Andy Wong/Associated Press
The movie director James Cameron, center, at a signing ceremony on Aug. 8 in Beijing for a joint venture. His Cameron Pace Group will provide 3-D equipment to Chinese filmmakers.
China’s film business is booming, and foreign filmmakers have long been eager for a piece of the fastest-growing major movie market in the world. But piracy, censorship and a confusing, centrally planned industry that is instinctively hostile to foreign-made products have made it a tough market to crack.
Yet there are signs that something is shifting.
After years when going to the movies meant sitting in a drafty hall or a village square watching a film chosen by a local government committee, the Chinese middle class has embraced the idea of taking in a movie as leisure activity — one in which, increasingly, they want to choose their fare from an array of global offerings.
Chinese filmmakers, too, are slowly changing their view of foreign filmmakers from invaders to partners in expanding the market for all their products. A growing number of alliances attests to the shift in attitude. And the government, while still fiercely protecting the domestic industry, is starting to soften its stance because it wants China’s cultural importance in the world to match its economic prowess.
China’s moviegoing market is still relatively small — total ticket sales were just over $2 billion last year, compared with the $10 billion spent in the United States — but it is growing fast, by 40 percent every year, according to the State Administration of Radio, Film and Television, known as Sarft.
Revenue from film advertising is expected to rise to 20.6 billion renminbi, or $3.24 billion, this year from 16.8 billion in 2011, according to Entgroup, an industry research firm.
The country is also becoming a global player. That was underlined in May when Dalian Wanda Group bought AMC Entertainment, the second-largest U.S. theater chain, after Regal Entertainment Group, for $2.6 billion to become the world’s biggest cinema owner. It was also the biggest purchase of a U.S. company by a Chinese company to date.
A major vote of confidence in the increased internationalization of the Chinese market came in August, when James Cameron announced he was setting up a Chinese unit of his Cameron Pace Group production company.
Mr. Cameron, director of two of the three biggest-grossing films of all time in China — “Avatar” ($208 million) and “Titanic 3D” ($153 million) — is one of the few foreign filmmakers whose name is recognizable to Chinese people. Cameron Pace Group will offer Chinese filmmakers three-dimensional camera technology but will not be involved immediately in producing films.
Driving the rise of the Chinese film market has been a remarkable increase in the number of cinemas, largely due to a construction boom in commercial property that saw shopping malls, with shiny new cinema multiplexes, spring up in nearly every city.
Last year there were 803 new theaters and 3,030 screens added, an average of 8.3 new screens a day, for a total of 2,800 movie theaters and 9,200 screens across the country. Analysts expect the number of screens to reach nearly 12,000 by the end of the year, the slowdown in the real estate market notwithstanding.
The China-Hollywood co-production engine has been gathering steam since February, when, under pressure from Hollywood and the World Trade Organization, China agreed to raise the quota of imported movies by 14 films, to around 34, including 3D and Imax movies.
The deal was brokered by Xi Jinping, China’s vice president, who is widely expected to take over as president in a leadership changeover later this year. The deal also raised the amount of the box-office revenue that reverts to the studios, to 25 percent from around 16 percent.
Half a year later, the changes are showing benefits. According to official data from Sarft, total box-office receipts in China in the first half of the year are up 40 percent from a year earlier, to 8.07 billion renminbi.
Raising the quotas has increased pressure on domestic filmmakers because around two-thirds of ticket sales in the first half came from foreign films, and nine of the top 10 were from Hollywood — a result the Chinese news media labeled “a crushing defeat” and “rather embarrassing.”
Domestic filmmakers know it. “China has to improve the quality of domestic films,” said Xue Lin, vice president of Enlight Pictures, a private production company. “The output is enough” — more than 600 films will be produced in China this year, he said, “but the quality isn’t.”
Officially, Beijing is backing the domestic film industry as part of broader efforts to increase China’s “soft power,” or match its growing economic muscle in the cultural sphere. In the 12th Five-Year Plan, presented last year, the government committed itself to “deepening reform of China’s cultural industries.”
Sometimes that support looks like protectionism. For example, the government has arranged for three major Hollywood films — “The Amazing Spider-Man,” “The Dark Knight Rises” and “Prometheus” — to open within a week of each other this autumn. The timing benefited a Chinese film, “Painted Skin: The Resurrection,” which was released during the summer and became the highest-grossing Chinese film of all time, bringing in nearly $108 million.
In fact, the Hollywood-China relationship is warming so fast that film officials are getting cold feet. The deputy head of Sarft, Zhang Peiming, told domestic media in late August that some Chinese-foreign co-productions were “getting around the quota system, taking domestic investment away and threatening Chinese movies.” Mr. Zhang warned that co-productions must have one-third of their funding from China, the main cast must be Chinese, and part of the movie must be shot in China.
The Chinese film industry does still feel under siege in part because Chinese films, unlike foreign films, also must grapple with widespread piracy in their home market. That means that most Chinese movies are unable to make any money in China beyond what they earn at the box office. Foreign films, by contrast, sell into a global marketplace.
That is one reason that Chinese filmmakers believe cooperation across borders is the way forward, and that ties with foreign producers are multiplying as a means of mutual market access.
In May, News Corp. bought a 20 percent stake in Bona Film Group, a leading Chinese private production company. In August, DreamWorks Animation said it would team up with its state-owned Chinese partners to co-produce the next installment in the “Kung Fu Panda” franchise in China in 2016.
DreamWorks’ rival, Walt Disney, has also announced co-production deals in China. It said the third part of its “Iron Man” franchise would be co-produced with DMG Entertainment, which is based in Beijing and Los Angeles.
Even the hedge fund crowd is getting into the act. Legendary Pictures, a production studio founded by Thomas Tull, a private equity investor, has named Peter Loehr, the former director of the Beijing office of the Creative Artists Agency, the head of Legendary East, which aims to make blockbuster co-productions that work in China and the rest of the world.
Han Sanping, president of the China Film Group, a state-owned entity that oversees the release of imported films, has spoken about the importance of achieving a balance between making good Chinese movies and importing quality films.
“We must try and attract more foreign technologists, expertise, producers, investors, distributors, directors, actors and artists, to come and collaborate with us on high-quality co-productions,” Mr. Han said. “And then learn from them.”