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UPDATED: January 10, 2011 NO. 2 JANUARY 13, 2011
A New Era

Last year was a very important year in China's movie industry. In 2010, China's annual box-office receipts for the first time surpassed 10 billion yuan ($1.49 billion), 60 percent higher than 2009. From Avatar's great success in the Chinese market at the beginning of 2010 to China's several hit New Year films at the end of the year, the box-office success of many films in China portends a new golden era for the Chinese movie industry.

After a downturn in the 1990s, the Chinese movie industry has started to grow very rapidly. During the last seven years, China's box-office receipts have increased tenfold, from 900 million yuan ($139 million) to 10 billion yuan ($1.49 billion), representing an average annual increase of 30 percent. This rapid growth can be attributed to changes in policy affecting China's film industry, as well as the increasing growth of the Chinese economy.

Since 2003, China has unveiled a series of policies to improve the commercialization of the Chinese movie industry. As a result, the number of movies produced in China has grown rapidly each year; investment in the industry has been rising; construction of new cinema facilities has boomed; and box-office takings have increased.

According to statistics from the State Administration of Radio, Film and Television (SARFT), the number of domestic feature films increased from 100 in 2002 to 460 in 2010—making China's movie production growth rate the fastest in the world. China now also ranks third worldwide in the number of movie screens. The spike in China's box-office sales places the country among the top 10 countries in the world for movie ticket sales.

China's rapidly growing movie industry has attracted great attention from investors both at home and abroad. Financing channels for the industry are steadily increasing. In the domestic film market, the proportion of co-production is steadily rising. For example, from 2005 to 2010, films jointly made with foreign capital gradually replaced those made with Hong Kong investment. In 2007, two of the three movies whose box-office receipts surpassed 200 million yuan ($29.8 million) had foreign investment. In 2008, box-office receipts of eight foreign-invested films exceeded 100 million yuan ($14.9 million) each, with their total box-office receipts reaching 1.6 billion yuan ($238.8 million), or 40 percent of that year's total box office. In 2010, the number of such films reached 30.

Both in terms of quality and quantity, foreign-invested films have produced a virtuous cycle. Their success sets a good example for the commercialization of domestic movies and shows foreign investors the great potential of the Chinese movie industry market.

Since 2009, Chinese moviemakers have been pushing to go public both at home and abroad. In 2010, BONA Film Group, the largest private film company in China, became the first Chinese film and TV company listed on the NASDAQ stock exchange.

Last year, China sponsored 72 Chinese movie exhibitions in more than 30 countries and regions. As a result of these exhibitions, 43 Chinese films were distributed in 61 countries and regions and the overseas box-office revenues exceeded 3.5 billion yuan ($522 million).

With a population of over 1.3 billion people, demand for movies in China is huge—creating great opportunities for both domestic and foreign participants. Beginning on March 19, China will increase foreign access to the domestic movie market in accordance with an agreement between China and the WTO. This new stage will not only create a great challenge for China's movie industry, but also offer a new opportunity for its development.

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