The Chinese film market has been experiencing a huge boom in the past few years, and if the recent reports coming out of the region are any indication, the numbers are destined to move even higher. New developments, including tax breaks, film funding, and other major changes to the Chinese film industry, are making it possible for the region to compete closely with Hollywood in the near future.
Of course, to say that China is on the verge of catching up with the United States and Canada (the two countries are counted together in the MPAA’s market reports) when it comes to the global share of ticket sales is still a bit of a stretch. In 2013, U.S. and Canada earned $10.9 billion at the box office while China came in a distant second at $3.6 billion. But despite the wide gap, it’s the explosive trend over the past couple of years coupled with the fact that China is not anywhere near its full potential in market share that many onlookers believe it could one day be the largest film market in the world.
In an attempt to make its domestic film business more competitive with Hollywood, the Chinese government recently outlined several measures including tax incentives and a fund for state-approved films. The Chinese finance ministry said on its website that the changes would “enhanc[e]the overall strength and competitiveness of Chinese films.” The film fund will reportedly distribute $16 million between five to ten films with “influential themes.” Additionally, “competitive films” will be offered assistance while Chinese films in general will receive added support when they move overseas, along with professional movie website design.
But it’s the tax exemptions in particular that could have a huge impact on China’s rapidly growing film market. According to THR, any income from a film company’s screenings in villages and rural areas will be completely exempt from tax. That includes income from copyright transfer, film distribution, and screenings. Similar tax exemptions will exist for film distribution in central and western China where rapid cinema expansion is already occurring and a massive population of future movie-goers exists. When paired with the government’s plan to invest in theater infrastructure and its encouragement of financial institutions to invest in the growing industry, you start to get the sense that China will edge closer to the number one box office spot sooner rather than later.