The extraordinary growth of the Chinese film industry has seen it emerge as a global player. The Chinese industry is looking abroad to futher its filmmaking expertise and help bring its films to an international audience. In IF’s first China Report, Jackie Keast examines what this means for Australia. As Hollywood and film industries across the world enthusiastically court the Chinese market, can we compete?
The film industry in China is booming. Within just a few years, China has become the world’s second largest market, predicted to eclipse the US in less than five years.
By 2015, annual ticket sales had reached 44 billion yuan, or $USD6.78 billion – a growth of 48.7 per cent from 2014.
While 2016 saw a slowdown, annual receipts nevertheless tallied 45.7 billion yuan by year’s end.
In 2016, 27 new screens opened across China each day, bringing the country’s total close to 40,000.
Chinese real estate and entertainment conglomerate Wanda Group is the world’s largest owner of cinemas. It owns 18 per cent of screens in China, as well as AMC in the US, Odeon and UCI in Europe, and Hoyts in Australia.
These screens need to be filled, and Wanda is not shy about its ambitions as it moves from exhibition into production. Chairman Wang Jianlin told Reuters in August his goal was “to buy Hollywood companies and bring their technology and capability to China.”
Last year, the company acquired Legendary Pictures and Dick Clark Productions, and made an alliance with Sony for tent-pole films.
Wanda is also working to lure blockbusters to shoot at its new studios, the USD $8.2 billion Qingdao Oriental Movie Metropolis. In October last year, Jianlin announced on a visit to Hollywood that Wanda would offer a 40 per cent rebate for film and TV projects shot there.
Another big Chinese player, Alibaba, recently announced it will work with Spielberg’s Amblin to co-produce and finance films for global and Chinese audiences.
This dealmaking has piqued global interest in working with China as the young industry looks to bolster its knowledge and make films that cross borders.
The big question is whether Australia is on China’s radar as US, European and Asian companies also look to aggressively form ties with China’s film industry.
China imposes a foreign film quota, with foreign studios only permitted to theatrically distribute 34 revenue-sharing films a year. A similar number of foreign titles can also be released after distributors pay a flat-fee for rights.
The fact that Australia has an official co-production treaty with China is one of our key advantages, says Screen Australia’s head of producer offset and co-production Tim Phillips, as co-productions allow films to bypass the quota.
Official co-productions can access Australian government incentives, including the Producer Offset, without having to pass the usual significant Australian content test. This means Australian producers can bring finance to the table, says Phillips.
Despite this, only a handful of co-productions have been made since the treaty entered into force in 2008; they include The Dragon Pearl, 33 Postcards, and The Children of the Silk Road (made under a MOU prior to the signing of the treaty). Nest, currently in post, and Dogfight, recently shot in Victoria, have been issued provisional approval.
That is changing, with Screen Australia beginning to see significantly increased activity in the co-pro space, says Phillips.
“A lot more people are coming to us with projects in development,” he tells IF.
However, Phillips concedes that co-productions are inherently tricky exercises that involve compromise.
“Both parties have to be on the same page creatively, both parties need to raise the finance.”
Kimble Rendall’s creature feature Nest, shot on the Gold Coast in 2016, was produced by Arclight in partnership with Loongs United Investment Company. It is the largest Australia-China co-pro so far and boasts a cast lead by Chinese megastar Li Bingbing, Kelsey Grammar and Kellen Lutz.
Speaking at a recent China-Australia Co-Production Forum at Fox Studios, producer Mark Lazarus said the China Film Co-Production Corporation (CFCC) – the body who approves co-pros on the China side – had told Arclight that Nest was the scariest co-pro it had green-lit so far.
“They impressed upon us: get this done. They said to us we were breaking down a wall,” he said.
“We were opening up the possibilities of what these co-pros can be. They don’t all need to just be gentle comedies… you can make different kinds of pictures. They were very emphatic about how they were relying on us to make this happen and to make it well.”
What does China want?
AMPCO Studios’ Mario Andreacchio directed, co-wrote and produced The Dragon Pearl with Hengdian back in 2011 – the first official film under the treaty.
AMPCO has since made China a big focus. It has established a Chinese-oriented unit within the company, and has several co-pros in development.
Since making The Dragon Pearl, Andreacchio says the market in China has rapidly expanded, and with it, competition. He fears that opportunities may become unavailable to many Australian producers without significant capital.
“Six, seven years ago Australia was one of the few countries that were seriously attempting to do co-productions with China. Now you’ve got every country in the world trying,” he tells IF.
A majority of Chinese films are financed by private equity and this means the commercial potential of a project is often far more critical than it is in Australia.
Further, the role model for many Chinese producers is Hollywood, and the “holy grail” is to make a Chinese film that will travel internationally. If Australians can’t help to achieve these aims, Andreacchio says we risk being relegated to the ‘soft diplomacy film’.
“In Australia we make really good films. But to be marketable and to make a profit you have got to be competitive. Sometimes – often, in fact – a good film is not necessarily a competitive film,” he says.
The importance of the market – and knowing what Chinese audiences want to see – was echoed by the deputy director of production at the CFCC, Wu Yue, at a recent Australia-China co-production forum.
“These films should cross national boundaries. But first things first, you must understand who your target audience are or you will have no direction,” he said.
Pauline Chan has been collaborating with the Chinese film industry for over 14 years. She directed, wrote and produced co-pro 33 Postcards with Hengdian and also produced The Dragon Pearl.
She believes the starting point for a co-production has to be a creative concept with commercial potential within China – “Otherwise you might as well make a Hollywood film and market it differently.”
Chan – who is currently in pre-production on co-pro My Extraordinary Wedding – tells IF co-productions are often “twice as hard” as a normal production.
Having to satisfy two governments has its own challenges. “To meet the two layers of guidelines is quite exhausting,” Chan says.
Despite, this, she says the opportunity to tap into China’s market is worth it.
Chinese producers are still attracted to working with us – we’re “less scary” than America and more willing to engage on a personal level, she says.
“I think Australian filmmakers are more flexible…The bigger industries, like Hollywood, are set in their own rules.”
The small screen
While the official co-production treaty only covers features, other Aussie producers, like Wildbear Entertainment’s Michael Tear, are having success in China’s equally voracious television market.
Wildbear, which specialises in factual, co-produced Story of Australia with CCTV9, Tale of Two Cities with Beijing TV, Forever Young for CCTV2, and The War That Changed the World with CCTV10.
Its latest project, Colours of China, will be made with CICC and New Zealand’s Making Movies.
“We were there when the market was opening up, and so we were able to build some relationships that way,” Tear tells IF. “We’ve been fortunate enough to keep finding opportunities to collaborate, and build on those strong relationships that we’ve established. Success begets success.”
Working with China isn’t for everyone, Tear says, and requires patience and perseverance.
“There are barriers; it’s culturally different, the regulatory environment is different, the commercial environment and the commercial terms are different. So in that context, [producers need to ask]: is it a market that’s worth pursuing?”
Further, producers need to be prepared to make multiple visits in order to invest in relationship building. “It takes time. And inevitably, that is cost as well,” Tear says.
“It just requires a fair bit of commitment and consistency. You don’t really want to do one project.”
Working a niche
One area where China is very keen to work with Australia, according to Ausfilm CEO Debra Richards, is in post, digital and visual effects (PDV).
Ausfilm helps to host the annual Australia-China Film Industry Exchange with Screen Australia and the Australian Embassy in Beijing. The event, now in its seventh year, connects Aussie filmmakers with Chinese producers and projects, and showcases what Australia has to offer.
Richards tells IF the first event was spurred by requests to the Australian embassy from Chinese filmmakers.
“They were looking at Australia particularly in [terms of] skills development and expertise in the visual effects and post space, because they felt they didn’t have it in the Chinese market,” says Richards.
Many Australian PDV companies are having success in China; Animal Logic has recently done work for Zhang Yimou’s The Great Wall and Chen Kaige’s Monk Comes Down the Mountain. Post-house Soundfirm has a Beijing office, and VFX team Fin has one in Shanghai.
While Richards concedes that eventually China will catch up to us in PDV expertise, she urges that opportunity exists right now – and that window also provides the chance to form relationships with Chinese creatives and companies which may be fruitful into the future.
Finding the right partner
Richards attributes the slow build of Australia-China co-production to the fact that, in China, you have to build relationships first.
In the early days, says Richards, there were quite a few producers trying to ‘retrofit’ projects to the Chinese market. However, she observes that “for China, a true co-production is about working together from the very beginning.”
Andreacchio says that producers will often approach China with the idea of financing a fully-developed project. Instead, he says they need to work with their Chinese partner from the concept stage.
“The successful co-productions are the ones where it’s been co-developed; where there’s been a contribution from the Chinese side,” he says. “This idea of collective ownership becomes really important.”
Tear agrees that finding the right partner should come first; requiring research and “lots of conversations”.
“The Chinese broadcasters often attend all the major markets, so you can go and talk to them about the sorts of things they do. It just requires a bit more background,” he says.
Chan describes finding the right partner as “a courtship”.
“Not necessarily all the big studios are right, and the smaller companies are not necessarily right either. It’s like a dating game”
Given the time and capital required, Andreacchio says that a long-term strategy is crucial.
“If you’re only going to do one film, it’s best to just sell the script and move on,” he says. “You need a way of actually building your own ecosystem and building relationships over a longer period of time.”
Establishing long-term relationships often means putting boots on the ground in China. It’s something Chan sought to do this year, partnering in Beijing-based production company Cheetah Yassa, headed by Chinese scriptwriter Gia Zhang.
Chan has pushed to make Australia the first country Cheetah Yassa collaborates with. It financed John V. Soto’s Love Me Twice, which shot in WA last year, and has a few TV series in pre-production to be shot here too.
Location, location, location
Richards and Phillips both agree that China is increasingly attracted to utilising Australian locations.
“That doesn’t necessarily mean red deserts. We often hear that if you’re trying to get a different looking cityscape they quite like shooting here,” says Phillips.
While not a co-production, Heyi Pictures and Village Roadshow Pictures Asia utilised Sydney for six weeks this year on Jackie Chan sci-fi Bleeding Steel.
Producer Paul Currie tells IF the film was after the “the spectacle and beauty” of Sydney’s sights – with Chan shooting a fight scene on top of the Opera House.
As the Australian producer, Currie’s role was largely to help the Chinese in setting up the right infrastructure, an experience not without challenges.
“A Western style of shooting is often not the same philosophical structure. Production scheduling and budgeting processes are different. We have a very structured way of making movies where we schedule, we lock locations, we budget to within an inch of its life,” he says.
“Whereas, the Chinese methodology is different, they’re a lot more fluid with locations; time is not as quantifiable to them.”
On the Bleeding Steel set, an actor could be replaced with a stunt double at any moment, and that meant flipping the direction – something Aussie filmmakers don’t tend to do, says Currie.
“So it’s about how you blend the Australian culture of filmmaking with the Chinese and make it a really cohesive and positive environment where it becomes a win/win.”
Currie’s work on Bleeding Steel helped him land co-pro Dogfight, for which he has partnered with Chinese producers Homber Yin and Alicia Yao Bing from Saints Entertainment.
The gangster film, expected to be released next year, saw Melbourne locations double for 1930’s Shanghai.
“It goes to show that Australia can be transformed into anywhere with the right skills, right vision and right teams of people working together.” Post will also be completed in Australia,” says Currie. Sound, picture grading and music will also be completed in Austrlia.
Working with China often requires parking Western filmmaking paradigms to help the Chinese achieve what they need, according to Currie. He predicts that the best of China working with the best of the West will create an exciting new dynamic in which different sensibilities and techniques collide.
“Why not learn from that, and see where that takes us as filmmakers?”