China, Netherlands Sign Co-Production Treaty

Jean-Jacques Annaud's 'Wolf Totem' was produced under the French-Chinese co-production treaty.

The deal, similar to China's agreements with France, Spain and the U.K., will see co-productions registered as Chinese movies, exempting them from foreign film quotas.

The Netherlands has become the latest country to sign a film co-production deal with China, potentially opening up the world's second-largest film market to its home-grown features.

Under the treaty signed between Amsterdam and Beijing, co-productions between the two countries will be recognized as national films on both sides. This will allow Dutch-Sino co-productions to bypass China's strict quota for foreign films, which allows just 34 titles a year into the country on a revenue-sharing basis. Nearly all of them are Hollywood studio productions, with an occasional big Russian, South Korean or Indian blockbuster added to the list. Virtually all independent films, including all European titles, sell to China on a flat fee basis, which limits any potential upside for international producers. 

Several countries have signed similar bilateral treaties in a move to gain better access to China's booming box office. It's paid off for France, which has several French-Sino hits, including Jean-Jacques Annaud's Wolf Totem, which grossed more than $110 million in China. For others, Chinese co-production treaties have been less lucrative so far.

China has co-production treaties in place with several countries, including the U.K., Canada, Spain, Italy, Australia, India and South Korea.

India's Viacom18 Motion Pictures just pulled out of Jackie Chan-starrer Kung Fu Yoga, billed as the first India-China co-production.

Under the Dutch deal, to qualify as a co-production, a film has to be financed by both Dutch and Chinese sources, with each national producer contributing no less than 10 percent and no more than 90 percent of the final budget. The Netherlands Film Fund, China's Film Bureau and the China Film Co-production Corporation all approved the treaty, so qualifying co-productions will have access to state funding from both territories.

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