Mapping China: Film - International Cooperation and Coproduction

The pace of the Chinese film industry’s participation in international cooperation has picked up more and more in recent years. It has gradually become a trend for Chinese film enterprises to invest in and take a share of overseas films. In 2012, the Wanda Group signed a merger agreement with the world's second-largest cinema group, the USA’s AMC. The total amount of the transaction was $2.6 billion, which was split into two parts: purchasing 100% of the company’s stake and undertaking the debt. Since then, a series of important events have gradually unfolded: Ali Pictures invested in the Paramount blockbuster Mission Impossible 5; Bona invested in a series of Fox blockbusters and participated in the income-sharing of the global box office for those films; the Wanda Group acquired the U.S. film studio Legendary Entertainment; Ali invested in SM, Korea's largest entertainment company, etc. The world’s largest completion guarantee corporation, American Film Finance Co., Ltd. (FFI) settled in the Shanghai Free Trade Zone, China on 20 January, 2015. The ‘Completion Guarantee’ introduced strict international production management processes which fully opened access to the mainland film companies. The above events indicate that the Chinese film industry has been fully involved in the construction of the entire industry chain from an international perspective and has become a key node in the global network of the movie industry.

Nowadays the Chinese film industry actively responds to the government’s demand for sustainable development, which is based on structural reform on the supply side. Chinese film transfers into a new international chain of value and strengthens cross-industry integration, which provides new development opportunities and space for the upgrading of the entire value chain.

The Chinese film market will be further opened in 2017 in order to encourage foreign film companies to actively enter the Chinese market. Carrying out the localization of film production and cooperation in China will bring advanced financial concepts, advanced techniques of filmmaking and advanced marketing methods. Fast & Furious 7 did exactly that and created a new box office record. China has started to become the most important overseas market for Hollywood movies. Arranging for major moviemakers and stars to meet Chinese audiences is becoming a ‘Required Action’ for publicizing Hollywood blockbusters.

Coproductions

Chinese film entered a stage of industrialization in early 2003. Each year from then until 2010, the China Film Co-Production Corporation accepted about 30 applications for Sino-foreign coproduction film projects. Great changes took place in 2015. According to the statistics released on the website of the State Press and Publication Administration (as of 23 November 2015), the Chinese Film Bureau approved 82 Chinese and foreign coproduction projects

Thanks to the film coproduction agreements signed by the Chinese government in recent years, the number of Chinese coproduction films is increasing rapidly. At present, China has signed fully effective film coproduction agreements with the United States, Canada, Italy, Australia, France, New Zealand, Singapore, Belgium (French area), South Korea, Spain, the UK, India, Malta, the Netherlands and other countries. The most frequent Chinese and foreign coproductions are Sino-American ventures. The investment for Zhang Yimou's The Great Wall was $150 million, the largest amount currently invested in a Sino-American coproduction film.

If a film produced by China in collaboration with one or more foreign countries is recognised as a ‘Sino-foreign cooperative film production’, which can be classified as a ‘domestic film’ in China, the film is not restricted by the import quota. In addition, there are preferential tariff policies, financial aid for the film, etc. China previously had very strict regulations and requirements for coproduction films; for instance, the film script had to be a joint Sino-foreign effort, the story had to be related to China, some of the footage had to be shot in China, and at least one third of the actors had to be Chinese. With increasing instances of coproduction, the above provisions are becoming more and more flexible. Currently, film coproduction is the main avenue of Sino-foreign cooperation.

* Extensive Reading

"A foreign film has two possible routes to gain access to China’s film market: The first is to find a Chinese company to coproduce the film, enabling U.S. filmmakers to work jointly with Chinese companies to navigate the regulatory process. The second route is to subject the film to—and comply with the demands of—the rigorous tests of the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT), the Chinese agency responsible for controlling foreign film imports." -- S. O’Connor, N. Armstrong, Directed by Hollywood, Edited by China: How China’s Censorship and Influence Affect Films Worldwide, U.S.-China Economic and Security Review Commission, October 28, 2015

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