We've recently looked at China's drive to challenge Blu-ray and HD DVD for a place at the HDTV table , but little is known in the West about the extent of movie piracy in the Middle Kingdom. To shine a light on the extent of the problem there, the Asia-Pacific division of the Motion Picture Association has revealed the startling fact that 95 per cent of films sold in China, whether on VHS, VCD or DVD, are illegal copies. Moreover, the greatest damage is to China's own film industry - domestic losses in 2005 are estimated at $2.5 billion, a fraction of the $280 million lost to North-American studios.
Although the international losses are relatively small, part of the reason for that is the simple fact that Hollywood movies aren't always available in China. When it joined the WTO, China agreed to a quota system that permits only 20 foreign films per year to be shown in cinemas.
Clearly, if the market were completely open, Hollywood would stand to both gain and lose considerably larger sums of money.