The big entertainment news in China this year has been the rise in the cinema box office to around $3.6 billion ranking second only to America. According to Bank of America’s Jessica Reif Cohen, the annual growth rate for the past five years has been a staggering 47%. There were more features filmed in Beijing this year than in Hollywood, though that is partly because American producers are leaving LA to seek cheaper locations.
Both Chinese and foreign film-makers expect the growth to continue. The reason for their optimism is better business management, not government policy. Companies are making films about contemporary life that audiences want, such as ‘Lost in Thailand’ and ‘So Young’, a title based on a song by British band Suede which earned $114 million this year. They are becoming more skilful at marketing. Cinemas are better equipped.
This optimism is shared by online giants Alibaba and Tencent which now match their American cousins in value. The gossip in recent months has been about where Alibaba founder Jack Ma wlll list his company and at what price. He originally favoured Hong Kong but regulators there rejected his plans for a two-tier ownership structure so he turned to New York. The company’s IPO valuation will far exceed Twitter’s and Ma must be tempted by the thought of exceeding Facebook’s $105 billion. Whether this happens or not, his IPO will send a strong signal that Chinese dotcoms are world-class. Buying Alibaba looks like buying AT&T or Microsoft when they were young start-ups.