Obstacles, Perks of Movie Co-productions in China

VOA News
June 22,2013

BEIJING — China's movie industry is set to surpass Hollywood by revenues in just a handful of years. Much of the progress comes from relying on the world's biggest audiences, as well as on government efforts to spur investment and protect its industry. With China being noticed by many within the American movie business, VOA takes a look at how the country is managing this growing industry, and how easy it is for foreigners to get in.

This is a Chinese government building for its movie industry. One square kilometer of swamp near China's coastal city of Tianjin was turned into solid ground. On it stands an investment of over $13 million with office space, housing, film studios and animation equipment.

Ping Jiang is the founder and president of Yellow Mountain Film, a movie production company that made the newly built Tianjin studios its base.

“They have a superpower computer, which is the biggest of the world. And right now we have the directed fiber connection with that computer which is very important for CGI animation films. For the first year we do not have to pay any rent, and the second year we also get a pretty good discount on the rent. So this is an advantage.”

After working in the United States and Canada, Ping came back to China to exploit the growing business of co-productions.

“I think it's pretty challenging for co-productions. So that is why I want to build something here that is more solid. That we can be of more help for people [who] really want to come here to do co-production.”

The Chinese government allows only 34 foreign movies to be shown in theaters every year, but there is no such limit on co-productions. But securing co-production status comes with hurdles of its own. Movies need to include Chinese elements in the story, in producing and financing.

Robert Caine is a partner at a film co-production company. He says one major obstacle is censorship, and the opaque bureaucracy that comes with it.

“And it is not even much the fact of censorship itself, but the process of getting your script through and being approved. It's very difficult to predict what will happen. The rules are not very clearly defined, and it can seem very arbitrary - the decision whether a script can be approved for censorship purposes.”

Yet, the perks of co-productions are difficult to miss. Most notably, they get a 43 percent cut of the box office revenues, compared to only 25 percent for foreign movies entering the market through the yearly quotas.

Caine says on top of that, Chinese studios are eager to work with foreign talent.

“They are reaching out now. They have just made a big investment in the facilities, and they want to see it filled and used. In many cases they have overcapacity now so they would really like to bring in work from the outside and do service work. They know that their experience base is still not at the [top] level, because the industry is just newer here; so it's still not at the level that many foreign producers have. People here are eager to learn; they are especially eager to have good stories, good scripts, and good projects and stories to work on.”

Each year, no more than a handful of American movies are granted co-production status. But with more companies acting as mediators in China, industry insiders believe that not only will the number go up, but both sides will find better and more profitable ways to cooperate as well.