China introduces film industry law

The top legislature on Monday adopted a film industry law, promising harsh punishment for firms that fabricate box office earnings, data or information.

Film distributors and theaters will have all their illegal earnings confiscated and be fined up to 500,000 yuan (about $73,800) if they falsify ticket sales data, according to the law adopted at the National People's Congress (NPC) Standing Committee bimonthly session after a third reading.

If their illegal earnings exceed 500,000 yuan, the fine will be up to five times their illegitimate earnings.

They may also be hit with an operating suspension or have their business certificates revoked in serious cases, according to the new law.

The law is the first of its kind in China, currently the world's second largest film market, and will take effect on March 1, 2017.

China's 2016 box office takings exceeded 38 billion yuan as of October, leading many to speculate that the Chinese market will surpass North America's as early as 2017.

Shi Chuan, vice president of Shanghai Film Association, lauded the new law calling it "a milestone," as it gave the industry a legal foundation to further develop.

Box office fraud is not a new phenomenon in China; this new law will provide a legal basis for law enforcers and help better protect the interests of the public, Shi said.

There are two ways in which theaters generally "forge ticket sales." The distributors can inflate box office takings to make the film appear popular, thus attracting more viewers and screenings; or theaters can conceal their true ticket sales and pocket the earnings without sharing them with film makers.

In March, the film watchdog suspended the license of a distributor that had inflated box office receipts for domestic movie Ip Man 3.

This case was just the tip of the iceberg, as statistics indicate at least 1 percent of all box office takings had been "stolen" in recent years.

To accurately count ticket sales is of utmost importance to measure the genuine market and ensure the healthy development of the industry, said Ren Zhonglun, president of Shanghai Film Group.

He said the law was drafted in response to public concern, and the stipulations outlined in the law were feasible.

Socialist interests

Those who engage in film making should serve the people and socialism, prioritizing social benefits and bringing about harmony of economic returns and contribution to society, the law stipulated.

Authorities must respect and ensure the freedom of film making and help develop an open film market featuring fair competition, it said.

China will support the making of films championing excellent Chinese culture and socialist core values.

Chinese groups can cooperate with overseas counterparts in film shooting, excluding overseas organizations and individuals that engage in "activities damaging China's national dignity, honor and interests, or harming social stability or hurting national feelings," the law said.

Co-productions can be seen as domestic films if the percentage of Chinese investment or revenue sharing reaches a certain level, it said, without detailing specific amount.

Overseas organizations can not independently shoot films in China, while overseas individuals are totally banned from shooting films.

Furthermore, the law stipulates that no films should contain content that "jeopardizes national unity, sovereignty and territorial integrity," releases national secrets, endangers state security, damages national dignity, honor and interests, or advocates terrorism and extremism.

Higher requirements for actors

The law specified that actors, directors and other staff should be "excellent in both moral integrity and film art," maintain self-disciplined and build a positive public image.

The past few years have seen a string of arrests of high-profile film celebrities involved in drug abuse and prostitution.

In 2014, the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) banned screenings involving anybody who had engaged in criminal activity.

The media watchdog is also establishing a "professional ethics committee," aiming to guide organizations and people in the radio, film and media circles to practice "core socialist values."

Actress Qin Yi, 95, said all actors, as public figures, should take responsibilities for their words and deeds, adding that the law will spur actors to improve their morals and professionalism, which is good for the entire industry.

Fewer approvals, more investment

The law delegates the central government's power of film censorship to provincial-level governments and cuts several approval items.

"Cutting red tape and motivating the market is the trend for promoting reform in the industry," said the SAPPRFT deputy head Yan Xiaohong.

In the first half of 2016, 209 films were registered for shooting in Shanghai. The finished films numbered 52, more than for the whole of 2015.

Yan said the law features a combination of delegating power and improved management, calling for stronger training of censorship staff and regulation of censorship standards.

The central government will increase investment in the film industry and reduce taxation, according to the law.

It encourages financial institutions to offer financing services and loans for the industry's development.

Local governments are urged to ensure land supply for theaters and encourage theaters' construction and renovation.

China has nearly 40,000 screens for commercial operation, increasing from 7,700 screens in 2015, an average of 25 new screens per day, according to China Film News.

The law also encourages overseas investment from Chinese film makers' by co-producing films, and promises to support their overseas trade and financing.

Theaters should ensure that domestic films' screening time is no less than two thirds of the annual screening time of all films.

Domestic films need protection, which is a common international practise, Ren said.