The emergence of Huaxia will break the 50-year monopoly of the China Film Group Co. on distributing imported films as well as its 10-year monopoly on imported revenue-sharing blockbusters. It will create much needed competition in China's imported film distribution market.

According to Mao Yu, head of the Publicity and Distribution Department of the Film Bureau under the State Administration of Radio, Film & Television (SARFT), the establishment of Huaxia is conducive to the opening-up of the film market and will enrich its resources.

Mao Yu said that although there are dozens of blockbusters being imported annually, some of them have been set aside before viewers have a chance to see them because the China Film Group Co., as the only distributor, has no competition, which leads to inadequate publicity on many blockbusters. With the new competition, it will not only reduce the waste of resources but also speed up public screening of these imported films.

It takes six steps for a blockbuster to be imported and screened in China. These are: introduction, preliminary examination conducted by China Film Group Co., examination by the Film Bureau, dubbing by a film dubbing company, developing and printing a Chinese copy and distribution. It usually takes two and half to three months for the whole procedure.

On the one hand, such a period of time provides great business opportunities for the black market, while on the other, it puts an already poor box office in an even more difficult position. Now viewers have more reasons to expect the faster public screening of blockbusters.

The film industry is one of the industries which have been affected by China's entry into the World Trade Organization (WTO). More and more blockbusters will swamp China's film market. Foreign capital also directly enters into China's film market. In recent years, the annual box office of domestic films is less than half of the total box office of the country. Some related departments even have issued regulations that the 30 cinema chains in the country must guarantee the schedule and box office of domestic films otherwise their quota of screening imported blockbusters will be reduced.

According to Liu Jianzhong, board chairman of Huaxia and ex-chief of the Film Bureau, Huaxia will start to release imported films from the middle of July and release the first imported revenue-sharing films in August. The income of imported blockbusters will be handed to the state according to a fixed ratio so as to subsidize films on public welfare, which suffer heavy losses such as scientific and educational films as well as children's films.

In addition, the quantity of imported films allowed for by the two distribution companies will be allocated according to their domestic film box office starting from next year. That is to say, the better their domestic film box office, the more they will be allowed on imported films.

The competition between Huaxia and the China Film Group Co. will also indirectly lead to the reduction of ticket prices besides promotion on the distribution of domestic films. Once the monopoly is broken, different cinemas can select to screen films with lower prices from different distribution companies, making the reduction of ticket prices possible.

It is reported that Huaxia is jointly invested by 19 enterprises with a registered capital of 60 million yuan (US$7.25 million). As the largest stockholder, China Radio and Film Group Co. holds 20 percent of the company's stock. China Film Group Co. and Shanghai Film Group Co. each hold 11 percent of the company's stock. Changchun Film Group Co. holds 10 percent and the rest of the company's stock is shared by influential domestic film studios and cinema companies.

Weng Li, vice general manager of the Distribution Company of China Film Group Co., said the competition between Huaxia and China Film Group Co. will be harmonious and beneficial due to their close connection in finance.

(China Youth Daily translated by Wang Qian for China.org.cn, June 13, 2003)