The establishment of a Sino-US film company, Warner China Film,
on October 14 has been hailed as a milestone for China's film
industry, allowing foreign capital's entry into a once-exclusive
sector.
The catalogue of reforms that led to this took over a
decade.
In the past, international film companies needed to collaborate
with China Film Co-production Corporation, now the fourth
production division under the gigantic China Film Group
Corporation.
In 1991, the Ministry of Radio, Film and Television stipulated
in its circular that co-productions with foreign film studios had
to be passed by a special committee before they were given
distribution permits on the Chinese mainland.
On November 4, 1996, the State Film Bureau issued a new notice,
saying the majority of crew members for any co-production must be
Chinese citizens and at least 5 percent of performers must also be
Chinese.
Meanwhile, films from Asia or other parts of the world were
imported and distributed solely by the distribution division of the
China Film Group Corporation, previously called the China Film
Import and Export Company.
On August 9, 2003 China Huaxia Film Distribution Co. was
established to break this monopoly that had existed for half a
century.
On November 12, 1994 the American film The Fugitive
starring Harrison Ford made history as the first Hollywood
blockbuster to be screened in six major cities, on a
revenue-sharing basis.
In the following years, about 10?foreign and Hong
Kong?films were introduced to mainland moviegoers under the
same business framework.
In 2000, the government issued a notice on deepening reform in
the film sector, especially on the overhaul of cinema circuits.
Encouraged by the new policy, in June 2001, the US company
Kodak, an industry giant in photographic equipment and supplies,
opened the first foreign-invested movie multiplex Kodak Cinema
World (Shanghai) in collaboration with the state-owned Shanghai
Film Group, now called Shanghai Media Group.
On December 11, 2001 China gained entry into the World Trade
Organization(WTO) and made a commitment to further open its markets
to overseas players step by step.
Since 2002, about 20 overseas films have entered the film
market, and the quota is expected to rise to about 40 per year in
the future.
Also, within the first three years of WTO entry, international
businesses are now able to invest in cinema construction and
renovations, but cannot hold a controlling stake during the initial
period of ventures.
Only after a grace period can foreign investors increase their
shares in cinema construction, renovation and management.
On December 1 last year, the State Administration of Radio, Film
and Television issued another notice concerning joint-venture film
productions, which paved the way for the establishment of Warner
China Film.
(China Daily November 18, 2004)