New record is 29% up on 2010

SHANGHAI — China’s B.O. gross swept past $2 billion for the first time in 2011, according to the head of the country’s film bureau, a 29% hike on the previous year.

The record figure marks another muscular performance by the Chinese biz, which has grown by more than 25% every year since 2003.

Tong Gang, head of the film bureau at the State Administration of Radio, Film and TV was quoted by the official Xinhua news agency saying that B.O. receipts were 13 billion yuan ($2.07 billion) in 2011.

James Cameron’s “Avatar” made $210 million in China, and success like that has prompted renewed urgency in Hollywood to break into the market, despite Beijing’s quota system of 20 foreign films imported annually on a revenue-sharing basis, and the fact that the cut of the revenue it gets back is lower than elsewhere at around 15%. Censorship is also a significant barrier to entry for many U.S. shingles.

The booming biz is driven by massive expansion in the number of cinemas, as the growing middle classes add filmgoing to their lifestyle options.

Last year more than eight new cinema screens were added every day in China. By the end of the year the number of screens in cities nationwide had exceeded 9,200, up 33%, while the number of cinemas increased 29% to 2,800.

Of the 803 cinemas that opened last year, 90% were equipped with digital projectors.

Tong said 791 local films were released in 2011, earning $1.11 billion at the box office, about 53.6% of total ticket sales.

The figure for local movies was given a big boost late in the year by the success of Zhang Yimou’s “The Flowers of War,” starring Christian Bale. “Flowers” opened on Dec. 16 and took $78 million by the end of the year.

“Domestic production of blockbusters has become more mature, with remarkable improvements in quality,” Tong said.

Tong stressed how low-and-medium budget domestic pics were carving out a greater market share, adding that 20 domestic films made over 100 million yuan ($16 million).

Although the report stressed the success of the domestic market, it was a big year again for overseas pics.

“Transformers: Dark of the Moon” took a hefty $170 million, making it the biggest-earning movie in China last year, followed by “Kung Fu Panda 2,” which took $95 million, according to Entgroup, which compiles B.O. data in China.

Around 50 foreign movies unspooled in China last year, 20 under the quota system and the remainder on a flat-fee basis.

Among the big local performers was the $1.6 million-budget romantic comedy “Love is Not Blind,” which took $43 million. Tong described it as a “box office miracle.”

“The rise of small- and medium-budget films is challenging the dominance of blockbusters in Chinese film market,” he said. “A group of young filmmakers has stood out as a strong power and is contributing to the industry.”

China still has a large rural population and the government organized more than eight million film screenings in rural areas.

Tong said that this year there would be renewed focus on releasing better and more timely B.O. information, although he did not give any details.

He said the film bureau will “sternly penalize” theaters that manipulate B.O. revenue for their own interests, and anyone committing major transgressions or fiddling B.O. data could lose their licence.

The film bureau will also issue ticket pricing guidelines for cinemas in 2012, setting a maximum price and encouraging cinemas to increase half-price deals.

The most recent data on ticket prices is for 2010, when the average cost of a ticket was $5.30, a hefty 2% of the average city-dweller’s monthly income.

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