China is setting up for a calculated boom in U.S. cinema. Now, box office sales in the U.S. and Canada dwarf China ($10.9 billion and $3.6 billion respectively). But a recent investment in Hollywood by a Hong Kong investment firm and tax-breaks for Chinese filmmakers indicate a shift in international cinema trends.
Fosun International, the self proclaimed largest private-owned conglomerate in Mainland China, invested an undisclosed amount (estimated $1 billion) to Studio 8, a young, Hollywood-based independent studio. Studio 8 is the brainchild of former Warner Bros. president and all-around film guru, Jeff Robinov. Fosun chariman, Guo Guangchang, hopes the costly relationship with Robinov will introduce “Hollywood’s advanced and sophisticated film making expertise and technique…into the China market, in order to drive the development of the Chinese film industry.”
It’s not just Hollywood advice China’s infant industry is getting.
Filmmakers in China are getting government support to facilitate domestic growth. Before 2012, the Asian tiger had a cap on how many foreign films could be screened at once domestically — about 20. That number has since increased to 34. A fund for state-approved movies and tax breaks has also been implemented in 2014.
According to the Hollywood Reporter:
A film company’s income from copyright transfer, film distribution, and screenings in villages and rural areas will be exempt from tax. There will also be tax exemptions from distribution in central and western China, where much of the country’s rapid cinema building is underway.”
Obviously, significant incentives to get into film. Robinov’s counsel coupled with public sector assistance will surely make China a heavy hitter in the international cinema arena; but why is the PRC concentrating on film growth?
One explanation may be a desire to export more films than they import. With more money in the pockets of Chinese workers, that means a good place to start is home. In 2012 the Asian Tiger’s Gross National Income per capita was $10.9 thousand, an immense rise from 2000’s per capita income of $2.83 thousand.
That pales in comparison to the U.S.’s $52.6 thousand in 2012, but seeing that the PRC has roughly 986 million more people, there are more moviegoers in China.
Whatever the reason, Chinese film may accompany GDP in surpassing U.S. supremacy by 2019.