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Pact sets China's filmmakers fighting for silver screens

Underdogs fighting off a foreign invasion or small-time hopefuls competing against all odds for the spotlight.
/ Source: Reuters

Underdogs fighting off a foreign invasion or small-time hopefuls competing against all odds for the spotlight.

Those could be plot lines for Hollywood scripts - or the real world plight of China's movie producers, now that Beijing has approved imports of a new wave of American blockbusters.

A deal hammered out during Vice President Xi Jinping's visit to the United States last month paved the way for the import of 14 premium format films, such as IMAX or 3D, which will be exempt from China's annual quota of 20 foreign films per year.

That pleased U.S. trade officials, who were pushing China for concessions after winning a 2009 World Trade Organization dispute dealing partly with film access.

But while Chinese theatre owners are likely to welcome the opportunity to fill more seats by screening Hollywood spectacles, the deal means more competition for China's already out-gunned directors and producers on silver screens in their own country.

"The imports of these movies, I believe, will be a huge shock to Chinese filmmakers," said Qin Hong, the chairman of Stellar Megamedia, a major Chinese film producer and cinema owner.

Qin said the deal could make it very difficult for China's small film producers to survive and consolidate industry resources into the hands of a few major film conglomerates.

China was more than a year behind schedule in opening access to U.S. films following the WTO ruling, something of an outlier for China, which has complied closely with the global trade body's decisions.

The sluggish resolution also took a personal visit by Xi, who is widely expected to assume China's presidency for the next decade, underscoring the difficulties in tense U.S.-China trade relations heightened by a tepid global economy and sharpened rhetoric from U.S. politicians in an election season.

China's film industry has been growing rapidly, with box office revenues jumping more than 25 percent annually over the past decade, according to state media.

But for all the films Chinese producers are cranking out, their pull at Chinese box offices, like their budgets, often pale in comparison to big Hollywood features.

In 2011, ticket sales topped 13 billion yuan ($2.1 billion), about a fifth of U.S. theatre revenues. But almost half of that came from showings of 50 foreign films.

The rest was split among China's 791 domestic productions, the head of China's film and television watchdog said, according to state media.


Industry experts say Hollywood's looming shadow means Chinese producers will need to focus on quality over quantity if they are going to elevate their appeal to a Chinese audience.

That sentiment was echoed by Chinese director Zhang Yimou last week in a statement to media during the annual session of China's parliamentary advisory body, of which he is a member.

But even as one of China's most celebrated directors, Zhang's movies are out-performed.

His "Flowers of War" was China's top earning domestic film last year, pulling in about $74 million. That is a far cry from the country's 2011 box office favorite, the third installment of Hollywood's Transformers series -- which raked in almost $174 million, according to Artisan Gateway, a Shanghai-based Asian film consultancy.

Competing on the grounds of good scripts and quality acting is one thing, but adding the gloss and sheen of a big production requires budget and technical expertise that China currently lacks.

Christopher Bremble, who heads Beijing-based special effects firm Base-FX, said China's movie industry is playing catch-up, and certain fields, such as special effects, lag 15 years or more behind Hollywood.

Still, Bremble said China is a country of fast learners and that the new film deal could be a silver lining to spur higher quality domestic movies.

"There was a time that 'made in China' meant not very good. Now, of course, 'made in China' means iPads, iPhones, high-tech," he said, noting that the film industry is going through a similar upgrade.

A larger Hollywood footprint in China could also mean more partnership opportunities for Chinese film and production companies down the road.

Qin, of Stellar Multimedia, said film producers thanked the government for its help in resisting Hollywood's drive into the market after China joined the WTO, but that the movie deal marked an "appropriate opening", one that ultimately was needed to drive quality and creativity.

"We can't forever exist under a protective umbrella. We need to develop and expand on our own," he said.