China banks on the movies
Call to support 'cultural industries' is answered resoundinglyBEIJING -- A flood of money for making movies has begun to flow from China's state-run banks and provincial television stations since banking and media regulators in Beijing this year encouraged them to invest in cultural industries.
"There's an unbelievable amount of hot money coming into movies in China," said Jeffrey Chan, the Hong Kong film sales veteran who now heads the Beijing-based company Distribution Workshop.
Based on the growth potential of the Chinese movie audience, companies such as distributor Polybona Films, with which Chan is working closely, are moving strongly toward film production.
Polybona recently got an interest-free loan from the Bank of Beijing, Chan says -- a wise investment, perhaps, as movie ticket sales in China rose 27% in 2008. That was led not by Hollywood imports but by domestic films, which earned $376 million, or 60% of the total pot.
The success of films such as Gordon Chan's "Painted Skin" in 2008 has helped open investors' eyes and dispel years of skepticism about the viability of China -- not just Chinese-speaking Southeast Asia -- as a sustainable movie market.
"All of a sudden, people were making money from just China," said Chan, who adds that he spends much of his day fending off calls about Polybona's plans to make 20 films, each costing between $1 million-$20 million. " 'Is there a movie for me to invest in?' they ask."
When it comes to funding films in a recession, central planning is not all bad. In February, just ahead of China's annual legislative session, the central bank's vice governor Ma Delun called for "financial support to cultural industries."
But by then, well into the global financial crisis, spending had begun, with Chinese banks making 1.6 trillion yuan in new loans across the economy in January -- more loans than they did in the first quarter of 2008.
Another source of money hopping on China's big-screen bandwagon is coming from small-screen companies -- television stations in China's provinces whose advertising revenue has risen with the country's decade-long economic boom.
The Shanghai Media Group, led by CEO Li Ruigang put money into "Dark October," the $20 million first picture from Hong Kong producer Peter Chan's new Beijing-based Cinema Popular. The film, which director Teddy Chan starts shooting in Shanghai in March, tells the story of a 1905 conflict between bodyguards trying to protect -- and assassins trying to kill -- Chinese nationalist leader Sun Yat-sen.
And other TV money came in to back director Lu Chuan's latest movie, "Nanking! Nanking!" about the Japanese army's pillaging of the capital of Jiangsu province during World War II.
Zhou Li, Jiangsu Broadcasting Corp.'s powerful female director general, was central to making the film, offering 20 million yuan ($2.9 million) and support from the station's slew of TV producers. "Jiangsu Brodcasting has been a great partner and is providing a wonderful platform to help me promote the film," said Lu, who hopes to finish editing in time for May's Cannes Film Festival.
The TV sector's money was unleashed, industry sources say, when media regulators in Beijing recently consolidated responsibility for filmed entertainment under the State Administration of Radio Film and Television.
With a streamlined avenue to getting movies to China's growing movie audience, it appears there also are other TV players getting into the game, albeit more quietly. They include powerhouse Hunan TV, where Li Xiang, the popular female emcee of the contest show "Super Girl Voice," is building a film company. China Central Television itself is said to be looking to get into big-screen production through its movie channel, CCTV-6.