Shanghai Cinemas to Receive $2.5M in Government Subsidies

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A Wanda cinema in China

The modest support measures come amid reports that thousands of movie theaters in China are in danger of permanent closure.

Cinemas in China's commercial capital of Shanghai are set to receive $2.5 million (18 million yuan) in government stimulus funds. The modest lifeline comes amid persistent reports that thousands of movie theaters in China are in danger of permanent closure.

The Shanghai Municipal Film Administration on Wednesday released a list of 345 cinemas that will receive a share of the subsidies. The amount of funds received will depend on each company's 2019 box office sales total and the number of screens in operation. The companies on the list range from small scale cinemas to sprawling multiplexes.

The theatrical film sector is hurting worldwide because of COVID-19-related business closures, but the damage has cut deeper in China than anywhere. China's vast network of 70,000 movie screens went into lockdown in late January, months ahead of similar shutdowns in North America. And while multiplexes across the U.S., Europe, Australia, Japan are either already reopen or working towards a scheduled reboot, Chinese theaters remain in limbo.

In early May, China's State Council announced that indoor entertainment facilities, including cinemas and live music venues, could resume business nationwide. But a brief flareup of coronavirus transmission in Beijing in early June cast an instant and ongoing chill over the reboot plan. Recent reports speculating that the Shanghai International Film Festival might be held in late July have renewed hopes that theaters could finally get the green light, but China's film bureau has remained mum on the matter.

Meanwhile, theater operators' financial woes continue to mount. "Although not one movie has been screened, we still face expenditures incurred by our regular maintenance of equipment and the disinfection of movie halls," Song Lihua, manager of a Shanghai Film Co. cinema, told Xinhua Wednesday.

In April, China's film bureau promised to aid the industry with tax relief measures for production, distribution and exhibition companies. But local film executives continue to complain privately that government support has been woefully in adequate in light of the scale of the crisis their industry is facing.

A survey produced this spring by China Film Association found that over 42 percent of top cinema chains are facing serious challenges — including potential closure — due to COVID-19-related business suspension. The results suggested that as many as 28,000 screens could be affected.