AFM: China and Hollywood: Best Friends Forever?

With China's high-profile presence at AFM, insiders say the tenuous bond between the film sectors is reaching unprecedented levels of cooperation.

If there is an overriding theme to this year's American Film Market, it's China's arrival as a global film superpower. For the first time, nearly all of the country's top distributors, producers and executives are flying the flag in Santa Monica.

The country's biggest state-owned player, China Film Group, has made the trip to AFM, and such powerful private production companies and distributors as Enlight Media, Bona, Huayi Brothers and Beijing Galloping Horse Film also are on hand. The increased presence underscores just how important the Chinese market has become in the past several years.

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With its massive potential -- the nation is now building 10 movie screens a day for an estimated population of 1.35 billion -- Hollywood is leading the charge to find ways into the Chinese market. Insiders say co-productions and younger-skewing films targeting a new generation of moviegoers are the best way forward.

"Investment is slowly shifting from old-generation directors to the newcomers, and more attention is being paid to younger-generation film audiences. This is a young people's world," says Huang Ting, an industry analyst with Entgroup. "As far as cooperating for investment purposes goes, for sure there will be more companies actively cooperating with foreign production companies to help develop Chinese films."

By the end of October, domestic box office had reached $2.87 billion (17.5 billion yuan), and with the Christmas season approaching, Huang believes full-year box office in China is on track for more than $3.28 billion (20 billion yuan). China's box office should overtake the U.S.' sometime in the next five years.

"From the point of view of box office, the Chinese film market is a gradually increasing process," says Huang.

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"The increase of cinemas and screens provide further possibilities for box-office growth. As to film, new filmmakers have surfaced, and this year a few hits were directorial debuts, such as Vicky Zhao's So Young, Guo Jingming's Tiny Times and Xu Zheng's Lost in Thailand."

At AFM, Huayi Brothers is promoting movies with international casts like Control, a suspense thriller starring Chinese-American Daniel Wu, Hong Kong star Simon Yam and Taiwan's Leon Dai, while also developing homegrown franchises like Young Detective Dee, a 3D martial arts mystery set in ancient China.

"By incorporating well-known talent from Hong Kong, Taiwan and Korea as well as experienced professionals from the U.S., we hope to broaden the appeal of our films and raise the Chinese industry to new standards," says Charles Hwong, Huayi Brothers manager of international marketing and film festivals.

It's not all one-way traffic. China is looking to Hollywood for investment vehicles, and many industry watchers are waiting for the day when a Chinese firm moves to buy an American studio. The first step is to successfully produce films for the global market. To that end, Huayi Brothers is beginning to look into co-producing and co-financing films abroad.

"With the experience gained from outside projects, it would not only help us better manage the rapid growth of the China market, but it would also provide a foothold in international territories, which most definitely will play a bigger part as China's film industry begins to mature," says Hwong.

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Marc Schipper, chief operating officer of L.A.-based Exclusive Media, says many in Hollywood still see China as merely a source of money and don't approach the industry in a more holistic way.

"There is a growing trend in that direction," he says. "China now has the second biggest box office in the world. We have a number of quota film rights we are selling at the American Film Market, and we are looking at producing more films for the Chinese market."

Among the titles Exclusive has at AFM is Sam Fell's action comedy Skiptrace, featuring Seann William Scott, Jackie Chan and Fan Bingbing, which Exclusive is making with Talent International Film, the filmmaking subsidiary of Zhejiang Talent Television & Film Company Ltd.

Schipper believes Skiptrace should be a model for similar co-productions going forward. "We would make one of these a year if we could. It's more about finding the right partnerships," he says.

Dasym Investment Strategies B.V. is executive producing the movie, and Dasym's Charles Coker believes co-productions are a wonderful opportunity to cooperate with Chinese partners while also meeting strict rules about what qualifies as a co-production.

"We have two of the biggest stars in China, and the story is based in China and Hong Kong," he says. "It's a story that has all the elements for a co-production in China, and it is shot within not just the letter, but the spirit, of co-productions."

The partners also are collaborating with China Film Group on Flying Tigers, an epic action drama that tells the story of a heroic band of American pilots who volunteered to join the Chinese Air Force and fight the Japanese at the start of World War II.

For the next 12 months, expect bigger and better from China, says Huayi's Hwong. This means bigger budgets and more international casts.

Says Hwong: "Likewise, foreign films have been looking for opportunities to shoot in China in order to gain more of China's massive audience and take advantage of specific incentives. As China's policies continue to develop, more films will be looking toward China."