Page 372 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
markets that are less economically developed. China be Chinese. In a first, the movie’s English and Mandarin
built 1,612 new cinemas in 2017, bringing its total to Chinese versions were released simultaneously in
41,179 screens. That was enough to top the U.S. total — the U.S. and China. American actor Jack Black played
40,759 screens, according to the National Association of the English-speaking panda and Chinese actor Jackie
Theatre Owners — making China the country with the Chan played his Chinese counterpart. It was a winning
most cinemas in the world (Brzeski, China Box-Office). strategy. In January 2017, Kung Fu Panda 3 opened to a
smashing $57 million first box office weekend in China
China’s passion for both domestic and international — a record for an animation there — beating the U.S.
movies follows an optimistic plotline. Its growth has opening by $16 million (Wharton). While the United
been phenomenal, outperforming China’s traditional States has roughly 100 theaters per million residents,
industries, such as manufacturing. At four times the size China has only 23 theaters per million, meaning it has
of the U.S., China’s population makes it the golden goose a long way to go before fully reaching its potential
of the film industry. Movies also are underpenetrated audience. Most executives agree that China’s box office
in China. Extending movie runs to second-, third- and will more than double the size it is now before flattening
fourth-tier cities should further propel box office out. In the not-too-distant future, Hollywood won’t be
receipts. Adding movie screens and building cinemas, the only one cranking out international hits (Faze).
especially in the smaller cities, will spur growth of the
entertainment industry in China. When a new shopping American theaters have certainly taken a more active
mall is built in China, it’s usually anchored by a theater. interest in importing some popular Chinese releases,
China is building at a rapid rate of 15 new movie screens but it’s usually a quick in-and-out on one or two screens.
daily in new and existing cinemas, up from more than That The Mermaid was considered a notable success in
three screens a day in 2012, according to the U.S. the U.S. at $1 million says quite a bit about how many
commission’s report. China currently has 31,627 screens popular Chinese releases are met across the ocean. The
while North America has approximately 39,000 screens. Mermaid made over $550 million during its Chinese
Many experts believe China is on track to have the domestic release in 2016. It was the first Chinese
largest film audience in the world as early as 2020 even production to clear the 3 billion yuan, and accounted for
though at this time the government’s annual quota of nearly half of the Chinese industry’s first-quarter 2016
foreign films is only 34 a year (Wharton). Major studios profits. This is practically the inverse of how Chinese
like Universal Studios and Dreamworks Animation and audiences take in American movies (Suzanne-Mayer).
newcomers like STX Entertainment and Jeff Robinov’s While Chinese filmmakers haven’t had too much success
Studio 8 have set up financing deals with Chinese at international box offices, that will soon change as their
companies for this exact reason (Faze). focus turns to the global market. Moreover, Chinese
production companies will be paying premiums to
American films can enter the Chinese market in three attract Hollywood talent (Faze).
ways: through revenue-sharing films, flat-fee movies
and co-producing a movie with a Chinese company. Doctor Strange’s Tibetan mystic was changed to a
The quota of 34 films applies to revenue-sharing films, Celtic woman played by Tilda Swinton. A Chinese space
which lets foreign studios take 25 percent of the box shuttle saved Sandra Bullock in Gravity. A Chinese space
office receipts or about half the norm for other parts of agency saved Matt Damon in The Martian. Transformer
the world. Flat-fee films, which have a different quota, 4 captured an action sequence in Hong Kong that
are not a popular vehicle because Hollywood sells showcases a catalog of Chinese products placements
movies for a fraction of their worth, according to the U.S. (Yang). Rogue One: A Star Wars Story features two
commission’s report. With co-productions, Hollywood Chinese actors, director-actor Jiang Wen and Hong
can bypass quotas and receive about half of ticket sales. Kong martial artist Donnie Yen. “When China was not
DreamWorks did this by opening Oriental DreamWorks the market, you just followed the American way,” says
in Shanghai with Chinese state-owned partners in 2012. Jackie Chan, who was awarded an honorary Oscar in
This co-owned studio is behind the third sequel to the hit 2016 and ranks No. 2 on Forbes’ list of the world’s best-
Kung Fu Panda. Government officials considered Kung Fu paid actors. “But these days, they ask me, ‘Do you think
Panda 3 a local Chinese film and allowed to be screened the China audience will like it?’ All the writers, producers
during the popular Chinese New Year holiday period. To — they think about China. Now China is the center of
qualify as a local film, one third of the production must everything” (Beech).
be shot in China and one third of the lead actors must
372
markets that are less economically developed. China be Chinese. In a first, the movie’s English and Mandarin
built 1,612 new cinemas in 2017, bringing its total to Chinese versions were released simultaneously in
41,179 screens. That was enough to top the U.S. total — the U.S. and China. American actor Jack Black played
40,759 screens, according to the National Association of the English-speaking panda and Chinese actor Jackie
Theatre Owners — making China the country with the Chan played his Chinese counterpart. It was a winning
most cinemas in the world (Brzeski, China Box-Office). strategy. In January 2017, Kung Fu Panda 3 opened to a
smashing $57 million first box office weekend in China
China’s passion for both domestic and international — a record for an animation there — beating the U.S.
movies follows an optimistic plotline. Its growth has opening by $16 million (Wharton). While the United
been phenomenal, outperforming China’s traditional States has roughly 100 theaters per million residents,
industries, such as manufacturing. At four times the size China has only 23 theaters per million, meaning it has
of the U.S., China’s population makes it the golden goose a long way to go before fully reaching its potential
of the film industry. Movies also are underpenetrated audience. Most executives agree that China’s box office
in China. Extending movie runs to second-, third- and will more than double the size it is now before flattening
fourth-tier cities should further propel box office out. In the not-too-distant future, Hollywood won’t be
receipts. Adding movie screens and building cinemas, the only one cranking out international hits (Faze).
especially in the smaller cities, will spur growth of the
entertainment industry in China. When a new shopping American theaters have certainly taken a more active
mall is built in China, it’s usually anchored by a theater. interest in importing some popular Chinese releases,
China is building at a rapid rate of 15 new movie screens but it’s usually a quick in-and-out on one or two screens.
daily in new and existing cinemas, up from more than That The Mermaid was considered a notable success in
three screens a day in 2012, according to the U.S. the U.S. at $1 million says quite a bit about how many
commission’s report. China currently has 31,627 screens popular Chinese releases are met across the ocean. The
while North America has approximately 39,000 screens. Mermaid made over $550 million during its Chinese
Many experts believe China is on track to have the domestic release in 2016. It was the first Chinese
largest film audience in the world as early as 2020 even production to clear the 3 billion yuan, and accounted for
though at this time the government’s annual quota of nearly half of the Chinese industry’s first-quarter 2016
foreign films is only 34 a year (Wharton). Major studios profits. This is practically the inverse of how Chinese
like Universal Studios and Dreamworks Animation and audiences take in American movies (Suzanne-Mayer).
newcomers like STX Entertainment and Jeff Robinov’s While Chinese filmmakers haven’t had too much success
Studio 8 have set up financing deals with Chinese at international box offices, that will soon change as their
companies for this exact reason (Faze). focus turns to the global market. Moreover, Chinese
production companies will be paying premiums to
American films can enter the Chinese market in three attract Hollywood talent (Faze).
ways: through revenue-sharing films, flat-fee movies
and co-producing a movie with a Chinese company. Doctor Strange’s Tibetan mystic was changed to a
The quota of 34 films applies to revenue-sharing films, Celtic woman played by Tilda Swinton. A Chinese space
which lets foreign studios take 25 percent of the box shuttle saved Sandra Bullock in Gravity. A Chinese space
office receipts or about half the norm for other parts of agency saved Matt Damon in The Martian. Transformer
the world. Flat-fee films, which have a different quota, 4 captured an action sequence in Hong Kong that
are not a popular vehicle because Hollywood sells showcases a catalog of Chinese products placements
movies for a fraction of their worth, according to the U.S. (Yang). Rogue One: A Star Wars Story features two
commission’s report. With co-productions, Hollywood Chinese actors, director-actor Jiang Wen and Hong
can bypass quotas and receive about half of ticket sales. Kong martial artist Donnie Yen. “When China was not
DreamWorks did this by opening Oriental DreamWorks the market, you just followed the American way,” says
in Shanghai with Chinese state-owned partners in 2012. Jackie Chan, who was awarded an honorary Oscar in
This co-owned studio is behind the third sequel to the hit 2016 and ranks No. 2 on Forbes’ list of the world’s best-
Kung Fu Panda. Government officials considered Kung Fu paid actors. “But these days, they ask me, ‘Do you think
Panda 3 a local Chinese film and allowed to be screened the China audience will like it?’ All the writers, producers
during the popular Chinese New Year holiday period. To — they think about China. Now China is the center of
qualify as a local film, one third of the production must everything” (Beech).
be shot in China and one third of the lead actors must
372
