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China’s $1.2 billion Lunar New Year box office broke world records earlier this month, but Chinese film buyers and sales agents are not jumping to interpret that as a sign of lasting market recovery, particularly for arthouse productions and indie firms.

Despite astonishing ticket sales, some 80% of the six-day holiday box office went to just the top two out of seven titles — “Detective Chinatown 3″ and ‘Hi, Mom” (pictured) — causing the others to underperform.

This, coupled with the fact that the Chinese New Year release window is uniquely popular, means that the trumpeted success “is therefore no indication that after the holiday, the theatrical market will return to what it was before the pandemic,” says Cindy Lin, CEO of indie distributor Infotainment China, which imports foreign arthouse fare.

Numerous insiders observed that one of the big impacts of the pandemic on the Chinese film market has been a greater polarization. Like the wider global economy, the local industry appears to be experiencing a K-shaped recovery in which a few players recover fully and succeed massively while others tank.

“The top films are going to become even bigger [than expected], but the medium and small ones will die a bad death — the pandemic wiped out the market for them, so they’ll basically just crash,” says Lin.

This has spooked production shingles, with many now preferring to invest in larger tentpoles and less resource-intensive TV fare rather than projects in between, further exacerbating polarization. It has also left Chinese indie buyers in a bind.

The market value for foreign imports has fallen to a third of what they were pre-pandemic, Lin estimates. When Infotainment released the Eddie Redmayne-starring “The Aeronauts” in November, it made just $3.26 million, less than a third of expectations. If the company is able to get Vadim Perelman’s Holocaust-set “Persian Lessons,” which premiered at Berlin last year, past censorship and release it as hoped for this spring, Lin would be happy to merely break even.

Many Chinese buyers who pre-bought titles before the pandemic with higher expectations of returns are now suffering. Lin will be scanning the EFM to see if sellers are adjusting prices downward to match China’s current circumstances. “We’re going to be much more conservative; regardless of price, a film must be really, really unique for us to buy,” she says.

Overall, there’s a notably smaller presence of Chinese firms and films at the 2021 EFM. One reason is that many are instead focusing on Hong Kong Filmart, a more critical market for Asia, which this year begins just 10 days after Berlin closes.

It is also due to a more general inward turn by China post-pandemic.

“What’s a bit scary is that China is revolving in on itself even more than before to focus on its own market, a sort of trend of anti-globalization,” notes Cristiano Bortone, director of the Bridging the Dragon association connecting China and Europe. He added that “with the whole buzz of the festival and its awards, market and meetings being somewhat less glossy online, Chinese players seem substantially less interested at the moment in acquiring Western movies” at the event.

One bright spot for business this year will likely be remakes, which have seen an “astonishing” upswing recently as the most expedient way for Chinese firms to acquire good content and rapidly move into production without years of development, he says.

On the sales side, Chinese players are also hitting a wall. Foreign distributors already have a backlog of 2019 product that they were unable to release in 2020, and so are simply unable to buy that many smaller new titles, regardless of their quality or appeal.

“All you can do is try to push the right films at the right time to the right people,” adaptably and proactively seeking out opportunities as they unexpectedly arise, says Jing Xu, festival manager of Chinese sales, distribution and production firm Rediance.

Larger blockbusters with a proven box office might be able to avoid this fate, says Cedric Behrel, director of London-based Chinese film distributor Trinity Cine Asia. “There’s a golden opportunity starting in April or May and running through the summer that Chinese films slotted in could potentially over-perform because of the lack of studio product” to compete with due to COVID-19 in certain overseas markets, he adds.

Meanwhile, another challenge for smaller Chinese productions is the threat of piracy. Such films, which have a limited pool of interested buyers to begin with, are “extremely wary and conservative about participating” in online festivals and screenings for fear of leaks, says Xu.

Unwilling to attend virtual festivals and unable to sell to foreign VOD platforms before their Chinese theatrical release, such films are in a bind. “If the pandemic continues and online screenings remain the norm, the lifespan of these festival-type arthouse films will be very short,” she says. “These circumstances could knock as much as a year off a film’s potential screening time, and perhaps after a year it won’t be fresh enough for mainstream festivals anyway.”

But Xu remains optimistic that things will pick up again when the global exhibition sector is in better shape. “Even if everyone at the EFM is just shopping around or hesitating, it doesn’t mean that the market has totally been decimated,” she says. “When cinemas do reopen, they’ll still need product.”

From his perch in the U.K., where a cinema reopening date has been announced amidst streams of successful vaccinations, Behrel agrees. “It feels like Berlin and Filmart are the beginning of a new era that is post-COVID, or at least post-vaccine,” he says. “There feels like a lot more positivity than at any point last year, and a feeling, rightly or wrongly, that when things reopen, there’ll be no turning back.