SHANGHAI—In recent years, the public relations business in China has grown to 10,000 firms, and about 500,000 people, generating revenues of about RMB30 billion ($5 billion), but the next 10 years could see PR marginalized if it does not rise to the digital challenge, Blue Focus chairman and CEO Oscar Zhao told the Asia-Pacific ThinkTank Live conference in Shanghai this morning.

Zhao recalled that during his college years, there was no opportunity to study public relations as a major. Today, there are more than 20 universities in China that offer a major in PR. That’s an indication of how quickly the industry is maturing.

Zhao identified three changes that have impacted the China PR business in recent years and will pose new challenges going forward.

The first involves changes in the media landscape, and particularly the rise of social media. While China already has a robust print and broadcast media, but with 1.3 billion people in China “we have the potential for 1.3 billion media in China. That changes the way we communicate and manage media relations in the future.”

The second change has involved content, and particularly the shift away from print—the PR industry’s traditional strength—to include more social media, more digital media, and more video channels. “We need to master this technology,” says Zhao.

And the third change concerns the macro-economic picture, and whether the fast growth that the Chinese economy has seen in recent years can be sustained. There have been recent indications that the growth is slowing, and one factor that impacts the PR industry in particular is the rising cost of labor.

Zhao says he is confident that Blue Focus—which grew by close to 40 percent last year to report fees of $88 million—can continue growing: he has set a target of growing 10 times over the next 10 years. But has concerns about the PR industry as a whole.

“In China, we are seeing clients using a lot of smaller, purely digital public relations firms rather than the giant international agencies, because they already think the giant players are lagging behind,” he says. “We have to become fully digital if we are to compete.”