Welcome to the first installment in a 10-part series of practical tips that will make up the CFI Guide to Film Production in China. Publishing each Friday from now until just before the annual U.S. China Film Summit and the American Film Market in Los Angeles in early November, the CFI Guide is built upon wide-ranging research and reporting checked against specific case studies and available official documentation. It is for writers and producers, directors, actors, and members of the film marketing and distribution chain who believe that working with China is a part of their future. With Chinese ticket sales up nearly 50 percent in 2015, and likely to surpass U.S. sales inside the next year, it’s clear that this market is too big to be ignored. China Film Insider (CFI) is here to help you better understand China’s filmmaking process and industry.— Jonathan Landreth, Founding Editor

The number one obstacle facing foreigners in the movie industry in China is that, by law, they are not allowed to operate independently. Several sections of this report will delve further into the particular challenges that arise from this ground rule.

Filmmaking activities within China are subject to laws that restrict foreign entities from setting up their own companies or joint ventures with Chinese partners, and content is subject to approval and censorship.

Distribution of content is also severely limited. All imported films must be pre-approved by the State Administration of Press, Publication, Radio, Film, and Television (SAPPRFT) and are subject to censorship. As detailed later in the section on quotas, foreign studios can only distribute their films for theatrical release through a Chinese company, with a limited number of major revenue-sharing releases—those whose copyright holders will recoup a percentage of the gross box office—distributed through one of the state-run giants, the China Film Group Corp. or its sister company, Huaxia Film Distribution.

Similar restrictions apply to the distribution of content through other channels. In order to release film or television content for broadcast or online streaming, it is necessary to license the content through an authorized Chinese company and obtain the appropriate approvals. Of course, just because content is licensed to a Chinese entity does not mean it can play freely. Both SAPPRFT and the Ministry of Culture have been known to pull popular programs, both foreign and domestic, off of television and the Internet if they attract the wrong sort of attention. Sometimes foreign programs are pulled from the air or the web if they become too popular and pose a potential “threat,” in the form of stiff competition, to domestically produced content. Quotas limit the amount of foreign programming that can be made available.

This restrictive state of affairs is bound to continue under new rules that went into effect on March 10, 2016, which formally bar foreign companies and foreign-invested joint ventures from publishing content online. It’s not yet clear, however, exactly what that might mean in practice.

One way for foreign filmmakers to increase their involvement in the Chinese movie industry is by working with a Chinese studio. A number of countries have formalized co-production treaties with China, although the United States is not one of them. Under the Chinese regulations that govern film productions, foreign filmmakers have three options: co-productions, in which both parties contribute funding, talent, and production assets; assisted productions, where the foreign party provides funding and the Chinese party is paid to provide support such as production equipment, facilities, and labor for a film shot in China; and commissioned productions, in which the foreign party commissions a Chinese company to produce a film in China.

Non-Chinese individuals may work in China on specific projects subject to securing the proper approvals, work permits, and visas.

—Sky Canaves

Read Part 2, “China’s Censors Are Powerful.”