China’s entertainment industry is one of the fastest growing sectors of the economy. The industry’s growth began during the 2008-2009 global financial crises as the government looked for ways to diversify the economy (Shira, 2015). Today, China’s entertainment sectors comprise of indoor recreation activities, amusement parks, lotteries, news and publishing, cultural activities, and sports among others. Foreign investors are keen on China’s thriving entertainment business but still have a difficult time securing their place in the market. The article focuses on identifying the key growth drivers in China’s entertainment industry and guiding investors on how to effectively infiltrate the sector.
Several factors have led to the fast growth of China’s entertainment industry. Foremost is political goodwill. The government is committed to revitalizing China’s cultural activities to generate more income (Shira, 2015). Secondly, there is the growing middle-income class in the country with adequate purchasing power for entertainment products at competitive prices. Thirdly, there is increasing foreign investment in the sector. The last factor is internet connectivity in China that facilitates effective distribution of information throughout the country.
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However, foreign investors encounter many difficulties penetrating China’s entertainment industry. The Chinese government limits the number of foreign films in the country making it difficult for foreigners to profit through the distribution of creative works (Shira, 2015). Moreover, China imposed a 14-year ban on the creation and sale of console video games, which is one of the most profitable lines of business in entertainment. Although the ban was lifted and foreign investors are actively involved in China’s entertainment industry, there is a need for foreigners to understand the several critical issues.
China’s entertainment industry is regulated by a comprehensive framework and has several restrictions. The corporation must operate within the business scope provided during the registration process and must adhere to required tax payments (Shira, 2015). Other restrictions include restrictions on foreign films, censorship, and human resources challenge in the sector. The best solution for foreign investors intent on entering China’s entertainment industry is to focus on mature markets and seek legal assistance before commencing business.
References
Shira, D. (2015). China investment roadmap: the entertainment industry. Disponibile a: http://www. dezshira. com/(ultimo accesso 22 settembre 2016) .
