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This year, the number of screens recorded 20,000 in China. The figure doubled in just two years considering the fact that China entered an era of 10,000 screens in 2012. It really exploded in numbers. 

 

In addition, the Chinese film industry posted CYN 20 billion (about USD 3.5 billion) in profits. Sales have grown 30% on average for ten years since 2004. In 2004, China had a film industry as big as that of Hong Kong. The Chinese film industry grew to the size of the Korean film industry and in 2012, outgrew Japan to become the world’s second largest film market. China's State Administration of Radio, Film and Television is planning to catch up with Hollywood within ten years and its plan seems feasible. The Chinese film industry has been rapidly growing without any slumps. 

 

Three Big Chinese Players Seek Partnership with Korean Players 
Internet platforms’ recent rush into the entertainment business is turning the Chinese film industry into a giant active volcano. According to Screen International, a fierce competition is being contested by three internet business giants in China – the internet search and portal company Baidu, the e-commerce site Alibaba and the mobile messenger and game developer Tencent. In May, Baidu signed strategic partnership with SM Entertainment to secure rights to digital music, music videos and other videos in the region of China. Alibaba launched ‘Yule Bao’, a financial product with Youku Tudou, China’s best online video platform.  People can invest in production of films or TV shows at the expense of 100 yuan (about USD 17).

 

Recently, Yule Bao also invested in Tiny Times 3 and Tiny Times 4, both of which were directed by GUO Jingming, Wolf Totem directed by FENG Shao Feng and Impossible, a 3D film directed by SUN Zhou. Tencent invested in KeyEast which manages KIM Soo-hyun who gained huge popularity through the TV drama My Love From the Star and in March, took over 28% equity in CJ Game, a game development subsidiary of CJ E&M by investing USD 500 million. Moreover, the company bought rights to web novels, webtoons and TV shows to make them into movies and TV shows (“BAT Cultural War”, Economy Insight, July 2014).

 

“Mainstream Chinese audiences are 25 to 35 years old. They are big consumers of cultural products and an internet-friendly generation. LeVision Pictures CEO ZHANG Zhao explained about why internet platform operators are bent on securing contents such as films, TV shows and music. LeVision Pictures is producing Coming Home, a new film by ZHANG Yimou.

 

Boom in Korea-China Co-Production and Differentiated Strategies   
Prior to the conclusion of the Korea-China Free Trade Agreement in Bejing on November 11th when Chinese President XI Jinping visited Korea, the two countries struck a deal on Korea-China film co-productions. The deal empowers co-productions to play in China, free from China’s import film quota system if they are approved by Korea’s Ministry of Culture, Sports and Tourism and China's State Administration of Radio, Film and Television. This agreement ignited a boom in big Chinese players’ investment in Korea.  

 

 

As mentioned above, Huace Media invested KRW 53.5 billion in NEW for 15% equity to become the second largest shareholder. Huayi Brothers hammered out a strategic agreement with Showbox with which the company produced Mr. Go, a KIM Yong-hwa film. iQIYI inked an exclusive deal to secure online screening rights to 40 films of Lotte Entertainment and 50 films of Finecut during the Busan International Film Festival. On October 21, LeVision Pictures announced that they will sign ten Korean directors for Korea-China co-production by the first half of next year. In addition to these, Chinese companies are making many moves to secure Korean contents and seek joint production with Korean filmmakers.  

 

Big changes in China can be felt everywhere. These new changes are giving a boost to Korea-China co-productions. Last year, A Wedding Invitation directed by OH Ki-hwan and jointly produced by CJ E&M and China Film Group earned CNY 190 million (about USD 33 million). Mr. Go, a joint production by Showbox and Huayi Brothers chalked up 120 million yuan (about USD 20 million) in profits. A while ago, CJ E&M produced The Peaceful Island directed by CHANG Yoon-hyun and Miss Granny directed by Leste CHEN with China’s China’s Beijing Century Media Co., Ltd., C2M, Huace and Media Asia. 

 

 

One thing to note is that CJ and Showbox approach the Chinese market with differentiated strategies. CJ E&M is very active about the Chinese market to the extent that it found CJ China to produce local contents that target Chinese audiences such as Miss Granny. “CJ is focusing on exchanging culture with China through films,” said LEE Ki-yun, the head of a team in charge of investing in and distributing films in China. “‘Localized content is a popular term at our company. The term means planning and developing attractive items for Chinese audiences and enhancing their qualities with Chinese partners.”  

 

Showbox is placing its priority on what contents the company will produce in partnership with China. “At first, Mr. Go was planned to target the Chinese market,” said SUN Young, the head of the Korean Film Team at Showbox. ”The film interested WANG Zhongjun, Chairman of Huayi Brothers who already had a connection with director KIM Yong-hwa. Therefore, WANG decided to invest in the film. Good contents are able to induce good partners. That is one of basic investment principles. The same goes for China.”

 

Adapting to a new System: Korean Directors’ Advancement into China
Not only did co-productions increase, but also more Korean directors are offered directing jobs from China. Some of them are HUR Jin-ho who directed A Good Rain Knows and Dangerous Liaisons and AN Byung-ki who directed the Bunshinsaba series, director HUH In-moo who is preparing to shoot Wedding Bible starring YOO In-na, and director PARK K.C. who will helm the Love and Lingerie project. Unlike the past where Korean technical staff members specialized in special effects, stunts and post-production work took part in Chinese films, Korean directors recently advanced into the Chinese film industry upon strong requests. 

 

“Demand and policies drove up film production, which resulted in a higher demand for directors. But top Chinese directors want high directing fees,” said Norman WANG, a Hong Kong film industry expert in charge of advising the Berlin International Film Festival about its Asian program, explaining why the Chinese film industry favor Korean directors. “On the other hand, young directors lack directing experiences.  Korean directors are culturally and geographically close to China. Many of them are proved competent.”

 

Despite such an increase in Korea-China co-production and Korean filmmakers joining Chinese projects, there are still barriers. There are differences between the natures and communication systems of the two film industries. Such differences engender problems. Chinese film shooting sites are different from Korean film shooting sites which are led by directors. Fast shooting schedule could also be hard to keep up with for Korean directors.  

 

“The volume of content that should be shot in a day bewilders Korean directors the most. The tip they should consider is to be become accustomed to the Chinese speed,” director AHN Byung-ki explained. “China’s shooting system is closer to that of Hollywood,” added LEE Ki-yun, a team leader at CJ.  

 

China Sets Its Focus on Korean Cinema’s Stories and Technology
It has been acknowledged that Chinese filmmakers want to work with Korean filmmakers to utilize Korean cinema’s fresh ideas, stories and excellent techniques. Nations culturally close to China are Hong Kong, Taiwan and Korea. But many Hong Kong films belong to genres that are difficult to produce in China,” said Abe Kwong Man-wai, the leader of the Planning and Development Team at Wanda who is planning and developing the blockbuster Tu-pa-chang-goong (斗破窓穹) with director KANG Je-kyu. “Taiwanese cinema is more artistic than commercial. But Korean cinema has various genres, is excellent at developing and planning commercial films, and has excellent human resources to make quality films. Why do cash-rich Chinese filmmakers want to work with Korean filmmakers? They are financially strong. But there is something you cannot buy with money. That is none other than stories and techniques.” 

 

“I think that Chinese investors’ excessive interest in Korea will last for two or three years at the longest,” said producer SOHN Jang-hyun who managed shooting some parts of My Way and Mr. Go in China. “Now is a good time for co-productions. So, it is important to build partnerships to maintain an amicable relationship with China.” 

 

The characteristics and culture of the Korean film industry differs from those of China. This fact brings about misunderstandings. One of such differences is the fact that producers are not allowed to share profits with investors. In China, investors take all the profit unlike Korea where investors and producers share 6:4. This is because investors are producers in China,” said ZHANG Zhao, CEO of LeVision Pictures. “Since producers’ equities are included in labor costs, we do not additionally pay profits as you do in Korea.”  

 

“Many Korean filmmakers misunderstand the Chinese market due to the fact that producers cannot claim their equities,” said producer YI Chi-yun. “But if they secure attractive stories, star actors and great directors, they will be able to sign much better deals.”

 

Chinese filmmakers are competing more fiercely than ever to survive in the Chinese market which is growing rapidly. Their success or failure hinges on securing good contents. Thus, their interest in Korea is expected to continue for now. But no one can predict how long it will last. This is because the Chinese government aims to catch up with Hollywood within ten years from now. Many Chinese filmmakers say that the Korean and Chinese film industries will be able to grow together if China’s capital and Korea’s planning and technical power are combined. This is why we need to pay attention to Chinese cinema now.