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With a view to fully implementing the spirit of the 16th CPC National Congress as well as the 3rd Session of the 16th CPC Central Committee, satisfying the requirements for reform and development of the socialist market economy, addressing the characteristics and law of the socialist spiritual construction, and carrying out the overall planning for deepening cultural reform, the following opinions are hereby put forward on expediting the development of the film industry in the light of the practical situation concerning films. I. THE SITUATION AND TASKS CONCERNING THE DEVELOPMENT OF CHINA'S FILM INDUSTRY 1. The importance and urgency of developing the film industry. Films are one of the cultural and entertaining forms popular with the general public. As one of the industries backed by new and high technologies and featuring high intelligence, high input and high output, the film industry has become an important and vigorous component part of, and played a significant role in, the cultural industry as a whole. To develop the film industry can be active and important in propelling the socialist spiritual construction, carrying forward the national culture and the national spirit and promoting the restructuring of the national economy. At present, the film industry reform and development are urgently required to be compatible with the institutional environment that China is improving for its socialist market economy, the growing spiritual and cultural demand of the people in the context of a well-off society, the pattern of all-round opening to the outside world after China's entry into the WTO, and the new situation of rapid development of science and technology and of fierce competition in multimedia around the globe. We must establish a new concept of film development and remove all ideological and institutional obstacles and other practices against the film industry development. We must come to the full understanding that problems do exist such as neglect of the industrial nature of films, lack of market and business awareness, irrational structure of the film industry, undiversified ownership pattern, relatively low marketization level, undersupply of products, lack of vigor and competitiveness among enterprises, etc. We must fully understand that the only approach in solving all these problems lies in the acceleration of reform, innovation and development. We must be fully aware of the significant opportunities and challenges brought by the ongoing economic development and social progress to the film industry and as soon as possible, come up with a new path that satisfies the requirements of developing the socialist advanced culture and the socialist market economy. 2. The guidelines and principles in developing the film industry. We must hold high the great banner of Deng Xiaoping Theory and the important thought of the "Three Represents", fully implement the spirit of the 16th CPC National Congress as well as the 3rd Session of the 16th CPC Central Committee, keep moving in the direction of advanced culture, uphold the principle of "Two Serves" (serve the people and serve socialism) and the policy of "Two Hundreds" (let a hundred flowers blossom and let a hundred schools of thought contend), carry forward the leading melody and advocate diversification. We must strengthen and improve the leadership of the Party over films. We must emancipate our minds, seek truth from facts, keep pace with the times, and make pioneering efforts in innovation. We must uphold the principle of coordinated development between the film industry and the film undertakings and between the film culture and the film economics. We must orient films towards the general public and the market, take development acceleration as the theme, innovative reform as the driving force and institutional innovation as the focal point, actively explore diverse forms in realizing the public ownership of the film industry, strengthen the macro-control, and activate the competition mechanism at the micro level. We must bring into full play the leading role of the market and the progress in science and technology, fully tap into the initiatives of the film industry forces as well as other social forces in operating films, closely follow the law of the film art and of the film market, strike a balance between social benefits and economic returns and produce more excellent works and talents, so as to continuously satisfy the spiritual and cultural demand of the general public and propel the all-round modernization of the Chinese-characterized socialist film industry. 3. The goals and tasks of developing the film industry. The first two decades of the 21st Century are an important period of strategic opportunities for film industry development. We must expedite the institutional reform and innovation in the film industry and establish as soon as possible a film industry operating pattern featuring the leading role of market forces, enterprise autonomy in operation, and statutory administration by the government. We must establish a national film market system characterized by uniformity, openness, fair competition, regulation, orderliness and legal operation. We must establish a film production and operation system characterized by multiple sources of investment, diversified operation, production in diverse forms, distribution through diverse channels and development at diverse levels. We must establish a policy and legal framework and a government supervision and administration system characterized by the rule of law in public administration, scientific regulation, forceful guarantee and effective administration. It is our goal through five to ten years of development to form several large modern film enterprise groups with prominent principal businesses, quality brands, leading market roles and international competitiveness, foster and remold a vigorous and competitive group of new film market players, therefore greatly improving the film production and operation capacity, diversifying film products, upgrading film projection facilities in both urban and rural areas, securing a continuous increase of the film audience, keeping a good cycle of input and output, making the film culture flourish at large, seeing to it that the film box office revenue and the gross film production value become a new growth point in the national economy, and making China's film industry stronger and bigger and China one of the world film powerhouses. II. REMOLDING THE MARKET PLAYERS AND ACTIVATING THE MICRO-LEVEL OPERATING MECHANISM 4. Accelerating the transformation of the state-owned film organizations. Organizations engaged in the production, distribution and projection of films are businesses in nature; they are operating entities in the film market as well as important forces in developing the film industry. The state-owned film organizations should accelerate transformation, implement company-oriented reform in the light of the modern enterprise system, and through institutional innovation, perfect the corporate governance, establish market-oriented operating patterns, create name brands, revitalize their assets, improve returns and upgrade competitiveness, so as to develop into the market players that make business decisions on their own, assume sole responsibility for their profits or losses and apply self-development and self-restraint. However, during the transformation, active and steady efforts must be made to handle well the old-age insurance and medicare guarantee for the retired as well as the repositioning of the redundant personnel. 5. Actively propelling the joint-stock system. We should accelerate the establishment of the modern property rights system, separate ownership from management, clarify the property rights and management responsibilities, expand financing channels, multiply the sources of investment and actively explore a mixed ownership pattern with the participation of state-owned capital, collective capital, non-public-owned capital, etc. We will encourage state-owned, private and foreign capital from outside the film industry to participate in the joint-stock transformation of film enterprises, so as to enable them to establish a modern enterprise system, increase input, adopt better management, increase the output and open new markets. We will encourage resources reorganization and capital restructuring through forms such as merger, acquisition, regrouping, alliance, etc. among film enterprise; those qualified should try to get listed in stock exchanges. However, during the transformation, we must improve the assets appraisal system to preserve and increase the value of state property. 6. Expanding the intensive operation of films. We should use the market mechanism to rationally allocate film resources, promote scale and intensive operation, do away with isolated operating patterns within certain regions or the guild and form a diversified operating structure featuring the use of multimedia such as film, television, tape-recording, CDs and the Internet. We will encourage film enterprises to build large capital-connected film groups that operate across different regions, industries and ownership patterns, in a way to make the film industry stronger and bigger. 7. Deepening the institutional reform within enterprises. We should deepen the institutional reform within film enterprises, accelerate institutional innovation, establish and perfect orderly and efficient mechanisms in decision-making, management and evaluation, improve the mechanism in competition incentives and restraints, and adopt the responsibility system for management goals and position targets. We should do away with the mentality of "doing nothing but wait, rely on or ask for exterior support all the time", remove the concept of egalitarianism in distribution, practice the position appointment system and the labor contract system, enhance the reform of the three systems, namely the labor employment system, the cadres and personnel system and the salary and distribution system, and see to it that there are qualification-disqualification mechanism for employees, promotion-demotion mechanism for cadres, and the linking of economic returns to social distribution (or pay to performance). We should improve the systems in finance and cost management and reduce costs in production, management and expansion, so as to improve economic returns. We should actively promote effective operating systems such as the system of film producers, the system of brokers, and the project responsibility system, in a way to continuously elevate film operations. III. READJUSTING THE INDUSTRIAL STRUCTURE AND TAPPING THE MARKET THROUGH DIVERSIFICATION 8. Establishing a film products pattern with profit coming from multiple sources. We should fully exert the advantage of films as a content-based industry in stimulating the development of the relevant industries, change the single operating pattern under which box office is the only source of revenue for film products, and use digitized, networked and computerized technologies to spread through multimedia, develop in multi-layers, and sell through multi-channels the film originals, duplicates, derivatives and image products, in a way to realize the multi-profit-source pattern of the industrial chain of films and tap into the overall returns of film products. 9. Developing the film market in multi-levels. We should propel the rebuilding of multi-hall cinemas in urban areas, enliven the cinema market, tap the diversified mobile cinema market, expand film projection scale in both urban and rural areas, expand the TV-connected film market, operate well film channels, and use TV-based media to broaden the coverage of films. We should develop the audiovisual film market and regulate operating activities involving the issue of copyright. We should tap the Internet film market and ensure film products to gain reasonable profit on the Internet. We should cultivate the digital film market and use high and new techs to create new platforms for film production, transmission and projection, so as to bring about new market growth point. We should develop film image products and derivative products and expand brand operation of films. IV. DEEPENING THE REFORM IN THE CIRCULATING SYSTEM AND ESTABLISHING A MODERN MARKET SYSTEM 10. Introducing a competitive and open market. To enhance the unification and opening of the film market is an important task for building a modern film market system. We must abrogate all market segmentation provisions in the film circulating system that obstruct fair competition, set up administrative blockade or exclude non-local products and services. We must break up regional blockade and trade monopoly, actively promote the inward and outward opening of the film market, and see to it that film products and all factors can move freely and compete orderly within the whole country. 11. Deepening the reform in the cinema-chain system. We should actively promote modern film circulating methods such as the cinema-chain system which features uniformity in brand as well as in film supply, operation and management. We should change the current situation wherein chained cinemas form a large number but each has a small scale, trans-provincial chain cinemas are anything but strong in terms of their extension capacity, and provincial chain cinemas are retarded by regional blockade. We should expedite the integration of chained cinemas and expand their scale. We will encourage trans-provincial chained cinemas to play the leading role, to practice close integration by assets or covenant alliances, widen financing channels, expand scale operations and conduct capital restructuring in different forms. We will encourage state-owned and private capital from both within and outside the film industry to help the formation of chained cinemas by holding or controlling their stock or by sole proprietorship, while cinemas may select chain partnership on their own. We will encourage fair competition between different cinema chains and promote prosperity and development of the film market through competition. We should actively explore the operating law, marketing methods and management experiment of chained cinemas, take close partnership as the major form of chain establishment, and uphold the goal of reducing staff and improving efficiency, conducting scale operations, increasing sci-tech content and providing quality services, in a way to create superb chains. 12. Improving the operation and management of cinemas. We should actively develop modern multi-hall cinemas, accelerate the upgrading and renovation of cinema infrastructure and film projection equipment, enhance the networking and application of computerized ticket sales systems, promote star-rating management of cinemas, regulate cinema projection and services standards, strengthen guild discipline and strictly prohibit any kind of violations such as dishonest reporting or pirate projection, so as to ensure that cinema operation and management can give first place to man, be services-based and highlight trustworthiness. 13. Actively cultivating market intermediary organizations. We should actively cultivate professional distribution companies whose operation is standardized, introduce modern advertising and marketing concepts, expand distribution channels, increase the impact and radiation capacity of these companies on the market, and promote the distribution and projection of homemade movies, cross-regional scale operation as well as institutional innovation in the circulation sector. We should perfect sales service networks and film supply outlets oriented towards urban and rural markets, make broad use of media such as broadcasting, TV, newspapers, magazines and the Internet to advertise films, improve the operating methods of the film trading market, and accelerate the circulation of new products on the market. V. TRANSFORMING GOVERNMENT FUNCTIONS AND IMPROVING THE MACRO-CONTROL SYSTEM 14. Transforming the administrative functions of government. The administrative departments in charge of films at all levels should separate the functions of government from enterprise management and from those of institutions. These departments shall simplify their administrative procedures, transfer power to lower levels, conduct public administration in accordance with the law, and make a transition from operation to administration of films, from direct to indirect administration and from industry-inward looking to whole-society orientation. We should bring into full play the guiding and controlling role of government departments in promoting industrial development and make full use of the respective functions of the Central and local government departments in orientation guidance, policy regulation, market supervision and administration, social administration and public services, so as to conduct public administration in accordance with the law and make a honest, clean, efficient, open and transparent government. The government departments may relax control where necessary and shall enhance administration if required. 15. Formulating a long and medium-term planning for film industry development. The administrative departments in charge of films at all levels shall focus on the current situation while having the future in view, study new issues, explore new ideas, and earnestly work out the by-phase goals of as well as the long and medium-term planning for film industry development after allowing for the local and departmental situation, so as to ensure at a strategic height the sustainable development of China's film industry. 16. Establishing a film market supervision and administration system. The administrative departments in charge of films at all levels shall be responsible for the film market supervision and administration. They should clarify supervisory and administrative responsibilities, improve the supervision and administration system, establish a law enforcement team, strengthen their market regulation efforts, and actively maintain the market order featuring lawful operation, law-breakers to be held accountable, fair trading and good faith, in an effort to standardize the market. They shall further strengthen and implement the supervisory and administrative measures, prevent and bring under control all forms of illegal films, and align with the other relevant departments to resolutely crack down on such acts as film smuggling, piracy and unauthorized projection, so as to protect film-related intellectual property rights. They shall unify and regulate the film industry-related statistics in a way to make film market information comprehensive, accurate and unimpeded. 17. Exerting the role of guild. The role of self-regulating organizations such as film guilds and professional societies should be brought into full play. The existing guilds should, in accordance with the requirements of modern film industry development, continuously improve and adjust their functions and operating patterns, play an important role in areas such as upgrading professional quality, regulating corporate and individual behaviors, perfecting market factors, safeguarding industrial rights and interests, enhancing guild discipline, etc., and serve as bridges between government departments and film enterprises and professionals. VI. PERFECTING FILM-RELATED LAWS AND REGULATIONS AND ADJUSTING INDUSTRIAL POLICIES 18. Perfecting the legal and policy systems. We must accelerate the drafting, promulgation and implementation of the Film Promotion Law, handle well the work related to the implementation of the Administrative Licensing Law, intensify our efforts in revising and perfecting the existing policies, laws and regulations for promoting film industry development, formulate the relevant supporting policies in deepening the reform of the film system, and pay equal attention to promotion and protection, so as to safeguard and promote the sustainable development of the film industry. 19. Regulating market entry of films. The film market entry system must be improved in terms of operating qualification, products, capital and technical standards. We should deepen the reform in administrative approval, cut back on the list of items subject to administrative approval, improve approval procedures and increase openness and transparency. We should standardize the approval on the competence and professional qualification of film operators, lower the threshold of entry, practice the license system, encourage all qualified state-owned and private cultural enterprises to go to the film production, distribution and projection sectors, and create for enterprises a market environment featuring openness, fairness and impartiality. For any film enterprises that behave improperly or produce substandard products or provide inferior services, the authorities shall order them to conduct correction or improvement or disqualify them from such operation, in accordance with the law. 20. Reforming film establishment and censorship. Except for films involving major revolutionary and historical themes, large documentaries, films whose major scenes and characters involve special topics, key films in the application for state funding, as well as films in the application for co-production with foreign partners, all features produced by film makers who hold the Film Production License or the Film Production License (Single-feature) shall be subject to plot summary-based approval instead of play-based approval practiced in the past. The bi-level censorship by the Central and local government departments will be promoted. Efforts should be made in the light of the Chinese situation to explore the film classification system under which separated services are provided to the underage and adult audiences, so as to protect the rights and interests of the underage while satisfying the demand of consumers at different levels. 21. Improving the funding and awarding mechanism for films. Forms such as government procurement may be adopted to support and fund the production, distribution and projection of national key films as well as children's films, rural films, science and educational films, documentaries and animated features, with procurement standards being formulated after allowing for the comprehensive factors including the philosophy behind and the artistic value and visual effect of, the films, so as to promote film projection on the market and maximize social benefits and economic returns. The award decision measures for film awards such as the "Huabiao Award", the Tongniu Award" will be reformed by adopting stricter awarding standards, standardizing the awarding order and improving the incentive and awarding rules. While taking the philosophy behind and the artistic value and visual effect of the films all into consideration, we may introduce appraisal standards for the film market, take the market share of films and the audience's opinions as important indicators in award decision, and work out specific provisions on award nomination conditions ¨C the box office revenue and the number of audience. 22. Adjusting the financing policies for films. Qualified state-owned or non-state-owned capital (excluding foreign capital) outside the film industry is encouraged to flow into the production, distribution and sales of films, or into cinema chain participation through joint venture or sole proprietorship, or into cinema establishment or rebuilding through sole proprietorship. Foreign film producers are permitted to establish Chinese-controlled film production companies with Chinese state-owned film producers, upon approval. Foreign companies are permitted to establish cinema construction companies or to rebuild cinemas through joint venture, upon approval, with the portion of foreign investment not exceeding 75% in the experimental cities. From January 1st, 2004 onwards, investors from Hong Kong and Macao special administrative regions may join the rebuilding of cinemas in China's mainland by way of joint venture or co-operation, with the portion of their investment not exceeding 75%. If any film production company or cinema chain company wishes to adopt the joint-stock system or to get listed on the stock market, approval must be obtained from the State Administration of Radio, Film and Television. 23. Implementing preferential policies for the film industry. We will formulate and improve preferential policies for the film industry, further implement the existing policies of the state in supporting films, and increase our efforts in exposing film enterprises to market operation through further regulation by financial and taxation policies. We will establish special funds to increase our long-term support to key films, ethnic minority films, rural films (including rural practical science and educational films), children's films, animated features encouraged by the state. We will lobby for tax-free policies for professional organizations engaged in the production of homemade animated features. The treasury bonds may be used to support the renovation of the large state-owned film production bases that have a long history and exert deep impact. Upon approval, the newly established film production, distribution and projection enterprises will be exempted from the enterprise income tax for one to three years; the film groups which are experimental units for cultural reform may pay enterprise income tax in a consolidated manner; and the film enterprises in real difficulties of tax payment may apply for relief of urban land use tax and real estate tax on land and houses for business purposes. Loan interest subsidies or other subsidy policies may be adopted to support the rebuilding of urban cinemas. We will encourage all social forces to contribute to and fund the film industry, establish some special funds for films in accordance with the law, and through market operation, ensure a benign cycle for the production of homemade films. VII. ACCELERATING THE DIGITIZATION OF FILMS AND PROMOTING THE UPGRADE OF THE FILM INDUSTRY 24. Improving film production through technology. We should promote the integration of film production and advanced science and technology, support the conversion of scientific and technological achievements, bring in internationally advanced technologies, upgrade the R&D and self-driven innovation capacity of Chinese films, increase high-tech content of film production in an all-rounded way, and accelerate the development of application software as well as its promotion in film production, so as to markedly improve the quality of film production. The construction of key digital film production bases should be enhanced so as to form scale production capacity. Those who are engaged in the R&D, production of digital film projects or in the construction of digital film bases upon approval may enjoy the tax preferential policies of the state for high and new-tech enterprises. 25. Promoting the overall development of digital films. We should make full use of digitized, networked and computerized modern transmission methods and technological tools to open the digital film market, establish digital cinema chains and increase the number of digital film screens. We should actively explore digital film projection in rural and urban areas and work hard to place digital films in the world frontier. We should set up platforms for digital film programs and make full use of film program sources to develop pay TV channels and HDTV channels. We should expand the scale of VOD films and develop multi-media and new media business including Internet VOD film operations. 26. Promoting modernized management of films. High-tech methods should be utilized to promote e-government and computerized management and enhance the protection, repairs and storage of film assets. We should put digital handling and application into broad use, increase the ratio of utilization of information resources and promote socialized exchange and sharing of information. We should use modern methods such as computerized ticket sales, promote management upgrade to achieve effective supervision and administration, and continuously bring management into a higher level. We should adopt a system for appraising the distribution and projection of homemade films, work out appraisal standards, come up with detailed appraisal measures and be fair and strict in meting out rewards and punishments. VIII. BOOSTING FILM PRODUCTION AND ACCELERATING PRODUCT INNOVATION 27. Forging ahead in the correct direction and producing more excellent works. We must give correct guidance to film production and exert ourselves to develop advanced culture and support healthy and useful culture, changing what is backward and resisting what is decadent. We should, in full artistic passion, sing the praises of new practices in the modernization drive, have the essence of and progress in social life reflected, portray the innovative spirit of the people and guide film production towards the practical situation, the real life and the general public. We must pay equal attention to social benefits and economic returns, create name brands, improve the quality and turn out a large number of excellent works popular with the general public and carrying forward the national spirit and the spirit of the times. 28. Updating the concept of film production. We must have a correct understanding of films to be commodities in nature, enhance market survey and research, and improve topic selection and project planning and assessment. We must always bear the audience and the market in mind, orient our products and services toward market demand, focus our attention on quality improvement, and take people's satisfaction as our goal. We must reform the film production and marketing mechanism and make innovations in this regard, bring into full play the initiatives of the large number of film production personnel, ensure the film industry to be people and market- oriented, explore new art forms, base the production on the market situation, and take the audience's liking and market shares as an important standard for film production and appraisal. 29. Encouraging innovation in art. Film producers are encouraged to make a free choice of themes and topics, conduct free exploration into the style and format, make bold efforts in both renovation and practices, learn as much as possible from film-related advanced experience and achievements worldwide, form a typed and diversified film production pattern, and open new frontiers by unique artistic thinking and format. The existing creation and productivity resources should be better allocated and tapped so as to satisfy the diversified and multi-level demand on the film market. IX. INCREASING THE INPUT INTO PUBLIC WELFARE UNDERTAKINGS AND STRENGTHENING THE SUPPORT TO KEY PROJECTS 30. Guaranteeing the production of national key films. For key films produced in concert with the overall work of the Party and the state, films involving the topics of rural life, ethnical minorities and children, as well as science and educational films, animated features and documentaries, we should continue to implement the government support policies, increase the capital input and adopt forms such as government procurement or order to fund and subsidize, therefore guaranteeing, the production of key films. 31. Popularizing film projection. While promoting the "Project of Projecting One Film Per Month at Every Village in the 21st Century", we should gradually realize three transitions, respectively from 16 mm to 35mm film, from open-air projection to in-door projection, and from gratuitous projection to admission-ticket-based projection. We should make full use of and manage well itinerant film projection cars, increase times of projection, improve projection conditions, upgrade services and ensure such projection to be truly effective. A development program featuring government support, market operation, social participation and paid services will be established for rural films so as to accelerate their marketization and modernization process. We should bring the social functions of films into full play, expand the scale of projection, and encourage film enterprises to show films for people in urban and rural communities, factories and mines, campus, military camps as well as farming and pastoral areas. 32. Actively implementing the "Going-out" project for films. We should actively expand international exchanges and cooperation, encourage homemade films to go to the world and support their participation in international film festivals and exhibitions. We should actively promote the landing of film channels in foreign territories, so as to make Chinese films better known to the world. We should increase the budget for international promotion and translation of films. Overseas centers for promoting Chinese films may be established to play the role of intermediary organizations in conducting intensive promotion and marketing and in promoting the film enterprises' tapping into the overseas market through all possible means. 33. Earnestly protecting film legacies. We should increase out input to enhance the construction of public welfare film facilities such as film museums and film libraries, the protection of film legacies as well as the collection, storage, sorting and utilization of film-related materials and cultural relics. 34. Actively cultivating film talents. We should effectively enhance the cultivation of film talents, actively develop film-related higher education and vocational education, and conduct position-based training for in-service personnel in an organized and planned manner. We should keep in mind the strategy for film industry development and make greater efforts in cultivating excellent film production, operation and management personnel. We should keep enhancing the education in the Marxist view of art and historical materialism, provide sound environment for the growth of young film talents, and work hard to build a high quality contingent of talents suited to film industry development. 35. Enhancing the research on film theories and the film science. We should take firm grip on the themes of reform, development and innovation, keep in view new practice in the film industry and new changes of the film market, conduct in-depth research on film theories and the film science, enhance the research on strategies and solutions, highlight innovation in and application of the research topics, elevate theoretical guidance to a higher level, boost film criticism and promote the progress in science and technology, so as to inject theoretical support and scientific motivation into film industry development. The departments in charge of films at all levels shall earnestly implement the spirit of the Party's 16th National Congress, strengthen and improve the leadership over films, deepen the reform in the film system and actively promote reform and development of the film industry. All people in the film industry must emancipate their minds, get up steam, carry forward the traditions and make pioneering efforts in continuously liberating and developing film productive forces, in continuously increasing the strength and competitiveness of the film industry and in making new contributions to the all-round building of a well-off society and to the socialist modernization drive. |
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