Would-be domestic and foreign companies looking to establish themselves in China's ever-growing film industry are being warned of potential challenges ahead, as more and more companies look to tap into the potentially-lucrative sector.
China's film industry is expanding fast.
In April 2015, the 5th Beijing International Film Festival witnessed the signing of 35 projects worth 2.2 billion dollars.
In the light of huge demand and gratifying profits, financial companies are quick to adapt.
Shanghai Sova Capital used to focus on private equity funding, but has turned its eyes to the film industry since 2012. Vice president He Xiaoqiu explains the challenges Sova has had to overcome after the strategic shift.
"Finance is a part of the film industry. Many major studios in Hollywood also possess finance and investment capabilities. But China's film industry is rudimentary, it’s small and there are many irregularities that impede the entry of financial capital."
Film Finances claims to be a world leader in completion guarantees. Founded in 1950, the American company offers assurance to investors that the producers will complete and deliver the films to distributors, the latest being the 2015 spy comedy film "Kingsman: the Secret Service."
April Ye, CEO of Film Finances' China Cultural Services, says the company also needs to adjust as it introduces its services in China.
"Everything here has just recently become industrialized. The film industry and also the people who are interested in doing films are new, a lot of them are from outside the industry."
Expanding business in a foreign territory can be daunting, but sometimes all it takes is a reliable partner. In March 2015, Canadian-American Entertainment Company Lionsgate and China's Hunan TV & Broadcast announced a film finance & distribution deal. Bennet Pozil, executive vice president at East West Bank who worked on the deal, highlighted the benefits for both sides.
"Hunan can learn from Lionsgate in terms of what Lionsgate does internationally, how they made English-language pictures, how they exploit them - international sales, domestic distribution in the US. Conversely, Lionsgate is able to learn from Hunan Broadcasting and TIK Films as to how to make a movie or TV show in China, how to make it successful, how to release it theatrically, how to broadcast it on satellite, or through internet streaming."
With more domestic and foreign players joining the business, there seem to be plenty of opportunities for Chinese directors. But young director Jiang Jun believes filmmakers should still stay focused on their own projects.
"Filmmakers above all need to help themselves. It costs almost nothing to write a really good story, and keep coming up with good stories is what helps filmmakers go further in their career."