TOKYO - In a remarkable show of resilience, Chinese moviegoers are demonstrating there are still sectors of the nation's economy that are strong. In early December, year-to-date box office revenue topped 40 billion yuan (S$8.72 billion) for the first time, up 48 per cent compared with the previous year. That puts China on track to overtake the US as the world's largest movie market as early as 2017.
The exponential growth - 6.8 times faster than official growth figures for gross domestic product - comes from an increase in movie screens (and fans) in smaller cities. Between 2010 and 2014, compound annual growth in the number of screens in smaller tier 4 cities of 3 million to 4 million people, such as Jilin, Yangzhou and Anshan, was 80 per cent, according to a recent report by HSBC, a bank.
Along with travel and sportswear purchases, cinema has emerged as one of a select few categories that continues to reflect the rise of the middle class in China. The same cannot be said for purveyors of luxury brands, which could close "one store per month" in China, according to the Financial Times.
That disparity is a puzzle for multinationals planning their next move. US-based think tank the Demand Institute noted in a recent report that "the prevailing narrative that companies should move into tier 3 and tier 4 cities is misleading," and that "the notion of a middle class is inadequate as the foundation of a growth strategy."
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