There’s No Business Like (Chinese) Show Business? A Glimpse into China’s Entertainment Industry


Here at, we have developed the habit of mentioning the fact that longing Chinese assets without meaningfully “betting” on China’s rising middle class is a sub-optimal strategy at best. For reasons which range from China’s growth model transitioning from production/exports/infrastructure to domestic consumption to a wide range of metrics which paint the picture of a generational trend taking place with respect to China’s middle class (we have an article dedicated to just that, which can be accessed by clicking HERE), this demographic represents the elephant in the room… to put it mildly.

What does “betting” on China’s emerging middle class mean?

Simply put, it means figuring out when Chinese middle class members reach for their proverbial wallets and being there so as to secure a slice of that pie by gaining exposure to assets which enable Chinese middle class consumers to satisfy their needs.

The entertainment industry most definitely represents one of the top contenders in this respect.

Moving on to the nature of entertainment consumption habits among Chinese middle class members, it is worth noting that yes, Western entertainment products play a crucial role but they are most definitely no longer the only game in town.

To put it differently, yes, Western entertainment industries (Hollywood, for example) have been and still are doing remarkably well in China, especially in light of the fact that the bureaucratic red tape volume has been reduced considerably over the years. As such, the Chinese consumer watches let’s say Game of Thrones pretty much in tandem with his Western counterparts.

However, it is vital not to give into the temptation of assuming an “exogenous only” attitude when it comes to entertainment, in other words assuming that China’s emerging middle class will do nothing more than add to the consumer base of Hollywood productions, Western entertainment outlets and so on.

That is most definitely no longer the case in light of the fact that:

  1. Chinese consumers have needs and tastes of their own. While there are oftentimes common denominators with their Western counterparts to be identified, it has been proven that merely copying Hollywood or importing Hollywood products can only get you so far, with there even being negative Q/Q growth when it comes to this entertainment product class. From consumer habits such as mobile content consumption to tastes when it comes to movies and a wide range of other productions, entertainment industry players are coming to terms with the fact that this market needs to be treated as a separate entity rather than something which can be “annexed” to the West for result maximization to be possible
  2. Chinese productions are becoming more and more elaborate as well as successful. For example, the Chinese production “The Wandering Earth” has done so well in early 2019 that the shares of its two producers literally soared. For example, Beijing Jingxi Culture and Tourism Co shares skyrocketed by 10% as of the beginning of the February 11 week. The same way, developments such as the Chinese State Circus returning to the United Kingdom and the Shen Yun production doing remarkably well make it clear that China is not just a consumer in the entertainment industry, it is also a trend-setter
  3. Domestic players such as the (in)famous BAT trio (Baidu, Alibaba and Tencent, which have been covered through a article which can be accessed by clicking HERE) are well-positioned as well as well-funded enough to corner various entertainment industry niches, just like they have done in the social media space (once again, the Chinese social media sector has been covered through a dedicated article which can be accessed by clicking HERE)

To put it differently: entertainment industry opportunities abound and they are most definitely not just opportunities pertaining to Western trends/productions that China is eager to import. On the contrary, a compelling case could be made that the elephant in the room is represented by domestic growth, with Chinese companies arguably just beginning to spread their wings.

Would it be a bad idea to gain exposure to assets associated with Western entities that are well-positioned in China?

Not at all.

Would it be optimal if your goals revolve around maximizing results when it comes to the entertainment dimension of China?


The name of the game, as tends to oftentimes be the case in China, is keeping your ear to the ground and identifying opportunities that are either just beginning to germinate or that have already been established but the proverbial low hanging fruit hasn’t been picked completely just yet.

As always, seeing things through a Western-only lens and taking action accordingly, while better than not taking action at all, is still sub-optimal.

Instead, those who take the time to meaningfully “get” China are the ones who end up being generously rewarded. And to that effect, the team will happily put its expertise at your disposal to help you identify opportunities in the Chinese entertainment industry (and beyond) which are usually overlooked by Western market participants.

We do not shy away from rolling up our sleeves and going granular, as that tends to be the dimension where asymmetrical risk to reward opportunities present themselves. In our opinion, neither should you. At the end of the day, it is next to impossible to do well in a jurisdiction as unique as China without putting in the work, either by conducting the necessary research/due diligence yourself or outsourcing to an entity such as which specializes in just that. Should you choose the latter, simply reach out by sending us a message through the Contact section of and we will get back to you with further details.

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