Sceneries inside the Hengdian World Studio. [Photo: baidu]

The country's film industry is the world's third largest, both in terms of the number of films produced and box office takings. But many film and TV production companies in China have entered a challenging period.

Hengdian World Studio is the largest film studio in China. Ten years ago, Hengdian was only a small town in Zhejiang Province. But now, it has earned the nickname "Chinawood". The studio consists of 13 shooting bases, which are able to serve more than 40 production teams at the same time.

But being the largest film shooting center is not enough for the people of Hengdian. They are aiming to become a major film production base. To achieve that goal, Hengdian has invited more than 400 film production companies to headquarter themselves at the studio, then problems emerged.

Liang Wenjian, deputy manager of Hongdian Film & TV Production Company, said, "We didn't have enough equipment, so that our customers got a very bad impression of our company. They thought we were not capable."

The tight budget is the root of the problem. In China, film production companies find it difficult to get loans from banks, since they don't have enough fixed assets.

Ding Shanjun, Hongdian Film & TV Production Company, said, "We have computers and techniques, but no fixed assets. And banks don't accept computers as collateral."

Analysts say that cultural industries such as film and TV production companies, even those that have been operating for a long time, have little more than a pile of scripts and films as property. But the banks will not accept these as collateral either.

And without loans, the film production firms in Hengdian find it hard to survive. It all affects the long-term development of Hengdian World Studio.