The top legislature on Monday adopted a film industry law, promising harsh punishment for firms that fabricate box office earnings, data or information.
Film distributors and theaters will have all their illegal earnings confiscated and be fined up to 500,000 yuan (about 73,800 U.S. dollars) if they falsify ticket sales data, according to the law adopted at the National People's Congress (NPC) Standing Committee bimonthly session after a third reading.
If their illegal earnings exceed 500,000 yuan, the fine will be up to five times their illegitimate earnings.
They may also be hit with an operating suspension or have their business certificates revoked in serious cases, according to the new law.
The law is the first of its kind in China, currently the world's second largest film market, and will take effect on March 1, 2017.
China's 2016 box office takings exceeded 38 billion yuan as of October, leading many to speculate that the Chinese market will surpass North America's as early as 2017.
Shi Chuan, vice president of Shanghai Film Association, lauded the new law calling it "a milestone," as it gave the industry a legal foundation to further develop.
Box office fraud is not a new phenomenon in China; this new law will provide a legal basis for law enforcers and help better protect the interests of the public, Shi said.
There are two ways in which theaters generally "forge ticket sales." The distributors can inflate box office takings to make the film appear popular, thus attracting more viewers and screenings; or theaters can conceal their true ticket sales and pocket the earnings without sharing them with film makers.
In March, the film watchdog suspended the license of a distributor that had inflated box office receipts for domestic movie "Ip Man 3."
This case was just the tip of the iceberg, as statistics indicate at least 1 percent of all box office takings had been "stolen" in recent years.
To accurately count ticket sales is of utmost importance to measure the genuine market and ensure the healthy development of the industry, said Ren Zhonglun, president of Shanghai Film Group.
He said the law was drafted in response to public concern, and the stipulations outlined in the law were feasible.
SOCIALIST INTERESTS
Those who engage in film making should serve the people and socialism, prioritizing social benefits and bringing about harmony of economic returns and contribution to society, the law stipulated.
Authorities must respect and ensure the freedom of film making and help develop an open film market featuring fair competition, it said.
China will support the making of films championing excellent Chinese culture and socialist core values.
Chinese groups can cooperate with overseas counterparts in film shooting, excluding overseas organizations and individuals that engage in "activities damaging China's national dignity, honor and interests, or harming social stability or hurting national feelings," the law said.
Co-productions can be seen as domestic films if the percentage of Chinese investment or revenue sharing reaches a certain level, it said, without detailing specific amount.
Overseas organizations can not independently shoot films in China, while overseas individuals are totally banned from shooting films.
Furthermore, the law stipulates that no films should contain content that "jeopardizes national unity, sovereignty and territorial integrity," releases national secrets, endangers state security, damages national dignity, honor and interests, or advocates terrorism and extremism.`
