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Film industry cheers tax relief and China production deal

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Film industry cheers tax relief and China production deal

David Cameron has heralded a new deal that will open up the Chinese marketplace to UK film productions, announced during his trade visit to the country.

China's quota system for films means that only 34 foreign movies a year are allowed, but the deal means that co-productions between British and Chinese producers can sidestep the quota.

"People have started calling it Chollywood, but really it's Chinewood - British films linking up with Chinese partners to access the second highest box office audience in the world," Cameron said, referencing major British film studio Pinewood. "This is a significant step forward for the British film industry, opening the door to a market that is building seven cinema screens a day." The BFI's CEO Amanda Nevill, who travelled with Cameron to China, added that next year would see the launch of "the biggest-ever exchange program celebrating Chinese and UK film."

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This growing market was highlighted earlier in the week by the BFI's David Steele, who argued that amid poor profits for many British films, "in the most rapidly growing part of the world economy we are underpowered so something has to be done."

China has already been courted by Hollywood through various films being at least partly set in the country, including Iron Man 3, The Karate Kid and Looper. Last month the China Film Co-Production Company president Zhang Xun said that in order to gain access to their market Hollywood films would have to be "heavily invested in Chinese culture, not one or two shots... We want to see positive Chinese images." James Cameron has said he is considering Chinese characters and settings for his Avatar sequels.

Another boon for the UK film industry came amid the Chancellor's autumn statement, where George Osborne announced that films only need to now spend 10% of their budget within the UK to qualify for tax relief, where previously they had to spend 25%. Tax relief would be applied to 25% of the first £20m of a production, and 20% on any remaining budget, regardless of the overall total; previously only films under £20m were eligible for the higher rate.

The cultural test, for determining whether a film is 'British' and can be eligible for tax relief, has been made more lenient, encompassing 'European' as well as British culture. Adrian Wootton of the British Film Commission welcomed the news, saying: "The tax relief was a game changer when introduced in 2007 and today's announcement ensures we can continue to grow our industry, boosting the UK economy and creating British jobs."

Also included in the announcement was the news that £5m will be invested in the National Film and Television School on upgrading its Digital Village campus in Beaconsfield.

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