Interpretation of the Film Industry Promotion Law with the Focus on Five Major Highlights

The Film Industry Promotion Law of the People’s Republic of China (hereafter referred to as the Film Industry Promotion Law or the Law) was approved by the Chinese government on November 7, 2016. It will take effect on March 1, 2017. The introduction of the Law, the first law in the Chinese cultural sector, will undoubtedly become a milestone in the development of China’s film industry.


The Film Industry Promotion Law of the People’s Republic of China (hereafter referred to as the Film Industry Promotion Law or the Law) was approved by the Chinese government on November 7, 2016. It will take effect on March 1, 2017. The introduction of the Law, the first law in the Chinese cultural sector, will undoubtedly become a milestone in the development of China’s film industry.

With regard to significance of the formulation of the Law, the head of Policy and Legal Department of State Administration of Press, Publication, Radio, Film and Television of the People’s Republic of China explained as follows: Firstly, the Law elevates China’s proven experience accumulated in the film industry for a long time to a legal system, which will serve as a strong legal guarantee for sustainable, healthy and prosperous development of the film industry. Secondly, main systems and measures specified in the Law for the following five aspects will have far-reaching influence on China’s film industry: 1. Incorporating the film industry into the national economic and social development plan, making it an important industry to drive domestic demand, promote employment and boost national economic growth; 2. Accelerating the transformation of governmental functions, streamlining administration, delegating powers, lowering film industry access threshold, enhancing enthusiasm for public participation and stimulating market’s vitality; 3. Increasing fiscal, taxation, financial and land use support and providing three-dimensional system support for the film industry; 4. Further standardizing industrial development and market order through expanding regulation scope, improving regulation measures, subdividing regulation procedures and stepping up efforts in crackdown; 5. Specifying the positive guiding role of films, protecting audiences’ legal rights and interests, encouraging enthusiasm for creation and meeting increasing spiritual and cultural demands of the people. Thirdly, as the first law in China’s cultural sector, the Law will play a positive and demonstration role in the ongoing legislation of the cultural sector.


Legislation Ideas and Highlights 

After years of development, great progress has been made in the Chinese film industry. Between 2003 and 2015, the compound growth rate of film box office was over 30%. China became the world’s second largest film market. In 2016, China’s film box office earnings exceeded RMB39 billion, with over 1.1 billion person-time audiences. In 2018, more foreign films may swarm into the Chinese film market. On the basis of the fairness principle, Chinese films will face fresh challenges. However, compared with developed markets, there is still a big gap in terms of film production quality, market order and industrial development. The status quo of “large but not strong” is to be broken.

According to the introduction by the head of the Film Administration under State Administration of Press, Publication, Radio, Film and Television of the People’s Republic of China, the Law has five legislative highlights.


Streamlining administration, delegating powers and stimulating market’s vitality

“The move of streamlining administration, delegating powers and stimulating market’s vitality is the important direction of the film industry reform.” Yan Xiaohong, Deputy Director of State Administration of Press, Publication, Radio, Film and Television of the People’s Republic of China, said. Through the formulation of the Law, reform measures (e.g., reduction of review and approval items and access relaxation) promoted in practice are included in the law. No new administrative review and approval items are added in the Law. In addition, such administrative review and approval items as review and approval of film producer and film (for one film only) shooting permit are eliminated.

The Law also strengthens ongoing and post-regulation while streamlining administration and delegating powers. As stipulated by the Law, the film registration review and screenplay outline filing shall be strengthened. The “filing evidence or approval documents” shall be issued by the film authorities.


Standardizing the market and pricking bubble

Chaotic phenomena (such as “fudging own ticket sale figures” and “bubble”) hidden behind high box office figures of Chinese films not only mislead consumers but also become stumbling blocks in healthy development of the Chinese film industry.

Regulation of box office earnings shall be strengthened. Misconducts such as false declaration and concealment of box office takings shall be punished. It is stipulated that in the Law, film distributors, cinemas and other relevant organizations shall conduct faithful statistics of film sales revenue and provide truthful and accurate data. They shall not make false transactions, falsely report/conceal sales revenue or adopt other illegal means to cheat and mislead audiences and disturb the film market order. Corresponding punishment provisions are also set forth: “If illegal earnings exceed RMB500,000, the fine will be more than one time and less than five times illegitimate earnings.”

Chaotic phenomena (such as “pornography, gambling and drug abuse” of film actors/actresses and vast overpayment) of the film industry jeopardizes the healthy atmosphere of the entire society. To strengthen filmmakers’ self-discipline, the Law prescribes that, “Personnel in the film industry should pursue both professional excellence and moral integrity, abide by laws and regulations, respect social morality, observe professional ethics, strengthen self-discipline and build good public images.”


Support for domestic films and specific provisions on fund input and screening time

Domestic films shall be supported to enable it to forge ahead on the healthy and rational track. This aspect is described at length in the Law. Creation themes, fund investment, team building and specific time periods of film screening are defined clearly.

As specified in the Law, the state supports creation and shooting of healthy theme films that disseminate outstanding Chinese culture and carry forward socialist core values; the state will guide input of special funds into relevant cultural industries and increase funds for the film industry; preferential measures shall be adopted for the film industry in terms of fiscal, taxation, land, finance and use of foreign exchange to stimulate capital input and reduce operation cost; active support shall be provided for scientific and technical R&D, personnel cultivation and overseas promotion of the film industry, so as to lay a solid industrial foundation for its development, cultivate talent echelon and expand film market space.

The Law also specifies time period requirements on screening of domestic films by cinemas: number of showings and time periods of films produced by domestic legal persons and other organizations shall be reasonably arranged, with showing time no less than two thirds of total annual showing time.

The insiders say that, relevant laws secure domestic films that are still at the development stage in terms of policy. China’s film industry has always been on the reform and opening-up road. However, in the rapidly developing market, domestic films still need support. Internationally, France and South Korea have ever implemented similar policies to protect their film industries.


Support public-welfare screening and improving watching conditions of rural areas

Support for public-welfare screening is continuously clarified in three deliberations of the Law. As set forth in the Law, the state should increase support for film screening in rural areas. The government shall provide funds to improve the public-welfare film screening service network for rural areas, actively guide participation of social capital in investment in rural screening, continuously improve rural watching conditions and meet demands of rural audiences for films. People’s governments at the country level or above shall include public-welfare film screening in rural areas in the rural public culture service system construction and give subsidies to rural public-welfare screening.

“It is of great significance to improvement of rural public culture services and helps solve the problems (such as difficult screening, low watching ratio and lack of funds) of some areas. ” said Fan Zhou, Director of Faculty of Economics and Management, Communication University of China and President of Culture Development Institute, “Organic integration of film industry and rural public culture will be an important fulcrum for developing the rural film market and is of paramount importance for elevating China’s film industry to a new height. ”

According to the Law, the education and film authorities of the State Council may jointly recommend films that are conducive to healthy growth of juveniles and take measures to support free watching by students receiving compulsory education. In this regard, the industry believes that, these efforts will reduce the difference in children film popularization among eastern, central and western regions and grant the education and film authorities responsibilities to be performed in accordance with the law.


Strengthening exchanges between China and foreign countries to help Chinese films go global

In recent years, China’s films have been frequently and widely exchanged with foreign countries. More and more films have gone global. Every year, China has been invited to hold Chinese film festivals (shows) in many countries and regions. China has also participated in international film festivals (shows), where numerous excellent domestic films have won awards. China has signed the inter-governmental film co-production agreements with multiple countries, which greatly promotes the co-production business. What’s more exciting is that, more and more domestic films are moving into overseas mainstream film markets and exploring a new path of “Chinese film screening across the world”.

The Law stresses that, on the basis of equality and mutual benefits, mutual hosting of film festivals (shows), cooperative filming, selection of outstanding domestic films for participating in overseas film festivals (shows) and other methods shall be encouraged to further expand popularity and influence of Chinese films and elevate international status of China as a film power.

According to the Law, the state should give certain financial and policy support for foreign language translation of outstanding films going global in various forms. Agencies (such as foreign affairs, culture and education) shall leverage their external exchange channels and resources to vigorously promote outstanding domestic films. Meanwhile, the state encourages multi-player and multi-form overseas promotion activities and stimulation and utilization of active social resources to the greatest extent to play an active role in overseas promotion of domestic films.


Implementation Prospects of the Law 

Developing the film industry into the pillar of national economy

The Law incorporates the film industry into the national economic and social development plan, making it an important industry to drive domestic demand, promote employment and boost national economic growth. According to the opinions of Rao Shuguang, Member of Party Leadership Group and Secretary-General of the China Film Association, China is at the key stage of economic restructuring. Promoting the cultural sector into the national pillar is an important goal of the restructuring. He said that, “For the film industry, as a type of cultural industry with the most vitality, potential and competitiveness, the importance of its system upgrade is self-evident. In its strategy implementation and advancement, current extensive growth mode must transform towards the intensive, sustainable development mode. The Law is a positive response to such demand.”

The Law will help the Chinese film industry break away from the era during which quantity and scale are simply taken as criteria and move into a new stage during which the industry development will be boosted through quality improvement. “Measures (such as encouraging original works, supporting young filmmakers, protecting intellectual property rights, supporting ethnic minority film production and improving rural public-welfare cinema lines) show that the government hopes to build a more diversified and differentiated film market to meet watching demands of audiences in different regions, at different ages and with different cultural literacies. It is of great significance to further diversification and improvement of China’s film market. ” said Rao Shuguang.


Promoting structural adjustment of the film industry

Zhou Tiedong, who had ever been engaging in promotion of Chinese films, found that, unlike Chinese simplex market structure, American film market structure was multi-leveled and multi-sector. Various types of films have their footholds. “Taking art films as an example, there is a specialty film market of art cinema lines in America. Art films are not screened in mainstream cinema lines to compete with commercial ones. They are screened in special art cinema lines for a long time.” said Zhou Tiedong, art films for the minority in any country are not in a position to go head-to-head with commercial ones for the majority. No screening arrangement is made for outstanding art films in China. It is due to market’s lack of diversity rather than film themselves. “Projection screens have exceeded 30,000 in China. It is imperative for China’s market to shift from the simplex commercial cinema line to the diversified cinema line. The precondition of achieving such structural adjustment and upgrade is the adjustment and upgrade of policies, laws and regulations.”

Zhou Tiedong hoped that, the government could take the opportunity of the Law to properly relax systems to encourage more social forces to participate in the film sector. “Film legislation is only a starting point as legislation, judiciary and law enforcements is a systematic project and their promotion role in the industry is not instant. ” he said, “The government must transform management methods, give full play to the promotion role of market in resource allocation, foster and standardize market order, delegate powers, perform management during service, and take supporting measures (fiscal, taxation, finance, land use and personnel) to drive comprehensive development of the film industry. ”

“How to further formulate and implement sound rules and specify execution criteria and degree are the issues that the governmental management needs to thin over. Besides, market-oriented economy is legal economy. Relevant workers shall enhance their legal awareness and sense and shall not violate laws for personal gains. said Rao Shuguang, “Whether the Law can be comprehensively implemented depends on the governmental management, film workers and public participation and oversight.”


Expecting realism works to return to the peak

The sentence of “The state encourages innovations in screen-writing, theme, type, mode, means, etc.” in the Law has shown its most basic attitude towards film creation. Yin Li, Vice-president of the China Film Association and famous director who has directed such realistic theme films as “Man of Iron andThe Tree in The Rain, hoped that, the introduction of the Law could drive domestic realistic them films into a new height: “Chinese filmmakers shall return to art ontology, make films really showcase our national culture, create realism works based on present hotspot issues and closely associated with ordinary audiences. This is the best way to compete against Hollywood blockbuster.”

Yin Li said that, the greatest significance of the Law is to make creation obey film, market and art laws. “Cultural resources of Chinese films are extremely abundant but film creation cannot be mentioned in the same breath. The root cause is lack of realistic expression.” said Yin Li, “Realistic theme films with artistic vitality and literature value are quite scarce.”



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