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)