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Chinese people fall for Tinsel Town

Chinese people enjoy going to cinema complexes, despite weak consumption amid a recent economic slowdown.

DALIAN, China -- China's box office is growing rapidly as more consumers enjoy movies as an inexpensive form of entertainment. The growth is happening even as growth slows in China.

     To tap into this growth market, Chinese shopping mall and cinema complex operators are expanding nationwide. The move comes amid sluggish sales of luxury products due to Beijing's clampdown on graft and extravagance.

     According to Beijing-based movie market research firm EntGroup, China's box office jumped by 49% on the year to $3.26 billion for the January to June period this year. It is still behind the estimated $5.55 billion box office in North America, the world's largest.

     But China is fast catching up. In February alone, when China observed the Lunar New Year, its box office surpassed that of North America for the first time in history. Some observers predict that China will become the world's biggest movie market in the near future.

     Such rapid growth is fueled by strong ticket sales among young moviegoers and families with children. Su Bo, 28, often goes to shopping malls on the weekend with his wife and a child. They often go to watch animated movies at mall cinema complexes.

     As of the end of June, there were 27,000 movie screens in China, an increase of about 350 in just half a year, according to industry statistics.

Improved malls

In June, Dalian Wanda Group, which operates the Wanda Plaza commercial complexes, spent a total of 2.2 billion yuan ($359 million) on 15 movie theaters and a movie investment and PR firm from a Chinese company. 

     Wanda Cinema Line, a Wanda group firm, is China's largest cinema operator, with a total of 187 movie theaters across the country. Competition is intensifying among Chinese shopping mall operators amid slowing sales of expensive goods because of a government crackdown on luxury shopping and dining among official. The glut of retailers has worsened the situation. Therefore, Wanda has included cinema complexes to distinguish its shopping malls from those of competitors.

     Meanwhile, China's second-largest multiplex operator, Stellar Megamedia Group, is looking to open 120 new cinemas over the next three years, bringing the total up to 200. The company plans to increase the number of its silver screens to more than 1,000 throughout the country.

     Observers note that more movie theaters will pop up mainly in regional Chinese cities.

Hollywood craze

U.S. movies have also helped drive the growth of China's movie market. The top three blockbusters were all U.S. films during the first six months of this year, including "Fast and Furious 7," which broke China's box office record. Japanese animated film "Stand By Me Doraemon" came 10th on the box-office ranking, according to EntGroup.

     In China, about 600 domestic films hit the silver screens last year alone. But the Chinese government allows only 34 foreign films to be shown in one year. Even so, foreign films accounted for 53.5% of the total box office in the January to June period, according to EntGroup.

     China-U.S. co-productions are not categorized as foreign films. Thus, some film production studios use this "loophole" to create "foreign movies" that cater to Chinese audiences.

     In March, Huayi Brothers Media, a Beijing-based film distributor, struck a partnership deal with STX Entertainment that runs a Hollywood production studio. The China-U.S. duo have decided to make horror and action movies by next spring, with plans to release co-produced films in countries outside China. Under the deal, the two companies plan to create 18 films together by 2017.

     Meanwhile, Hunan TV & Broadcast Intermediary, based in Hunan Province, has formed a joint venture company with U.S. Lions Gate Entertainment. The Chinese company plans to spend $1.5 billion to produce 14 films over the next three years.

     U.S. film companies are paying close attention to China's expanding movie market, which analysts expect will lead to more collaborations.

     In the second half of this year, Hollywood film sequels -- "Mission: Impossible Rogue Nation" as well as "Minions" -- are scheduled for release in China. Despite weak consumption due to falling stock prices and an economic slowdown, Chinese consumers are still willing to spend 30 yuan ($4.80) to enjoy watching blockbusters on big screens.

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