Reps from the two industries meet
China’s booming film biz is gearing up for a fresh injection of coin from the country’s fast-growing real estate sector after senior figures from both sides met in Beijing.
The rise of Chinese cinema is inextricably linked to the building boom, as many of the country’s 4,700 screens — China added an average of 1.65 screens per day last year — are in the new shopping malls in burgeoning downtown areas.
The real estate sector is awash with cash as it’s one of the few vehicles available to Chinese private investors, who get little return from bank deposits in a time of rising inflation; where better for the real estate sector itself to invest than in the film biz, which is yielding high returns as more theaters are built and a cinemagoing culture starts to kick in. It’s a symbiotic relationship.
To that end, there have been various gatherings between the China Real Estate Assn. and China Film Group and other orgs in the past two years, but Friday’s meeting was the highest-level yet.
The film biz was represented by La Peikang, vice director of powerful regulator the State Administration of Radio, Film and TV; Yang Buting, director of the China Film Distribution and Exhibition Assn.; China Film Group prexy Han Sanping; Huaxia Film Distribution prexy Gu Guoqing; Wanda Intl. Cinema chief Jiang Wei and the loop’s general manager, Ye Ning; and Jiang Wei from the Broadway Cinema Chain.
The property developers included Wang Daqing, VP of real estate giant Vanke, as well as China Real Estate Assn. VP Zhu Zhongyi, its general secretary Miao Leru, and reps from some 100 real estate firms.
“Producers need to work out ways to show the real estate bosses how to find profits from investing in film,” China Film Group’s Han told the meet. “This will bring more funds from real estate flowing into the film business and promote even greater development.”
Rising wealth has seen funding for Chinese movies increase and the nature of that funding change, although the usual sources remain key.
“The standing joke is that funding comes from coal mine owners with cash to burn, but it is a combination of wealthy individual investors, funds and traditional sources,” said Celestial Pictures CEO Ross Pollack.
Chinese B.O. topped $1.5 billion last year, up 40% on 2009, and a record 450 films were made and screened on the mainland, making it a serious draw for domestic investors. Feng Xiaogang’s “Aftershock” took more than $100 million domestically — the biggest gross for a local film in Chinese box office history.
“In a few years, Chinese box office will reach 50 billion yuan ($7.7 billion) no problem. Producers will learn from experiences and shoot better films to attract Chinese audiences,” Han added.
Yang praised the construction industry for including theaters in the many new commercial centers in cities around China, “which provide the development base for the film industry.”
Meanwhile, the amount of local coin underscores just how difficult it will be for Hollywood to make an impact in China when, or if, it opens up.