China Pours Subsidies Into AI Filmmaking, Betting It Can Industrialize the Sector

China is mounting a state-backed push to turn AI-generated film and video into a globally competitive industry, with local governments across the country offering AI filmmakers cheap rent, computing subsidies, and cash funds to relocate or expand. Production costs for AI short dramas have already plummeted — falling from 5,000 yuan per minute to just a few hundred yuan in the first half of 2026, according to state broadcaster CCTV — while the National Film Administration has approved the first AI-produced theatrical feature, the 90-minute sci-fi epic "Sanxingdui: Future Memories," for public screening. Major platforms like iQIYI are going "all-in" on AI content, and cities from Shenzhen to Shanghai to Beijing are competing to host studios.

The rapid scale-up carries familiar risks. DataEye figures show that of 221,900 AI shows launched on Douyin in the first half of the year, only 1,055 crossed 100 million views — a widely used success benchmark — raising concerns about overcapacity mirroring China's experience in EVs and solar panels. Copyright questions also loom over the sector as domestic AI content supply surges well ahead of proven audience demand.