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Story highlights

Hollywood is catering to China with plotlines and product placements

But China has yet to make an international blockbuster movie

China's movie market hit $6.78 billion in 2015

(CNN) —  

When Tony Stark uses a Chinese smartphone, China’s clout in Hollywood becomes crystal clear.

In “Captain America: Civil War,” the billionaire hero who builds his own hologram interfaces and super suits chooses to wield a transparent concept phone by Vivo, a brand sold only in China.

It’s just the latest example of how Hollywood is appealing to China in the midst of a major box office boom.

Last year, China’s movie market surged 49% to reach $6.78 billion, while the North American market grew around 8% to $11.1 billion.

China’s cinema build-out is also powering ahead at a breathtaking rate.

There are currently more than 31,600 cinema screens in China. Last year, it added an average of 22 screens a day.

“The world’s biggest population has time and they have money,” adds Shanghai-based correspondent for the Wall Street Journal, James T. Areddy.

“For the first time, people are working five days a week, they have their weekends off, they have their car … and they are looking for some kind of entertainment.”

READ: Can Chinese movies take on Hollywood?

Goofy comedy

Fueled by a rising economy and a building boom, industry watchers agree that China will be the world’s largest market for films in the next few years.

“When I moved to China in 2003, China’s box office was smaller than Hong Kong with 6 million people. It’s now the second biggest in the world and very soon it will be the biggest,” says Clifford Coonan, Irish Times correspondent and former Asia Bureau Chief for The Hollywood Reporter.

Earlier this year, China’s movie-going masses flocked to see “The Mermaid,” a goofy comedy that became the country’s highest-grossing movie ever made.

Within 27 days of its release, it crossed the $500 million mark domestically – a major milestone in Chinese cinema. But outside China, “The Mermaid” failed to make a global splash.

“Watching people fall into swimming pools and get wet and having bad things happen to them, in a way that’s hilarious” says Areddy. “But it’s hard to see it playing in the West in the same way it does here in China.”

Ultimately, “The Mermaid” earned a paltry $3.2 million in North America.

01:14 - Source: CNN
Entertainment industry thriving in China

Deep blow?

China may be posting blockbuster numbers at the box office, but it has yet to bring a blockbuster movie to the international market – a deep blow for a government that sees media and entertainment as core to building China’s soft power.

To jumpstart a Made-in-China hit in the global marketplace, Chinese authorities have announced a plan to give any local film that earns more than $150,000 overseas a reward equivalent to at least 1% of the film’s international box office.

“It’s kind of a dream, our goal for the government and for domestic filmmakers,” says director Lu Chuan. “People are working hard to try to create jobs, create a product and influence the Western audience. But there’s a long way to go.”

One of China’s most celebrated younger film directors, Lu first became known overseas for his 2004 thriller set in Tibet, “Kekexili: Mountain Patrol.” More recently, Lu directed “Chronicles of the Ghostly Tribe,” which surpassed $100 million in China within weeks of its release.

He is now wrapping up post-production of the Disneynature movie “Born in China,” and is attached to produce and direct the film adaption of best-selling memoir by New Yorker journalist Peter Hessler, “River Town: Two Years on the Yangtze.”

Lu is also unafraid to challenge convention. His third film, 2009’s “City of Life and Death,” was a commercial success that also received critical notice for its sympathetic portrayal of Japanese soldiers during the Nanjing Massacre, prompting many to wonder how he got his film past the censors.

“If you face some problem, just talk and negotiate,” Lu says. “China is a society of ‘ren qing’ – or people’s feelings – you need to talk. If you talk with somebody in charge, maybe you can change the fate of your movie.”

01:16 - Source: CNN
Chinese investors influence Hollywood

China friendly plotlines

But while Lu gently pushes back, a number of Western movie producers are appealing to Chinese authorities and advertisers with China-friendly plotlines and product placement opportunities, prompting many movie fans to wonder if Hollywood is afraid to use a Chinese villain in their movies.

“The Chinese state shows no cracks in its control of content that reaches people,” says Areddy. “It raises the question about whether it has been a hindrance to making the successful global movie.”

An important test case for China will be the upcoming movie, “The Great Wall” – the first film to emerge from the Legendary East unit of Legendary Entertainment, the Hollywood studio recently purchased by Chinese tycoon Wang Jianlin.

With a reported budget of around $135 million, the fantasy action film is directed by celebrated Chinese director Zhang Yimou and stars Matt Damon and Andy Lau among others. It’s set for a worldwide release in early 2017.

“If it works, it could change the whole industry,” says Coonan. “If it doesn’t work, I don’t think the industry is going to suffer, but people will start rethinking things again.”

China may be a world power, but it’s not an entertainment power just yet. Lu Chuan says he feels the pressure to change that.

“The last year I’ve been to Los Angeles 11 times. I am trying to learn how the big studios work on movies, and I’m reading a lot of English scripts,” he says.

“It’s my dream to work with talented American scriptwriters and producers. That will help me make my next movie bigger and more beautiful.”