Insight,

China signals further opening of performing arts market – with strings attached

By Mark Schaub, Shawn Hu, Tom Shi

The Ministry of Culture and Tourism (the "Ministry") has recently issued a draft announcement open for public comments entitled the "Notice of the Ministry of Culture and Tourism on Further Strengthening the Management of the Performance Market" (the "Notice") on their website. 

The Notice acknowledges that China's public performance market has played an important role in China's global influence and in enriching the Chinese people culturally. With that in mind, the Notice identifies areas where the Ministry needs to pay additional attention.

One of these focus areas is foreign investment. The Notice states one of the Ministry's objectives is to lower the barrier of entry for foreign investment, specifically allowing foreign parties to establish nationwide foreign-owned performing arts agencies and venue operators, as well as establish performing arts joint ventures with Chinese partners in Free Trade Zones where the JV is Chinese controlled.

To highlight some of the Notice's discussions related to the performing arts, the Ministry also specifies a need to strengthen supervision of immersive theatre experiences and virtual image performances. The Notice states feudal superstition, graphic horror and other similar content shall not be included in the immersive experience and the event organizers shall properly prepare for emergency and fire safety management under closed spaces. Additionally, the Ministry will form a group of experts to assess the content and provide an examination and approval guide for these performances. The Notice also states a need to strengthen management of virtual image performances, where holographic imaging, AI and ultra HD technologies are used to display virtual images. Lastly, the Notice proposes more strict management of ticketing channels in order to combat ticket scalping. 

The Notice also discusses other areas of entertainment including electronic dance music, rap music, small theater performances, live webcast streaming, talk shows and more. The full version of the Notice can be found here. (http://www.gov.cn/hudong/2019-12/07/content_5459222.htm)

In conclusion, the value of entertainment and intellectual property in the entertainment industry is a too big to ignore. On one hand, the Notice proposes an opening to foreign investment that is unprecedented. On the other, the Ministry is cognizant that they must carefully manage expectations while implementing structures to promote growth.

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