China, France sign co-production treaty

Accord signed during Sarkozy visit to China

BEIJING -- China and France on Thursday signed a long-awaited film co-production treaty in Beijing that could give Gallic filmmakers greater access to China's booming boxoffice, up 43% in 2009 to $909 million in gross ticket receipts.

In a highlight of the state visit of French President Nicolas Sarkozy to China, minister of culture and communication Frederic Mitterrand and Wang Taihua, director of China's State Administration of Radio, Film and Television, signed the film co-production agreement, a statement from the MCC in Paris said.

Two Chinese filmmakers, Wang Xiaoshuai (Chongqing Blues) and Jia Zhangke (I Wish I Knew), are competing for the Palme d'Or at the Festival de Cannes in May and the first film pact between the two nations could quickly greenlight three Sino-French feature film projects awaiting the approval of SARFT and France's Center National de la Cinematographie.

Sources in the French government told The Hollywood Reporter that Sarkozy's visit, on the eve of the opening of the Shanghai World Expo 2010, had been instrumental to the completion of the terms of the treaty, after at least six years in negotiations. Actual terms of the treaty were not immediately available.

China's boxoffice has grown by 25% on average during the past five years, buoyed by advances in the battle against film piracy, rising average incomes and the building of modern movie theaters in second- and third-tier cities.

As China's boxoffice swells, thanks to pent-up demand and a limited supply of imported films, filmmakers from Hollywood to Paris to Seoul grow increasingly interested in working with local film co-producers -- even as they complain that Beijing submits them to undue censorship and offers foreign producers a paltry profit share.

The Chinese boxoffice has outpaced the average 10% annual growth in the broader Chinese economy over the past decade, but China still limits to 20 per year the number of imports allowed to share in boxoffice receipts -- most of which typically come from Hollywood.

Because French filmmakers feel they are as qualified as any in the world to bring new stories, investment and expertise into China, the treaty will give them closer ties to SARFT and the Film Bureau, whose approval is necessary for any film wishing to skirt annual import limits and enjoy distribution by China's dominant state-run movie studio, the China Film Group.

Instead of offering international filmmakers tax breaks, China promotes its film industry by highlighting improved protection of intellectual property rights, cheap skilled labor and, increasingly, state-of-the art digital production facilities and a hungry audience willing to pay a premium to see digital, 3D and Imax films.

The treaty with France follows what the U.S. and the Motion Picture Association of America touted as a victory in November against China at the World Trade Organization. The WTO decision said China was violating international law governing distribution monopolies.

As such, China -- in theory, though not necessarily in hasty practice -- will have to open the door to more Hollywood product, giving France extra incentive to get its own favorable trade deal done.

The treaty with France is China's fourth international co-production treaty. China has had such treaties with Canada and Italy for several years and, in August 2007, signed a treaty with Australia, which gave birth to the Roger Spotiswoode war film The Children of Huangshi.

China has also taken its time negotiating similar treaties with India and Britain, documents officials at the China Film Co-Production Corp. boasted at Cannes in 2006 would be signed before the Olympics in 2008.  No updates on those documents were forthcoming.