The China Opportunity:

A New Strategy for Sustainable Australian Screen Production

Published: 5 Jan 2026

Australian producers are world-class at making content

The challenge we now face is not creative capability, but how we finance and scale that creativity sustainably in a changing global market.

Australia’s screen industry is experiencing a structural imbalance: there are more capable projects than available capital. Government support through Screen Australia, state agencies, and tax offsets remains vital—but it is finite. The result is a bottleneck that limits output, concentrates risk, and leaves commercially viable projects unfunded.

The solution is not to rely on ever-greater public subsidy alone. It is to look outward—to build international partnerships that expand access to commercial capital, expertise, and audiences. Among these opportunities, China stands out. Not as the only path forward, but as one of the most compelling for producers willing to think strategically.

Traditional Markets Are Resetting

For decades, Australian producers have looked to the United States and the United Kingdom for co-production opportunities and market access. This was a rational strategy: both markets offered scale, infrastructure, and global distribution reach.

That environment has changed.

Since the end of the pandemic-era streaming expansion, both markets have entered a period of structural recalibration. The combined impact of the 2023 labour strikes, rising production costs, consolidation among studios and streamers, and a pullback from volume-driven commissioning has led to lower overall production activity, particularly for independent and internationally partnered projects.

Industry indicators consistently show:

  • Reduced commissioning volumes compared to peak “streaming boom” years

  • Sustained declines in on-the-ground production activity, especially in traditional production hubs

  • Greater competition for fewer greenlights, with studios prioritising internal IP and lower-risk formats

In the United Kingdom, volatility has been pronounced. While high-end television and inward investment have stabilised parts of the sector, film production spend experienced a sharp downturn in early 2024, and recovery since has been uneven and highly project-specific.

For Australian producers, the implication is clear: traditional Western markets remain important, but they can no longer be assumed to provide consistent scale, capital, or access.

The Limits of a Domestic-Only Model

Australia’s own production ecosystem is under growing pressure.

Screen Australia’s 2023–24 Drama Report shows:

  • Average production budgets fell well below recent historical norms

  • International investment fell to its lowest level in a decade

  • Nearly half of all new feature films were produced on budgets of just A$1–5 million

The conclusion is unavoidable: the domestic market alone cannot sustain globally competitive production at scale.

Australia’s creative talent and technical capability remain world-class. To translate that strength into sustainable businesses and internationally resonant content, producers must integrate international finance, distribution, and audience access into their development models.

Where Scale Still Exists

If traditional Western markets are contracting or plateauing, Australian producers must look to regions where scale and audience demand remain durable. Increasingly, that means Asia.

Australia has expanded its international engagement across the region, including new co-production frameworks with India and growing collaboration in Southeast Asia. Yet in terms of market scale, China remains in a category of its own.

China’s film market demonstrated strong performance through 2025, reinforcing its position as one of the world’s largest theatrical markets. Official reporting indicates annual box office revenue exceeded 50 billion yuan (approximately US $7 billion+), supported by high domestic attendance and strong local releases.

The Spring Festival (Chinese New Year) period continues to be a global outlier in audience concentration. In 2025, the holiday window generated more than 10 billion yuan (nearly US $1.4 billion) in ticket sales alone—setting new records for the period and underscoring the depth of domestic demand.

For perspective:

  • India’s box office, while substantial, operates at a significantly smaller aggregate scale

  • Southeast Asia’s combined markets remain fragmented and comparatively modest

  • Australia’s domestic box office represents only a small fraction of China’s annual theatrical revenue

These comparisons are not about cultural preference. They reflect market scale and financing reality.

A Treaty Advantage Already in Place

The Australia–China Co-Production Treaty, in place since 2007, provides a formal legal framework for collaboration.

Certified co-productions are treated as domestic productions in both markets, allowing them to:

  • Operate outside China’s foreign film quota system

  • Access incentives and policy support on both sides

  • Be distributed in China as local content

The existence of the treaty does not guarantee success. Regulatory complexity, cultural alignment, and distribution access remain critical challenges. But for producers prepared to engage seriously, the framework offers structural advantages unavailable through simple export models.

Beyond the Export Mindset

Too often, projects are developed primarily for a domestic audience and only later adapted for international markets. This approach is increasingly ineffective.

To compete globally, projects must be conceived from the outset for multi-market relevance, both creatively and financially. That requires partners, not simply investors.

Successful collaboration in Asia depends on:

  • Relationships with trusted local producers and distributors

  • Cultural intelligence around audience expectations and regulatory frameworks

  • Cross-market development capability that allows stories to travel authentically

  • Distribution access that ensures content reaches audiences in-market

No single producer or company can master all of this alone. Sustainable international engagement depends on ecosystems built on trust, experience, and long-term commitment.

A Collective Effort

Industry bodies such as Screen Australia, state agencies, Ausfilm, and guilds play a vital role in market intelligence and early-stage risk reduction. But producers themselves must lead the strategic shift.

That means:

  • Designing internationally viable projects from inception

  • Building enduring overseas partnerships

  • Investing in market literacy and regulatory understanding

  • Sharing knowledge across the Australian industry

  • Embracing genuine co-production—creative as well as financial

The global content economy rewards scale, agility, and partnership. Australia must participate on those terms.

Legend’s Position

At Legend Media Group, we are actively building this future.

We develop projects and partnerships that combine Australian creative excellence with Asia’s market scale, aligning story, finance, regulation, and distribution from the outset.

Cross-cultural production is complex—but the fundamentals are strong:

  • China’s scale is undeniable

  • The treaty framework exists

  • Australian creativity remains world-class

What is required now is collective intent—to look outward, build durable partnerships, and pursue opportunities beyond our borders.

This is not about abandoning Australian stories or diminishing the role of government support. It is about expanding the ecosystem—accessing more capital, spreading risk across larger slates, and building sustainable production businesses capable of competing globally.

The opportunity is real. The moment to engage is now.

Sources & Notes

Market observations and industry trends referenced in this article draw on publicly available reporting and data from sources including Screen Australia, the British Film Institute (BFI), FilmLA, industry trade publications, and official reporting from the China Film Administration and major Chinese news outlets. Box office figures are rounded and reflect the most recently reported full-year and holiday-period results available as of 2025–2026.

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