Beware China!

As with every other industry, it seems China is set to become the world leader in Film. The business section of The Guardian ran an interesting article yesterday about Dennis Wang Zhongjun, the founder of Huayi Brother - the production company behind such movies as The Forbidden Kingdom and Kung Fu Hustle - which is about to undergo an initial public offering. You can readthe full article here, but essentially Wang is arguing that despite two consecutive record-breaking summers in the US, the cinema-going audience in the west is already fully developed, with every film-related business fighting for a piece of the pie. Whereas in China, the market is only just starting to grow:

"About 100 million people go to cinemas, though we have 1.3 billion people," Wang said. "The number could be 300 million or even 500 million in the coming five years."

China's domestic box office in 2007 was 3.3 billion yuan, as opposed to 2.6 billion in 2006 and 2 billion in 2005. That's about a 30% increase each year. 3.3 billion yuan is only $500 million, which is small when compared to the US's $10 billion domestic, but if this growth trend continues, as Wang predicts, then western companies would do well to make more movies that also appeal to the Chinese terretory. Dreamworks' recent Kung Fu Panda is a good example. Another wise move would be more co-productions along the lines of Casey Silver Productions, Relativity Media and Huayi Brother's The Forbidden Kingdom. If you want my advice, buy shares in Huayi Brother now.* *The value of your investment may go down as well as up. Past performance is not a guarantee of future success. source - The Guardian