However, issues such as limited themes, simple plots, and rough production quality persist, reflecting a still-undeveloped market consciousness. In China, animation is still considered primarily for children, and animated works are viewed as a means of educating and entertaining this population. This perception obscures the diversity of animation as a medium. As a result, under pressure from the dominance of foreign animation, Chinese animation often oscillates between targeting children and adults, leading to a creative bottleneck.
Currently, the overall creative capacity of the animation industry in China is relatively weak. This trait can be attributed to a shortage of creative talent. Additionally, the long-standing conservative and rigid operational model has led to low levels of creativity and the insufficient development of traditional culture and elements [64]. The use of national cultural elements tends to be superficial (i.e., they are visually appealing but lack deeper value), limiting the growth potential. These factors dampen investor enthusiasm and hinder the extension of the animation industry chain, making it difficult to form a sustainable development model. Much of China’s animation content is derived from mythology and folklore. The themes are highly concentrated, and homogenization is rampant, reflecting a lack of depth in exploring traditional cultural elements. Although the release of Ne Zha in 2019 marked a creative peak and had a significant impact, it has since been criticized for its singular thematic focus and formulaic narrative structure. Subsequent imitative work led to audience fatigue. Box office returns were disappointing, signaling a potential decline for this type of animation.

4.2.4. Technological Weakness (WT)

In the early 21st century, the maturity of 3D computer animation technology spurred development in the global animation industry. However, at that time, the animation industry in China had yet to undergo significant development, placing it at a disadvantage during this technological transformation and widening the gap between China and developed countries. Currently, the animation industry in China lacks independent innovation capabilities. Much of the technology and equipment required for animation production is imported. Technological advancements primarily rely on purchases rather than in-house research and development. There is no clear direction for technological development or an appropriate technology innovation strategy, leading to a lag in technological development [84].
Moreover, Chinese animation enterprises have a low awareness of invention patents, and their capacity for technological innovation is weak. Most patents filed are for appearance design rather than substantive technological innovations. Although the number of patent applications is increasing annually, the quality remains far behind that of developed countries, making it challenging to achieve competitiveness [85]. In addition, the low conversion rate of patented technologies in the Chinese animation industry further exacerbates the problem. Patented technologies fail to generate market value, preventing enterprises from gaining a competitive advantage from these innovations.

4.3. Opportunities

4.3.1. Policy Opportunity (OP)

With the ongoing evolution of global dynamics and the continuous advancement of globalization, economic and cultural exchanges between nations have become more frequent. In response, the Chinese government has proposed the strategic goal of building a culturally strong nation and has provided support for the development and exchange of the cultural and creative industries to facilitate the cultural “going global” strategy. The Guiding Opinions on Promoting the Innovative Development of the Digital Cultural Industry specifically include the animation industry within the broader framework of the Belt and Road Initiative (BRI) for cultural development. The BRI is not merely an economic cooperation initiative. The animation industry can leverage the cultural exchange mechanisms associated with the BRI to deepen the collaboration between culture and technology, promote the development, dissemination, and preservation of local cultural essence, stimulate new creative ideas for animation works, and enhance cultural trade. In doing so, the industry can expand its scale while enriching and expanding the strategic scope of the BRI.
In 2014, the Opinions on Accelerating the Development of International Cultural Trade introduced the “cultural export” policy, while the 2022 Opinions on Promoting the High-Quality Development of International Cultural Trade encouraged content industries to actively engage in international cultural trade and build international content platforms. The 14th Five-Year Plan for Cultural Development (2022) emphasized the need to increase the export of core cultural products and services and vigorously develop digital cultural trade. Against this backdrop, the animation industry can enhance its core competitiveness by expanding international markets and achieving a circulation between domestic and foreign markets.

4.3.2. Economic Opportunity (OE)

Lockdowns and social distancing measures during the COVID-19 pandemic altered consumer behavior, leading to a surge in the use of online platforms, which had a profound impact on consumer habits. During the lockdown period, the number of subscribers to over-the-top platforms grew by approximately 60–80% [86]. In the first 6 months of 2020, Netflix added 26 million new subscribers globally, nearly matching its total subscriber growth for 2019 [87]. A similar effect was observed in China, where the entertainment needs of internet users shifted online due to the pandemic, driving further growth in the scale of online audiovisual users. By June 2020, the number of online audiovisual users in China reached 901 million, an increase of 121 million compared with estimates in 2019. User engagement remained high even after the pandemic subsided, reaching 1.074 billion users by 2023 [88]. The shifts in consumer behavior, improved purchasing power, and continuous upgrading of mass consumption patterns have created a larger market and new opportunities for the animation industry. More animations have been produced and distributed online. In the first half of 2023 alone, 166 new domestically produced animations were released. The cumulative effective plays of non-children-oriented animations reached 45.3 billion during the same period, setting a new record [89].
At the national level, rising disposable income per capita and changes in consumption structures have provided new opportunities for the development of the animation industry. In 2023, the annual per capita disposable income of Chinese residents reached RMB 39,218, an increase of 6.3% over the previous year. The Chinese government continues to improve the market economy system and actively promotes cultural consumption. The development of new media and large-scale social platforms offers new spaces for the growth of the animation industry.

4.3.3. Sociocultural Opportunity (OS)

China has a “pan-ACG” audience of nearly 500 million [7]. The “pan-ACG” anime market caters to an older audience with higher purchasing power than the younger audience of children’s animation. As enthusiasts become more financially independent, their willingness and ability to pay for content increase steadily, creating new market opportunities for the animation industry. As young people in the “pan-ACG” space continue to rise, anime elements have become widely integrated into daily life, leading to greater societal acceptance of anime and reducing the costs of content dissemination [78]. Currently, China is experiencing a golden age of rapid growth in cultural consumption capacity and levels. As the public demand for spiritual and cultural products intensifies, the demand for anime-related products is expanding, offering significant opportunities for the development of the animation industry in China.
At the onset of the COVID-19 epidemic, the production and operations of most animation enterprises were almost at a standstill. Various commercial activities were suspended, and animation projects were delayed or unable to proceed normally [90]. However, as widespread lockdowns boosted internet traffic, the animation industry quickly adapted to the pandemic by developing new work mechanisms. Take Fantawild as an example. In response to the pandemic, Fantawild took many targeted measures and adjusted its business plan in a timely manner. Through remote work and telecommuting, production was swiftly resumed. Across the country, the number of domestic TV animation filings increased in 2020. These new work mechanisms have provided new possibilities for developing the animation industry’s supply side while improving its resilience against risks.

4.3.4. Technological Opportunity (OT)

The continuous iteration and upgrading of AI technology have brought about substantial transformations in the development of the animation industry. Generative AI is reshaping the future of animation in unprecedented ways, creating new opportunities for the industry, particularly in terms of production efficiency and design innovation. The advancement of production technologies has dramatically enhanced animation production efficiency, not only optimizing workflows but also bringing about revolutions in original design [91,92].
Moreover, AI-generated content also supports storyline development and script adaptations, opening up new possibilities for storytelling. Pixar Studios, for example, used GPT-3 in the conceptualization of the storyline for Soul. By inputting brief descriptions of the theme and required narrative elements, GPT-3 generated various innovative and compelling story outlines, providing ideas and materials for scriptwriting [93].
The continuous iteration of technology is a prerequisite for the digital transformation of the animation industry, which has led to significant changes. From Runway and Pika to PixVerse and Sora, text-to-video models are making continuous breakthroughs, and related AI applications have seen positive market responses and rapid traffic growth. On 29 February, CCTV launched the first work in its AI micro-animation series Chinese Mythology—The Myth of Nüwa Repairing the Sky. As technology continues to develop and costs decrease, AI is expected to further reduce production costs and improve efficiency in the animation industry, thereby enriching content supply and opening up new growth opportunities for the industry.

4.4. Threats

4.4.1. Policy Threat (TP)

The main threat posed by policy lies in its narrow scope. For instance, supportive policies related to the industry can stimulate the production of original animation works, resulting in rapid growth in quantity. However, during implementation, an emphasis on quantity over quality has emerged. The one-sidedness of subsidy policies may lead to unhealthy competition among enterprises, disrupting market order [94]. In terms of taxation, the policies are not comprehensive enough, failing to benefit SMEs as well as upstream and downstream enterprises in the industry chain, leading to an unfair tax structure. Moreover, the tax incentives are often aimed at short-term economic benefits, which, compared with the goal of long-term healthy development of the animation industry, may actually harm its sustainable development [95]. This action negatively impacts the sustainable development of the animation industry in China.

4.4.2. Economic Threat (TE)

In the international animation market, the United States and Japan have long held leading positions, forming a market monopoly. United States-based animated films dominate global box office revenue. Against this backdrop, the animation industry in China struggles with limited dissemination and influence in the international market. In addition, the substantial influx of foreign animations has impacted on the domestic market. Currently, China has a significant trade deficit in the animation sector and remains heavily reliant on foreign animation. As global demand increases, the domestic market share of China’s animation industry has decreased, creating a highly competitive commercial landscape. Furthermore, rampant piracy in the domestic market affects profits. Counterfeit products account for up to 50% of the market [96]. This issue further disrupts market order and undermines competitiveness. The United States and Japan control most of the global trade in animation, and South Korea has achieved a trade surplus. The experiences of these animation powerhouses have demonstrated the importance of the international market. Therefore, closing the trade gap and enhancing China’s global influence in animation are key goals for developing the industry.

4.4.3. Sociocultural Threat (TS)

The international recognition of Chinese animations in overseas markets is significantly impeded by the phenomenon of cultural discount, which arises from language barriers and cultural differences. This challenge poses a substantial obstacle to the global appeal of domestic animations. Despite achieving considerable success within China, these animations often fail to resonate with international audiences, leading to a marked contrast in their reception. For instance, the animated film Ne Zha, which enjoyed immense popularity and commercial success in China, struggled to replicate this achievement in North America, ultimately grossing only USD 3.7 million. This disparity underscores the significant impact of cultural discount on the potential of Chinese animations to engage and captivate foreign viewers.

4.4.4. Technological Threat (TT)

Technology has driven significant advancements in the animation industry, particularly in the upstream supply chain; however, it also has certain drawbacks. The use of CGI technology simplifies the production process but typically incurs higher costs and demands sophisticated skills and hardware. Over-reliance on CGI and AI technology could erode traditional aesthetic values and weaken the artistry and uniqueness commonly found in traditional animation [97]. The use of AI technology also raises ethical concerns, as learning from human-generated databases may introduce bias and stereotypes into AI systems. If AI is overused, these issues are likely to manifest in animated works. Furthermore, IP and copyright concerns are major challenges posed by AI-generated content, requiring adjustments to industry regulations and legal frameworks.
While advanced technologies have promoted the growth of the animation industry, they have also reduced job opportunities [98]. The use of technology reduces the number and workload of animators and makes those proficient in AI more sought-after. As AI becomes more deeply integrated into animation and its tasks become increasingly complex, the issue of shrinking employment opportunities will become even more pronounced [91].

5. Sustainable Development Strategies for the Animation Industry in China

This study analyzed the strengths, weaknesses, opportunities, and threats of the Chinese animation industry, constructed the SWOT-PEST analytical matrix, and proposed the SWOT strategy. SO is a growth-oriented strategy that leverages strengths and opportunities. ST is a diversified strategy that leverages strengths to address threats. WO is a transformative strategy that leverages opportunities and overcomes weaknesses. WT is a defensive strategy that overcomes weaknesses and responds to threats (Table 3).
At the macro level, the government plays a guiding role in creating a favorable environment and providing effective policies and institutional safeguards for animation enterprises. Policies should focus on improving the animation industry chain, extending fiscal subsidy policies, and providing investment and financing support to all stages of the animation industry. This work should promote industrial integration and improve financing mechanisms. Shifting the emphasis from direct subsidies to improving financing channels, the government should establish a venture capital fund for the animation industry, solidifying the financial support system and opening up funding channels for large-scale development. Establishing an industry information system would foster communication and collaboration across the industry chain, activating high-quality resources, sharing benefits, and distributing risks to maximize industrial advantages. Furthermore, the government should promote both international collaboration and domestic development. As a major animation producer, China should build cultural confidence and actively promote its outstanding works internationally. Leveraging opportunities like the BRI, China can expand its international market reach. Simultaneously, China should draw on the advanced experiences of leading animation nations, continuously enhance international cooperation, and explore new development pathways for the animation industry.
The government also regulates market order and optimizes the industrial environment. There is a need to establish an IP protection system with Chinese characteristics to enhance copyright protection. Addressing copyright issues requires the state to improve the legislative system for IP and strengthen market supervision and the IP protection of animation products, combating various forms of infringement and piracy. Improving the copyright trading system and market and establishing third-party copyright monitoring and evaluation agencies will provide comprehensive support for copyright-pledged financing, expanding the financing capacity of animation enterprises. Robust legal frameworks can maximize industry benefits and foster healthy development. Simultaneously, efforts must be made to raise awareness of IP protection, encouraging continuous innovation in the animation industry. Enhancing creators’ awareness of IP protection is essential to ensuring the high-quality development of the animation industry in China.
At the meso level, achieving sustainability requires building a complete animation industry chain and optimizing the operational model. This action includes improving the promotion, marketing, and design of derivative products across the entire animation industry chain. Accelerating the industry’s digital transformation by enhancing the application of AI technology is crucial. The strategic deployment of smart technologies across the production, marketing, and dissemination of animation products should be strengthened, hastening the pace of digital transformation and reshaping the ecosystem of the animation industry. In particular, with the rise in online platforms since the COVID-19 pandemic, the digital transformation of the animation industry can transform distribution and consumption patterns and create new content production methods and business models. At the same time, it is necessary to continuously strengthen technological research and development, explore content innovation, and enhance user experience to cope with the rapidly changing market demands.
Efforts should be made to boost acceptance in both domestic and international markets. The gradual clarification of the “adult-oriented” market for domestic animation signals a shift away from its traditional “child-focused” positioning, broadening the user base across age groups and increasing domestic market coverage. Through various cooperative strategies with overseas production enterprises, the cultural discount of Chinese animation exports should be reduced, with a focus on conveying creative content in cross-cultural contexts. Improving the low-frequency retransmission efficiency of high-context cultures will enhance the effective transmission of animation content and raise international market acceptance.
Furthermore, greater emphasis should be placed on cultivating high-level, specialized animation talent. Talent shortages are a core factor limiting industry growth. Therefore, China must intensify efforts to train multidisciplinary talent, particularly in high-tech fields, optimize the structure of its animation talent pool, and enhance the overall skill level of its workforce. This goal can be achieved by expanding channels for resource acquisition, increasing the concentration of production factors, closely aligning talent development with industry needs, strengthening collaboration between schools and enterprises, and improving mechanisms for cooperative education between industry and academia. Reforming the animation curriculum and establishing a project-based curriculum system that meets industry demands is essential. Developing a jointly administered evaluation system between schools and enterprises will align talent evaluation with industry requirements, and introducing more talent will help reduce the talent gap. Furthermore, the quality and effectiveness of training must be ensured.
At the micro level, enterprises should adhere to a content production-centric approach, enriching the cultural characteristics of animation. As the animation industry in China is undergoing a high-quality transformation, innovation efforts should be intensified to enhance creative capacities, increase cultural content, and add value to the industry. Cultural resources should be transformed into industrial and market advantages and combined with modern technologies for more novel forms of integration. Enterprises should focus on producing high-quality content, developing brands, and using branding to enhance influence. Accurate market positioning is necessary. This action helps to combine animation production with the dissemination of advanced culture. Media convergence should be utilized to create full-age-range animation products that cater to the spiritual and cultural needs of the wider public. Efforts should also be made to develop additional IP resources, establish and improve animation IP evaluation systems and mechanisms, and develop core products. A smooth organizational structure, enhanced marketing strategies, and the effective use of financing tools should be utilized to facilitate the healthy operation and growth of enterprises.
Expanding financing channels, improving financing models, and making rational use of the capital flowing into the animation industry should also be prioritized. Enhancing the financing autonomy of animation enterprises will improve their ability to manage production cycles, balance capital needs with production demands, and maximize the use of capital to produce animation works that are both appealing and widely received.

6. Conclusions

The animation industry possesses great economic value, cultural significance, and entertainment functions, making it highly representative of studying cultural and creative industries. Under the COVID-19 pandemic and post-pandemic conditions, the animation industry has demonstrated unprecedented resilience. This study reviewed the core concepts and development history of sustainable development, emphasized the pivotal role of cultural and creative industries, and summarized the current scenario of China’s animation industry. In addition, we utilized the SWOT-PEST analytical model to conduct an in-depth analysis of both internal and external factors, identified current strengths and challenges, and provided strategic support for the sustainable development of the industry. Specifically, development strategies were proposed across the macro, meso, and micro levels. At the macro level, the government should focus on providing policy guidance, maintaining market order, and optimizing the industrial environment. At the meso level, the key aims are to improve the industry chain, integrate advanced technology, and foster a specialized and diversified talent pool to achieve dual circulation in domestic and international markets. At the micro level, the emphasis is on exploring cultural characteristics, accurately targeting markets, building premium IP, and expanding financing channels, thus achieving a healthy development cycle from within the industry.

Author Contributions

Conceptualization, T.-T.F. and L.-F.Y.; methodology, T.-T.F.; writing— original draft preparation, T.-T.F. and L.-F.Y.; writing—review and editing, T.-T.F. and L.-F.Y.; funding acquisition, T.-T.F. All authors have read and agreed to the published version of the manuscript.

Funding

This research was funded by Zhejiang Sci-Tech University, grant number 22082147-Y, and the Department of Education of Zhejiang Province, grant number 23086197-F.

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

Data are contained within this article.

Conflicts of Interest

The authors declare no conflicts of interest.

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Sustainability 16 09796 g001
Figure 1. Total output value of China’s animation industry in recent years (RMB billion).
Figure 1. Total output value of China’s animation industry in recent years (RMB billion).
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Figure 2. Animation industry value chain.
Figure 2. Animation industry value chain.
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Figure 3. Number of domestic and foreign animated films released.
Figure 3. Number of domestic and foreign animated films released.
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Figure 4. Proportion of box office revenue of domestic animated films.
Figure 4. Proportion of box office revenue of domestic animated films.
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Figure 5. SWOT analysis model.
Figure 5. SWOT analysis model.
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Figure 6. PEST analysis model.
Figure 6. PEST analysis model.
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Figure 7. Integrated SWOT-PEST model.
Figure 7. Integrated SWOT-PEST model.
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Table 1. The SWOT-PEST analytical matrix.
Table 1. The SWOT-PEST analytical matrix.
SWOT-PESTPolitical (P)Economy (E)Social (S)Technology (T)
Strengths
(S)		SPSESSST
Weaknesses
(W)		WPWEWSWT
Opportunities
(O)		OPOEOSOT
Threats
(T)		TPTETSTT
Table 2. Major supportive policies for the animation industry.
Table 2. Major supportive policies for the animation industry.
Policy TypePolicy ContentKey DocumentsPublication Dates
Comprehensive policiesPropose overarching guidelines for the development of the animation industry.Several Opinions on the Development of China’s Animation Industry2004
Specify the content of the animation industry chain and create a social and market environment conducive to the healthy development of the industry.Several Opinions on Supporting the Development of Domestic Animation Industry2006
Prioritize the completion of the animation industry chain, emphasizing the importance of constructing and developing the industry chain to stimulate the potential for industry growth.National Animation Industry Development Plan during the 12th Five-Year Plan Period2012
Focus on building Chinese animation brands, extending the animation industry chain and value chain, and improving the quality of the animation industry as the primary objectives for current industry development.Cultural Industry Development Plan during the 14th Five-Year Plan Period2021
Supportive policiesTax incentives can result in certain cost reductions for animation companies. Exemptions or policies that alleviate tax burdens can promote technological innovation and industrial upgrading.Notice on Issues Concerning Tax Policies for Supporting the Development of the Animation Industry, Interim Provisions on Exempting Imported Animation Development and Production Supplies from Import Duties, Regulations on Further Supporting the Development of Cultural Enterprises, Notice from the Ministry of Finance and the State Taxation Administration on Extending VAT Policies for the Animation Industry2009, 2010, 2014, 2018
Fiscal support: establish special funds to foster key animation enterprises, support animation bases and parks, and provide financial subsidies.Interim Measures for the Administration of Special Funds for Cultural Industry Development, Notice on the Key Support Projects for the 2023 Chinese Classic Folk Story Animation Creation Program (Online Animation)2010, 2023
Improve the investment and financing environment for enterprises by providing conveniences, preferential terms, or platforms for corporate deposits, loans, investments, and guarantees, among other financial activities. Guiding Opinions on Financial Support for the Revival and Development of the Cultural Industry, Several Opinions on Encouraging and Guiding Private Investment for Healthy Development, Several Opinions on Promoting the Integration of Creative and Design Services with Related Industries
Protective policiesImpose broadcasting restrictions on foreign animation. Place strict limits on the broadcasting time and proportions of domestic versus foreign animation. Expand the platforms for broadcasting domestically produced animated television shows and implement a production filing and distribution licensing system to better regulate the production and distribution phases of the animation industry, contributing to the healthy development of the market.Specific Measures for Promoting the Development of Chinese Animation Creation, Notice on Further Standardizing the Management of Animated Television Broadcasts, Notice on Strengthening the Management of Animated Television Broadcasts2005, 2006, 2008
Regional policiesAlign the development of the animation industry with regional strengths. Establish national-level animation industry bases and research centers to enhance originality and derivative product development capabilities. Provinces and cities are also encouraged to issue policies supporting animation development based on their unique regional characteristics, in response to the national call for animation industry development.Cultural Development Outline during the 11th Five-Year Plan Period, National Animation Industry Development Plan during the 12th Five-Year Plan Period2006, 2012
Table 3. The SWOT-PEST analytical matrix of China’s animation industry.
Table 3. The SWOT-PEST analytical matrix of China’s animation industry.
SWOT-PEST Analytical MatrixStrength (S)Weakness (W)
SP: The government provides firm support.
SE: The economic environment is improving; the recovery trend after the COVID-19 pandemic is evident.
SS: Extensive cultural heritage and rich cultural material resources.
ST: Achieve technological breakthroughs.		WP: Industrial development is unbalanced; legal and regulatory protection is insufficient.
WE: The market mechanism is underdeveloped; there is a shortage of funds, and financing is difficult.
WS: The industry lacks high-end talents, the market positioning is single, and there is homogenization in the use of cultural elements.
WT: The technological means are relatively backward and lack competitiveness.
Opportunity (O)SO StrategyWO Strategy
OP: Policies promote international cultural exchanges.
OE: The COVID-19 pandemic has changed the audience’s consumption habits and structure.
OS: “pan-ACG” culture has led to the rise in new consumer groups.
OT: Artificial intelligence technology is gradually maturing.		1. Strengthen cultural exchanges and explore overseas markets.
2. Grasp the trend of sustainable development and realize the digital transformation of the industry.		1. Promote industrial integration and enhance industrial security.
2. Accurately position the market and achieve expansion across all age groups.
3. Promote cross-cultural communication and reduce cultural discounts.
Threat (T)ST StrategyWT Strategy
TP: There is one-sidedness in policy implementation.
TE: The animation market has a trade deficit; piracy divides the market.
TS: On the international market, a cultural discount exists.
TT: The excessive use of artificial intelligence technology can have negative impacts.		1. Continuously improve policies and implement macroeconomic regulation.
2. Deeply explore cultural elements and enhance supply-side innovation capabilities.		1. Strengthen protection measures and improve laws and regulations.
2. Optimize industrial operation models and achieve sustainable industrial development.
3. Strengthen talent cultivation and reduce talent gaps.
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Feng, T.-T.; Yang, L.-F. Sustainable Development of the Cultural and Creative Industries in the Post-Pandemic Era: A Case Study of the Animation Industry in China. Sustainability 2024, 16, 9796. https://doi.org/10.3390/su16229796

AMA Style

Feng T-T, Yang L-F. Sustainable Development of the Cultural and Creative Industries in the Post-Pandemic Era: A Case Study of the Animation Industry in China. Sustainability. 2024; 16(22):9796. https://doi.org/10.3390/su16229796

Chicago/Turabian Style

Feng, Ting-Ting, and Li-Fan Yang. 2024. "Sustainable Development of the Cultural and Creative Industries in the Post-Pandemic Era: A Case Study of the Animation Industry in China" Sustainability 16, no. 22: 9796. https://doi.org/10.3390/su16229796

APA Style

Feng, T. -T., & Yang, L. -F. (2024). Sustainable Development of the Cultural and Creative Industries in the Post-Pandemic Era: A Case Study of the Animation Industry in China. Sustainability, 16(22), 9796. https://doi.org/10.3390/su16229796

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