China’s National People’s Congress issued a draft of the Film Industry Promotion Law for public comment on November 6, 2015. The law is to apply to “film activities” such as film development, production, distribution and release within the PRC. The published annotations indicate the law is intended to simplify the regulation of screenplays, film productions and exhibitions and the holding of foreign-related film festivals.
Fundamental changes to the existing regulatory framework, as it affects foreigners, are not proposed in the draft law. Foreigners will still be prevented from engaging independently in film production in China. Foreigners will still be prevented from engaging in film distribution in China. No mention is made of any lifting of the quota on importing foreign films on a revenue-sharing basis. Still, many of the changes would definitely streamline the official co-production process for foreign producers. There is also now express official recognition of the need for improvements in the system of film finance and the need for tax incentives for local producers.
From our perspective as China film lawyers, the most interesting features of the draft law are as follows:
- A screenplay will no longer be subject to approval if the film will deal with “general” themes. For such films it will only be necessary to file a synopsis. A screenplay review is still required for movies with “special” themes.
- Production licenses will no longer be required for each individual film. Chinese enterprises with the “appropriate personnel, funds and other resources” will be allowed to engage in ongoing film production activities if they have approval from the relevant authorities at the provincial, regional or municipal level.
- Approval after completion of production is still required but may be obtained from the authorities at the provincial, regional or municipal level.
- Relevant authorities of the State Council must formulate applicable review standards and make them available to the public.
- China will implement preferential tax policies to promote development of its film industry. Specific measures are to be promulgated by the tax authorities of the State Council.
- Financial institutions are to be encouraged to provide financing services and film-related IP pledge services for film activities and improvement of film infrastructure. Insurance and completion guarantee companies are to be encouraged to develop the products needed to further develop China’s film industry.