China Film Group reaps big profits from the country’s growing cinema audience, but there is a dark side when local authorities deem a film unpatriotic or too sexually explicit.

State-endorsed film importer China Film Group this week announced 12 of the US films that would be released in the world’s fastest-growing box-office market in 2010. Under the revenue-sharing scheme, 20 predominantly US films are brought into the country each year with 13-17% of gross going back to the US distributor. For a blockbuster like Avatar, which has grossed over $200m in China, that means that Fox is only getting at most 17% of the gross. China Film itself is thought to take around 30%-40%, which in the case of Avatar, would mean at least $60m. While China Film also takes care of marketing costs, the message is clear. The massive and fast-growing theatre audience for movies in China – and the money they spend on film tickets – for the moment belongs to China.

Also this week, the government launched an English-language website on Chinese-language films and the Chinese film industry at It’s an indication of the value which China assigns to its local industry and how carefully it is nurturing a star system, product line and mass audience for its films. Naturally this homegrown product gets preference over Hollywood films in terms of theatre bookings and publicity. And Hollywood should be worried: these films aren’t necessarily inferior. Some master directors and technicians are at work in China and production values are improving all the time.

If it sounds like a controlled manipulation of production and audience, it isn’t that far removed from France — where the local industry has been buoyed and massaged for decades by the government. It’s a cultural imperative envied fiercely by other nations.

But then there is a darker side to the Chinese mix of politics and film.

At the Hong Kong International Film Festival this week, Chinese actress Tang Wei walked the red carpet for a new Hong Kong film called Crossing Hennessy on opening night.

A beautiful, charismatic and talented performer, Tang made her film debut three years ago in Ang Lee’s Lust, Caution, dominating every frame of the sexually charged film and holding her own against major star Tony Leung. But the Chinese authorities, reportedly disapproving of the film’s graphic sex scenes and the “unpatriotic” behaviour shown in the film, subsequently blacklisted Tang. A media ban was imposed on any TV appearances or ads (she was the face of cosmetics company Ponds at the time) and she was replaced in The Warrior And The Wolf, Tian Zhuangzhuang’s film in which she had been scheduled to star.

In the three years since Lust, Caution, her contemporaries have worked non-stop but there has been no sign of Tang Wei until now. Aside from Crossing Hennessy, she has completed another film, Late Autumn, with Korean director Kim Tae-Yong in the US. But the China-born actress has yet to be cast in a Chinese film. Meanwhile the disapproval felt for Lust, Caution in Beijing appears not to have damaged the careers of Ang Lee or Tony Leung.

Sex really wasn’t the problem in Lust, Caution; if it was, it’s unlikely that China Film would have approved Sex And The City 2 as one of its revenue-sharing releases this year. But storytelling deemed unpatriotic – Tang Wei’s character in Lust, Caution ultimately fails to turn in her collaborator lover to the authorities – is an issue.

Hollywood meanwhile continues to pursue a share of the mushrooming Chinese market, however unfavourable the terms from China Film. And among the 12 films approved for release this year are a couple which show the dark side of America. Green Zone from Universal suggests that the US invaded Iraq in the knowledge that there were no weapons of mass destruction there. And Fox’s Wall Street 2: Money Never Sleeps is set to be another slice of corrupt capitalism courtesy of Oliver Stone.

Aside from Alice In Wonderland, the newly named US releases are pending approval from China’s film censors. But unpatriotic stories from western film-makers are apparently welcome.