A new industry report outlines problems and tries to find solutions to the cooled-down, COVID-19-hit Chinese film market.

The "China Film Investment and Financing Development Report (2021)" was officially released at the China Film Investment and Financing Summit on Sept. 22 during the 11th Beijing International Film Festival. It points out that going into 2021, the Chinese film industry and market have already resumed and, due to strict pandemic prevention and control, COVID-19's direct impact on the industry has been limited.

However, COVID-19's indirect and potential impact still lingers in terms of a lack of content and reduced enthusiasm from audiences in their resumption of going to the movies. 

During this year's seven-day Spring Festival, total box office takings reached 7.83 billion yuan ($1.21 billion) from 160 million theater admissions, an increase of 32.7% over the same period in 2019. The box office hit "Hi, Mom" topped that list, eventually taking 5.41 billion yuan in ticket sales. 

Though these numbers are a significant improvement, takings in the Chinese film market in March and April decreased sharply, with box office revenues only hitting 2.5 billion yuan and 2.49 billion yuan, respectively, down 39.82% and 47.14% from the same periods in 2019. That downward trend has continued, presenting a lukewarm summer season without any blockbuster standouts. The reports details how a lack of good content is the main cause for this trend.

The report added that imported foreign films would normally help support the market, but due to the still-raging pandemic overseas, many productions and distributions have been seriously affected. At the same time, audience enthusiasm and interest in foreign films, especially Hollywood movies, continues to decline. Therefore, hope is pinned on China's domestic productions for market growth. However, those too are mired in uncertainty given that China currently lacks popular franchises and top-rated tentpole productions.

The film market has turned cold due to a retreat in capital and the ongoing pandemic. For example, more than 90% of film-related listed companies suffered losses, with some losing billions of yuan last year alone.

With a loosening of monetary policy, government departments at all levels have introduced a series of subsidies, fee reductions, and tax reduction policies for the film industry. From the perspective of market supply, liquidity has increased significantly compared with the pandemic period last year, but the key point that remains is whether the film industry's market performance can boost confidence in capital and stimulate companies and individuals to return to film investment and financing.

Zhu Yuqing, the director of the China Film Foundation's special fund for film investment and financing development and chief editor of the report, said at the summit that he's happy to see new trends in film investment. "Dozens of film studios will co-produce one tentpole film, which shows how those inside the industry work together to walk through the difficulties, while large financial institutions, such as Bank of Beijing and Bank of China, had increased their investment and become an important force to offer help and support for the film industry when other ventures withdrew or are hesitate," Zhu said.

According to Duan Hongli, an executive with the Bank of Beijing, the bank has so far provided credit worth more than 360 billion yuan to more than 9,700 cultural enterprises. Among those, 24 billion yuan went to more than 1,000 film and television companies, marking a significant financial investment.

Huang Qunfei, the deputy general manager of Huaxia Film Distribution Co., Ltd., added that as China's film business grows bigger and bigger on the world stage, it needs more robust support from the financial sector in order to obtain larger-scale and higher-quality development. Additionally, the industry must expand in scale, improve quality and efficiency, and establish a complete and mature industrial system – all prerequisites for a more standardized and rapid development of film investment and financing.

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