The government has also introduced a series of policies encouraging private performing art agencies. The restrictions on foreign capital inflow and the requirements for license application to start up businesses in this sector have been loosened in recent years.

The development of the private companies, while challenging those that are state-owned, have also spurred their reform. One example of this is the China National Song and Dance Ensemble, a state-owned troupe with a history of more than 40 years.

"Their global tour performance, Blue Romance, has achieved success both in quality and at the box office," Liang Gang, Director of Market Department of the Ministry of Commerce. "The government is now encouraging those state-owned companies to reform as soon as possible and operate within market laws."

But the heated competition in the performing arts market has also brought about problems. Some agencies exaggerate the quality of their shows, while others introduce performances similar to what is already available, with no regard to what the market will accept.

High ticket prices

High ticket pricing is another factor hindering market development, especially in Beijing, according to industry experts.

"The audience pool in China is still small," explained Wu Peihua, Director of the Culture Section of Beijing Youth Daily. "Few tickets are actually bought by audience members, especially the higher priced tickets. In Beijing, a large percentage of tickets are given to companies or institutions as gifts," she said.

But agencies also have their own headaches. If they hope to win over audiences, they must provide quality shows. But this implies that they have to pay higher performance fees, take out more advertising and rent the best theaters. And all these costs will surely passed on to the audience. And if there is more than one agency involved in the chain, ticket prices will be even higher to ensure everyone get a cut.

Fortunately the government has actually taken measures to curb this state of affairs. In fact, a look at average prices of tickets in Beijing shows a steady decline.

According to statistics from the Beijing Performance Trade Association, the average ticket price in 2005 was around 300 yuan ($37.5), and in 2006 around 275 yuan ($36). In the first half of 2007, this was down to 245 yuan ($32.7).

The National Grand Theater has also announced it will follow a low ticket pricing policy, which is seen as a good example for others.

Cheap ticket prices enable more people to appreciate quality performances and will create a healthy environment for China's burgeoning performing arts scene.

The association reported that the income of Beijing's performance institutions in 2006 totaled 400 million yuan ($54 million), an increase of 40 percent year on year, while audience figures rose by 20 percent.

For the performing arts to flourish fully in China, high-quality shows, professional agencies and loyal audiences need to work in tandem. It's the only way that the show can go on.