Support for China animation lags

Industry fails to develop despite government backing

BEIJING -- Despite government support for Chinese animation, private capital has been slow to fund the domestic sector, leaving it lagging in the wake of 2008's imported "Kung Fu Panda" success.

So far in 2009, just four Chinese animation and animation-related merchandise producers have received capital injections, according to a report released Wednesday by investment analysts at JLM Pacific Epoch.

One of the winners, Hunan-based Greatdreams Cartoon, got more than 100 million yuan ($14.6 million) earlier this month, led by the Sequoia China Fund, which added to the roughly $22 million Sequoia invested in Greatdreams starting in 2006, JLM said.

With foreign cartoons barred from China's primetime TV and domestic animation companies getting new tax breaks from the government, investors now are betting that the sector will grow.

A howl of hope came earlier this year, when "Pleasant Goat and Big Big Wolf: The Super Adventure," sold 90 million yuan ($13.2 million) worth of tickets in its first month in the theaters. It cost Guangdong-based private animation company Creative Power Entertaining Co. Ltd. only 6 million yuan ($878,000) to make.

"Its success has led audiences, industry players and even to a lesser extent investors to regain confidence in domestically produced animated films and TV series," said JLM's Elly Yan.

In June, Viacom's Nickelodeon launched the one-hour programming block ChinaToon in 13 territories across Southeast Asia, featuring made-in-China cartoons including Creative Power's five-year-old hit "Goat" series and "Magic Wonderland" from Zhejiang Zhongnan Group Animation Video Co.

China's policies boosting domestic animation helped the country produce more minutes of animation than Japan in 2008, Association of Japanese Animations data show. However, quantity doesn't equal quality, Yan said.

"Chinese teenagers remain hooked on foreign cartoons and cartoon-related merchandise," citing the fact that 19 of Chinese teens' favorite 20 cartoon characters were born overseas, according to a 2009 report by the Chinese Academy of Social Sciences. (The Monkey King was the sole Chinese representative on the list).

While Disney's "Mulan," based on Chinese legend, spawned a sequel and DreamWorks is considering a follow-up to "Kung Fu Panda" -- which raked in $560 million in global ticket sales -- China's animation industry lacks talent, originality and creativity, Yan said.

Furthermore, investors beware, Yan said -- China's toon factory also suffers from underdeveloped channels for production, broadcasting, licensing, development and sales and also from poor brand marketing and inadequate intellectual property rights protection.

Still, the Ministry of Culture claims there are 500 million potential consumers of animation in China, and "Goat" was a success, Yan said, because it referenced traditional Chinese stories with a modern twist and sold plenty of branded clothes, toys and soft drinks.

"Given the sector's great potential and strong government support, all the ingredients are in place for the domestic animation industry to take off," Yan said.