China's animation industry becomes investment hotspot

People visit the Industry Expo of the 19th China International Cartoon & Animation Festival in Hangzhou, capital of east China's Zhejiang Province, June 20, 2023.  (Xinhua/Jiang Han)

With its considerable economic gains and huge market prospects after years of growth, China's animation industry is expected to become a hot investment destination, industry insiders say.

Its total output value is expected to exceed 300 billion yuan (about 41.8 billion U.S. dollars) in 2023, said Ma Li, president of the China Animation Association, at a parallel forum during the 2023 Annual Conference of the Financial Street Forum.

"Animation has deeply engaged human life in the digital age and is closely intertwined with social development, generating huge industrial value," Ma said.

From the popularity of domestic fantasy "Ne Zha," which topped the annual box office revenue chart in 2019, to the success of "Chang An," which depicts the stories of the "immortal poet" Li Bai, a wave of blockbuster animations has attracted broad attention over recent years, fueling expectations of a Chinese industry takeoff.

Adapted from well-known folk legends and deeply rooted in Chinese culture, these animated movies have established a unique storytelling style, helping them gain a substantial foothold in a global animation market once firmly dominated by the United States and Japan.

Data shows that the total output value of China's animation industry has skyrocketed, rising from 88.2 billion yuan in 2013 to 221.2 billion yuan in 2020, revealing strong growth momentum.

Eyeing China's high-quality animation products and huge market potential, increasing numbers of global investors and market players are betting on the sector.

Take the successful overseas run of the CG-animated series "Deer Squad" as an example. The original children's animation, presented by iQIYI in cooperation with Nickelodeon, was first aired on Nickelodeon International in August 2020 and was received well around the world.

"Considering the high viewership in the United Kingdom, Australia and North America, Paramount has pre-purchased the overseas broadcasting rights for the fourth season of the series in the script development stage," Yang Xiaoxuan, vice president of iQIYI, said during the forum.

Away from the big screen, the enthusiasm of Chinese audiences has also boosted the development of the tourism sector.

Barely 10 days after "Chang An" was released, for example, dine-in orders from domestic tourists in Xi'an, northwest China's Shaanxi Province, increased 387 percent year on year. The number of hotel and guesthouse bookings from out-of-province tourists increased 339 percent, and sales of tickets for scenic areas increased 28 times.

The rapid growth of the sector is inseparable from government support. China's cultural industry development plan for the 14th Five-Year Plan period (2021-2025) noted that the country aims to continue to improve the quality of its animation industry, build brands, and promote the development of the whole industrial chain.

And local governments have rolled out policies such as tax incentives and copyright regulations to shore up the industry. Xicheng District in China's capital city of Beijing is investing a whopping 50 million yuan in special funds each year to support industries related to the animation sector.

Dai Wei, vice president of the Bank of Beijing, told the forum that the bank will enhance its support for the country's established animation industry, vowing to offer comprehensive financial services covering entire industrial chains in the animation sector.

The bank will create new financial products to boost industries related to animation, and roll out loan support to aid animation enterprises, Dai said.