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Movie Theater Construction Booming in China

Entertainment and movie going is booming in China

As China's middle class grows, the demand for entertainment is being met with a boom in cinema construction. In a country where 300 million people are said to be able to afford movie tickets and where many want to see films like "Avatar" in new plush multiplexes, real estate developers and theater owners are getting to work.

While Chinese movie makers have been prolific in recent years, now the Chinese are becoming avid movie goers and there's a boom in movie production.

Recently, director Dayyan Eng brought Hollywood actor Kevin Spacey to China to shoot a bilingual comedy. Eng says the multi-million dollar investment in the film shows that the number of Chinese into movies is on the rise.

"As more movies that people in the big cities are watching," Eng said. "My feeling is, you know, more and more of the audiences there get a taste of other types of movies out there."

China's economy has been developing at breakneck speed. More disposable income means a greater demand for entertainment. In 2009, box office revenue grew by 43 percent to $1 billion.

Nowadays, many people here are ready to spend upwards of $6 for a movie ticket.

And that makes movie theaters - in shopping malls - an attractive investment.

Many developers paying high prices for real estate want a multiplex to help cover the cost. They hope to draw that new middle class demographic, says Savills Real Estate's Matt Brailsford.

"Shopping centers are huge in China. Fifty-thousand square meters is considered a tiny shopping center, which anywhere else in the world is considered a pretty significant center," Brailsford said. "So, if a developer has 100,000 square meters to let, having an anchor tenant in a cinema take quite a bit of that space off their books is handy."

Today, China has only 4,000 movie screens. That's one for every 75,000 moviegoers, just one-tenth the number of screens in the United States.

Yang Liu is Managing Director of Huayi Brothers Media Corporation, a production house and movie distributor. The company opened its first multiplex theater in mid-June, becoming the latest firm to expand into movie houses.

"China is underscreened. There's a demand for cinemas, and anything that will help increase the cinema going, improve the cinema going environment, will ultimately be a positive stimulus for the film production business," Liu stated.

As China recovers from the recession, movies could fuel consumer spending. The government forecasts a 61 percent jump in gross ticket sales this year, which could turn the nation's new silver screens into box office gold.