AFM: Will China Relax Its Film Quota?

February 2017 is when the world's second-biggest film market is expected to open further

China is on track to relax its quota restricting foreign movie imports to 34 titles a year in Feb. 2017 and may expand by possibly 10 the number of non-Hollywood movies allowed into China in the meantime.

"The date February 2017 is when everyone is getting ready for the quota to go, and there is discussion about allowing more non-U.S. films in to China," an industry source told The Hollywood Reporter.

Looser quotas would benefit countries such as France – China's entry in the foreign-language category for the Oscars this year is a Sino-French co-production, The Nightingale, directed by Philippe Muyl.

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The world’s second-largest film market signed a memorandum of understanding agreement on its current quota system with the World Trade Organization in 2012, valid for five years.

China raised the number of foreign films that can be imported on a revenue-sharing basis to 34 from 20 that year. The quota system is also being applied to overseas TV programs, with streaming sites expected to register foreign TV content with the authorities.

Hollywood has long pushed for free trade in the booming Chinese film market, but Beijing fears its domestic film industry could be overwhelmed by tentpoles from the U.S.

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However, over the past few years, the box-office take has been fairly evenly divided between domestic and foreign films.
U.S. studios and other overseas players are also focusing on co-productions with Chinese partners as a way of gaining access to the market without having to go through the quota system, as co-productions qualify as domestic movies.

Senior industry figures have warned that China’s filmmakers needed to be ready to face the challenge of greater Hollywood competition. However, lifting the quota is unlikely to lead to a surge in the number of foreign movies as films will still have to pass China's strict censorship rules.

Chinese box office revenue hit $3.6 billion last year, and it is headed for $4.9 billion this year, according to the Chinese Film Producers' Association. The past few months have seen a fistful of tie-ups between U.S. and China companies, and Chinese companies are a strong presence at the American Film Market this year. 

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