Sector shifts focus to create more original and profitable products

BEIJING - The Chinese government announced at the end of last year that the nation will continue offering value-added tax (VAT) refunds to the animation industry this year in its efforts to boost cultural development.

For companies that develop and make their own animation software products, VAT at 17 percent will be levied, but the portion of VAT which exceeds 3 percent of the taxpayer's actual VAT burden will be refunded upon tax collection, the Ministry of Finance said in a statement on its website.

Meanwhile, business tax for animation companies and their income from sales of their copyrights will remain at 3 percent.

The statement said the policies had been in effect since the beginning of this year and will remain in effect for 2012.

Thanks to the country's supportive policies, China produced 385 animated films in 2010, a 28 percent year-on-year increase. The industry also earned more than 500 million yuan ($79 million) from exports in 2010, marking a rise of 60 percent year-on-year, according to the State Administration of Radio, Film and Television.

China's central authorities in October released the full text of a guideline adopted by a plenary session of the Communist Party of China (CPC) Central Committee, urging more importance be given to cultural development.

The 17th Central Committee of the CPC held its Sixth Plenary Session in Beijing from Oct 15 to 18, when the plenum discussed issues regarding the reform of the country's cultural system.

The Chinese animation industry has been striving to achieve international fame and promote Chinese culture through exports, a move that is being seen as part of the government's plan to strengthen its soft power and extend its influence, industry insiders and experts said.

Industry insiders have also attributed the rapid export growth to an emphasis on originality and creativity among Chinese animators.

The industry previously operated as a mere "manufacturer" of foreign animation products, winning little global recognition, said Ye Zhenghua, a professor from the Guangzhou Academy of Fine Arts. But the industry has managed to quickly restructure itself and shift its focus to creating original products, thus creating a more prosperous market, Ye said.

Jin Cheng, president of Comic Fans magazine, said several domestic animators have already established themselves in the international arena.

Animator Xia Da has successfully serialized one of his works in Ultra Jump, one of Japan's most popular comic magazines, Jin said.

Jin said that while original products continuously spur the industry to grow, deeper engagement with the global animation industry has created opportunities for Chinese animation exports as well.

A popular Chinese cartoon called Pleasant Goat and Big Big Wolf has been translated into 17 languages and shown in more than 50 countries and regions, partly because of an agreement inked between the Walt Disney Company and Creative Power Entertainment, the cartoon's producer, according to Wu Dun, communications director with Creative Power Entertainment.

Chinese animation has started to gain acclaim around the world, becoming increasingly popular in Southeast Asia and the Middle East, Jin said.

Xinhua contributed to this story