The creation of China's largest publication giant is expected to help the mainland's protected printing sector compete with international players. The state-level conglomerate China Publication Group saw 12 national publishing, printing, distribution and publication import and export units placed under one banner. The entities recorded revenue of 2.5 billion yuan (about HK$2.36 billion) last year and had assets of five billion yuan, according to Xinhua. The new company employs more than 5,000 workers. However, analysts said despite its near-monopoly position in China, it lagged behind its international competitors who were eyeing expansion into China. Bertelsmann, the foreign company with the longest history in the mainland's publication industry, established the country's largest mail-order book club. The German firm has ambitious plans to further penetrate the market following China's pledge to open retailing distribution networks. Critics said domestic players would lose out if they failed to unite and prepare for mounting competition since China's accession into the World Trade Organisation. There are more than 500 publishers in China, and book sales generated revenue of 37.7 billion yuan last year. By comparison, AOL Time Warner Book Group and Time, the publishing arm of the world's largest media company, recorded revenue of US$4.81 billion. A mainland publisher said: 'Our market size is even smaller than one single big company.' He believed it would take time to expand the Chinese market, and for domestic firms to become globally competitive. Meanwhile, domestic companies may resist government pressure to consolidate. Dong Xiuyu, president and editor-in-chief of SDX Joint Publishing, said: 'We will not give up our brands and I expect each of us will remain independent and work hard to compete with each other.' The company is one of eight publishing houses included in the new conglomerate. 'The publishers now earn a profit margin of 25 per cent while the retailers generate a margin of between 25 per cent to 30 per cent,' she said. Ms Dong said the new holding company would help the individual subsidiaries save costs. 'Maybe we can build a nationwide bookstore chain and work together in logistics,' she said. But the industry had to follow the worldwide trend to form a cross-media group with operations ranging from printing, publishing, wholesaling to retailing, she said.