Warner Bros. marked its latest push into the fast growing Chinese film market at the weekend with a gala opening of its newly approved joint venture multiplex in Shanghai.

The company also expressed confidence that regulatory reform in the industry was on track. Millard Ochs, President of Warner Bros. International Theatres told local government and industry heads, celebrities and reporters that despite reports to the contrary, he expected the present 49% foreign ownership cap on cinema chains was on schedule to be lifted.

"The recent announcement that Hong Kong exhibitors may increase their ownership up to 75% is a good indicator I hope for foreign investors generally," said Ochs, referring to the Hong Kong-China trade liberalisation agreement, signed in June. Warner Bros. would push for the cap to be lifted to 51% in ongoing negotiations with the Chinese authorities. "We are hoping that will be approved, " he said.

The remaining 51% stake in the nine-screen, 1,490 seat Paradise Warner Cinema City complex is held by the Shanghai Paradise Cinema Company, a division of the state-owned Shanghai Film Group. The Group is Shanghai's major distributor and operates 75% of the city's commercial screens.

The multiplex has been operating with the financial and managerial assistance of Warner Bros. since February 2002, but this opening marked the official approval of the joint venture, and in a first for mainland China - the right of a US film major to brand a cinema venue.

The opening ceremony included the unveiling of murals incorporating Looney Tunes characters and an advanced preview screening of The Matrix Reloaded.

The cinema, one of only six five-star venues on the mainland, has also proved to be one of the most successful. Since opening, it has pulled a total audience of 1.04m and US$4.74m (RMB38.89m) at the box office.

The company also used the gala event to officially announce the set up of a new integrated distribution and co-production office in Shanghai - making Warners the first of the film majors to have such a significant official presence in mainland China.

The office is slated to open in late 2003, headed by managing director for China Ellen Eliasoph. (Screen Daily, June 24, 2003)

Eliasoph said it was too soon to assess the impact of this years' opening up of China's foreign film distribution monopoly, currently held by the China Film Group, to a second official distributor, Hua Xia.

As yet no Hollywood blockbusters have been allocated to Hua Xia. This has prompted fears that this new competitor could be strangled at birth, and its summer 2003 offerings (led by Hong Kong action hero Jackie Chan's latest The Medallion) would be swamped by China Film Group's extensive slate of import films - including Terminator 3 and Charlie's Angels: Full Throttle, both due for China release this summer.

The Shanghai joint venture partners said competition in distribution would progress. "In addition to the two distribution companies now operating, I expect there to be more in the future," said Paradise Warner Cinema executive general manager, Zhu Zhongxiang.