Reading time: 3 minutes


China Eases Foreign Ownership Restrictions for Theme Park, Cinema, and Entertainment Exhibition Operators

Foreign investors can now establish entertainment venues in China without special ownership restrictions.



Alexander Chipman Koty

Advisor to Dezan Shira & Associates


Foreign investors can now establish entertainment venues in China without special ownership restrictions, following the release of new regulations.


The policy shift will allow foreign investors to set up cinemas, theme parks, and other entertainment exhibitions without having to enter a joint venture with a domestic partner.


Previously, foreign investors could only operate such businesses as a minority partners.


The amendment offers significant new long-term opportunities for entertainment venue operators, who have been among the hardest hit in China and abroad by COVID-19-related disruptions.


New regulations remove ownership limits


On May 27, 2021, Chinas Ministry of Culture and Tourism released an announcement, Adjusting Approval Conditions for Entertainment Venues and Internet Access Locations, describing changes to the regulation of entertainment venues.


Per the Decision of the State Council on Amending and Repealing Certain Administrative Regulations, foreign investors no longer face restrictions on the proportion of foreign ownership allowed in the sector. In other words, foreign investors can now establish wholly foreign-owned enterprises in the sector.


Previously, foreign investors could only open such venues in a joint venture with a Chinese partner acting as the majority shareholder.


To establish an entertainment venue, foreign investors face the same regulations as their Chinese counterparts, which include an application to the relevant provincial Culture and Tourism department for approval.


The law also prevents entertainment venues, as well as internet service businesses, from setting up in close proximity to schools and kindergartens.


The amendment formalizes in law changes made to the Negative List in 2019, which removed the stipulation that the construction and operation of cinemas must be controlled by a Chinese party. This earlier change did not apply to other entertainment venues, including theme parks.


Theme park openings in China continue


Chinas theme park industry continued to expand in 2020, despite closures and international travel restrictions caused by COVID-19, though some parks struggled in these conditions.


According to the infrastructure firm AECOM, 12 new theme parks opened in China in 2020, while nine parks closed or suspended their operations. In total, the firm says that there are 156 theme parks in China, an increase of 28 over a two-year span. By 2025, AECOM projects 80 new theme parks to open in China, with a combined investment of about RMB 300 billion (US$46.92 billion).


Major foreign theme park operators in China include Shanghai Disneyland, the upcoming Universal Studios theme park in Beijing set to open later this year, the Six Flags theme park planned for Tianjin, and the Legoland park that will open in Shanghai.


Typically, foreign theme parks with recognizable intellectual property operate in Chinas most developed cities, while domestic operators, who largely draw on Chinese culture and history for their themes, dominate smaller markets.


In 2019, before the pandemic, Disneyland Shanghai had 11.2 million visitors, which was the second most in China. The Chinese-owned Chimelong Ocean Kingdom in Guangzhou, which had 11.7 million visitors that year, is the worlds most visited theme park.


With the policy shift, existing foreign theme park operators will be able to buy out the shares of their domestic partners, though there are no indications that major players are planning on doing so. When Shanghai Disneyland opened in 2016, Disneys joint venture partner, the state-owned Shanghai Shendi Group, owned a 57 percent stake.


Film industry recovering from pandemic


The move to allow foreign cinema operators full ownership will increase access to the worlds largest film market.


Following months of closures due to the pandemic, Chinese cinemas reopened halfway through 2020 with restrictions, leading China to surpass the US to become the worlds largest film market. China registered US$3.1 billion in ticket revenue in 2020, while the US registered US$2.1 billion. Before the pandemic, Chinas box office receipts were worth about US$9 billion per year.


Chinese filmgoers still face a number of restrictions when visiting a cinema, including required mask wearing, capacity restrictions, and compulsory sign-up to contact tracing apps. Despite these restrictions, February 2021 was Chinas largest ever month for movie ticket sales, as residents flocked to the theater during the Lunar New Year holidays.


The Chinese comedy Hi, Mom earned US$825 million in February alone. Through May 2021, Chinas box office generated US$3.97 billion in ticket sales, which was only 5.7 percent behind the countrys pre-pandemic levels in 2019.


As Chinas film industry develops, audiences are increasingly turning to domestic films rather than foreign ones. In 2020, foreign films accounted for 16 percent of box office sales, compared to 36 percent in 2019. Though this comes with the caveat that studios delayed many foreign films amid the pandemic, blockbusters such as Wonder Woman 1984 and Mulan vastly underperformed expectations in China.


The total number of cinema screens in China increased from 6,256 in 2010 to 75,581 in 2020, according to Statista. Chinas Dalian Wanda Group is the largest cinema operator in China and in the world overall. Since 2012, Dalian Wanda Group held a controlling share of AMC Theaters, the biggest theater exhibitor in North America, until it recently sold off most of this stake.


China Tours, Vacation Packages & Travel Deals - 2021/22 

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China Eases Foreign Ownership Restrictions for Entertainment Ind



Reading time: 3 minutes


China Eases Foreign Ownership Restrictions for Theme Park, Cinema, and Entertainment Exhibition Operators

Foreign investors can now establish entertainment venues in China without special ownership restrictions.



Alexander Chipman Koty

Advisor to Dezan Shira & Associates


Foreign investors can now establish entertainment venues in China without special ownership restrictions, following the release of new regulations.


The policy shift will allow foreign investors to set up cinemas, theme parks, and other entertainment exhibitions without having to enter a joint venture with a domestic partner.


Previously, foreign investors could only operate such businesses as a minority partners.


The amendment offers significant new long-term opportunities for entertainment venue operators, who have been among the hardest hit in China and abroad by COVID-19-related disruptions.


New regulations remove ownership limits


On May 27, 2021, Chinas Ministry of Culture and Tourism released an announcement, Adjusting Approval Conditions for Entertainment Venues and Internet Access Locations, describing changes to the regulation of entertainment venues.


Per the Decision of the State Council on Amending and Repealing Certain Administrative Regulations, foreign investors no longer face restrictions on the proportion of foreign ownership allowed in the sector. In other words, foreign investors can now establish wholly foreign-owned enterprises in the sector.


Previously, foreign investors could only open such venues in a joint venture with a Chinese partner acting as the majority shareholder.


To establish an entertainment venue, foreign investors face the same regulations as their Chinese counterparts, which include an application to the relevant provincial Culture and Tourism department for approval.


The law also prevents entertainment venues, as well as internet service businesses, from setting up in close proximity to schools and kindergartens.


The amendment formalizes in law changes made to the Negative List in 2019, which removed the stipulation that the construction and operation of cinemas must be controlled by a Chinese party. This earlier change did not apply to other entertainment venues, including theme parks.


Theme park openings in China continue


Chinas theme park industry continued to expand in 2020, despite closures and international travel restrictions caused by COVID-19, though some parks struggled in these conditions.


According to the infrastructure firm AECOM, 12 new theme parks opened in China in 2020, while nine parks closed or suspended their operations. In total, the firm says that there are 156 theme parks in China, an increase of 28 over a two-year span. By 2025, AECOM projects 80 new theme parks to open in China, with a combined investment of about RMB 300 billion (US$46.92 billion).


Major foreign theme park operators in China include Shanghai Disneyland, the upcoming Universal Studios theme park in Beijing set to open later this year, the Six Flags theme park planned for Tianjin, and the Legoland park that will open in Shanghai.


Typically, foreign theme parks with recognizable intellectual property operate in Chinas most developed cities, while domestic operators, who largely draw on Chinese culture and history for their themes, dominate smaller markets.


In 2019, before the pandemic, Disneyland Shanghai had 11.2 million visitors, which was the second most in China. The Chinese-owned Chimelong Ocean Kingdom in Guangzhou, which had 11.7 million visitors that year, is the worlds most visited theme park.


With the policy shift, existing foreign theme park operators will be able to buy out the shares of their domestic partners, though there are no indications that major players are planning on doing so. When Shanghai Disneyland opened in 2016, Disneys joint venture partner, the state-owned Shanghai Shendi Group, owned a 57 percent stake.


Film industry recovering from pandemic


The move to allow foreign cinema operators full ownership will increase access to the worlds largest film market.


Following months of closures due to the pandemic, Chinese cinemas reopened halfway through 2020 with restrictions, leading China to surpass the US to become the worlds largest film market. China registered US$3.1 billion in ticket revenue in 2020, while the US registered US$2.1 billion. Before the pandemic, Chinas box office receipts were worth about US$9 billion per year.


Chinese filmgoers still face a number of restrictions when visiting a cinema, including required mask wearing, capacity restrictions, and compulsory sign-up to contact tracing apps. Despite these restrictions, February 2021 was Chinas largest ever month for movie ticket sales, as residents flocked to the theater during the Lunar New Year holidays.


The Chinese comedy Hi, Mom earned US$825 million in February alone. Through May 2021, Chinas box office generated US$3.97 billion in ticket sales, which was only 5.7 percent behind the countrys pre-pandemic levels in 2019.


As Chinas film industry develops, audiences are increasingly turning to domestic films rather than foreign ones. In 2020, foreign films accounted for 16 percent of box office sales, compared to 36 percent in 2019. Though this comes with the caveat that studios delayed many foreign films amid the pandemic, blockbusters such as Wonder Woman 1984 and Mulan vastly underperformed expectations in China.


The total number of cinema screens in China increased from 6,256 in 2010 to 75,581 in 2020, according to Statista. Chinas Dalian Wanda Group is the largest cinema operator in China and in the world overall. Since 2012, Dalian Wanda Group held a controlling share of AMC Theaters, the biggest theater exhibitor in North America, until it recently sold off most of this stake.


China Tours, Vacation Packages & Travel Deals - 2021/22 

Scan the following QR code for more info




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