The China story keeps getting better

WHEN Matt Damon needs to be rescued from the Red Planet in The Martian, the mission to bring him home gets a big assist from China's national space agency, which provides one of its booster rockets after Nasa's own space probe explodes during launch.

Meanwhile, Mission Impossible: Rogue Nation was financed in part by China's Alibaba Pictures - as a result, actress Zhang Jingchu makes an appearance as a CIA analyst.

On the investment front, China's Wanda Group put its financial clout (to the tune of US$30 million) behind boxing film Southpaw, which had its world premiere at this year's Shanghai International Film Festival.

And early next year when Kung Fu Panda 3 hits the screens, it will be a collaboration between DreamWorks Animation and Shanghai-based Oriental DreamWorks, marking the first time a major animated film is co-produced by a China-owned company.

What in the (film) world is going on? The Chinese are making big strides in Hollywood - in every way imaginable, according to Yu Dong, CEO of the Bona Film Group, the largest privately-owned film distributor in China and one of the significant players in the country's fast-growing film industry (along with e-commerce giant Wanda and Internet companies Alibaba, Baidu and Tencent).

"China's growth in the film industry is the largest in the world," says Mr Yu, 44, speaking through an interpreter. "In the last 10 years the country has enjoyed over 30 per cent year-on-year growth, and this year that number will be 45 per cent, with more than US$7 billion in box-office sales. At the same time, the US market is shrinking by 10 per cent per year - in 2017 China will overtake the US to become No 1."

The China card is being dealt early and often these days and everybody wants a place at the table. Vertically-integrated companies like Bona are poised to take advantage, notes Mr Yu, whose company owns 300 cinema screens and makes an average of 15 films per year, with receipts of around 3.5 billion yuan (S$768 million) and accounting for a 17 per cent slice of the market.

One Bona fide hit, as it were, was the action-comedy From Vegas to Macau II, starring Chow Yun-fat.

"We focus on indigenous content, indigenous stories," explains Mr Yu, adding that despite strict rules set by China film industry regulators, Hollywood studios are eager to gain a foothold in the country. Bona has a multi-picture co-production deal with US studio 20th Century Fox. "There are many regulations on what can and cannot be shot but I am optimistic about co-productions because they are looking for China investors. The conditions of investment include having Chinese artistes and showing positive, flattering aspects of China."

He adds: "The power shift in the global market will continue to evolve this way."

Cleavage is a no-no, along with gay sex, ghost stories and characters portrayed as archetypal bad guys. The biggest taboo subjects, of course, involve politics and the Cultural Revolution. Yu doesn't see the lifting of these restrictions anytime soon but, if ever the opportunity arose, he would want to make a biopic about Mao Zedong. "I saw a script that l liked - but I can't do it," he reveals.

Instead, he sticks to "safe" and extremely lucrative stories, such as the recent remake of romantic comedy Bride Wars.

Earlier this year, Bona teamed with Singapore-based private-equity firm Tembusu Partners and local media entrepreneur Calvin Cheng to launch a US$100 million fund in Singapore dedicated to investing in China's media entertainment industry.

"Film financing outside of China is risky but in China it's not risky if you go in with the big boys," says Mr Cheng. "Although we are leveraging on the China story, we look at media projects around the world."

According to Andy Lim, chairman of Tembusu, the fund has secured soft commitments for about US$50 million so far - including some potential strategic Singapore partners, although nothing has been formalised yet. "We're in the final stages - it took a while to get US$50 million and we're resolving some shareholding issues," says Mr Lim.

"Singapore is a good platform for human resources and bridging the gap between China and the outside world," points out Mr Yu. "Hong Kong has lost its place, Taiwan is too small, Korea too independent - and China-Japan relations are not good."

With about 400 movies exhibited in China each year and a growing number of screens - 30,000 now and increasing by 5,000 annually - the future looks bright for Bona, which is in the process of delisting from Nasdaq, with plans to relist on the Shanghai Stock Exchange. "China keeps growing, and the story is compelling," adds Mr Cheng.

"There are four main facets to filmmaking," says Mr Yu, who graduated from the Beijing Film Academy (BFA) in 1994. "What's the most important thing? To make money - the commercial aspect. Next in order of importance, it's to have the technical skills. The so-called 'artistic merit' of a film is only the third priority - without money or skill we can't make art - and lastly, it's the ability to depict humanity in films."

Mr Yu watched some 2,000 films while he was at the BFA, including Charlie Chaplin comedies, war movies and Hollywood films not available to the public, like E.T.

His biggest dream, he says, is to return to BFA - whose graduates include Fifth Generation directors Chen Kaige and Zhang Yimou - and teach. "When I turn 50, I want to be at the academy and teach everything I know about the business of movies."