Hollywood lusts for China film sales, with caution
Hollywood filmmakers are joining forces with Chinese companies to gain a foothold in the Asian nation's huge movie market -- but obstacles remain in the form of commercial restrictions and censorship.
China is by far the world's fastest-growing cinema market and, despite official barriers to entry and limits on artistic freedom, the world's second-largest economy is proving a huge draw for foreign filmmakers.
Chinese box office sales rose 64 per cent last year to USD 1.5 billion, as economic woes sent the 2010 US box office down 5.72 per cent to a 13-year low of USD 10.57 billion.
In recent weeks, two of Hollywood's biggest names, Relativity Media -- producer of "The Social Network" -- and Legendary Pictures, maker of "Inception", have announced deals to make films for the Chinese market.
Both hope to produce movies that will appeal to both Chinese and wider international audiences -- a potentially lucrative plan but one that industry insiders said should nonetheless be approached with caution.
State-run companies still control the importing and distribution of foreign films in China, despite a 2009 World Trade Organisation ruling that overseas firms should be allowed greater participation.
China also protects its domestic industry by only allowing around 20 foreign movies to be screened a year, making it difficult for overseas studios to capitalise on growing demand from the country's emerging middle class.
"China lost the WTO case and is supposed to let foreign companies into distribution," said commercial lawyer Steve Dickinson, who has practised in China since 1991 and whose firm has clients in the industry.
"But the law hasn't changed -- it's just in flux and the bottom line is that everything is still subject to Beijing's approval," he told AFP.
Hollywood films are on average twice as profitable as China's local productions, but co-productions that bring foreign film-making expertise to bear are increasingly lucrative.
Working with a Chinese partner to make movies with local investment and talent allows foreign filmmakers to get around the import cap.
Foreign partners can also negotiate a larger share of the takings from co-productions, which in the first half of 2011 accounted for 32 per cent of the box office for Chinese-language films in the country, than they can for imports.
