Chinese Government Recognizes ‘Kung Fu Panda 3′ As A Co-Production


Just one day after DreamWorks announced the layoff of 500 employees, media reports confirm that the Chinese government has granted co-production status to Kung Fu Panda 3.

Dreamworks Animation, its China unit Oriental Dreamworks and their Chinese partners China Media Capital, Shanghai Media Group and Shanghai Alliance, filed and received co-production status for Kung Fu Panda 3 on January 15, according to China’s State General Administration of Press, Publication, Radio, Film and Television (SAPPRFT).

While it was already well established that Kung Fu Panda would be produced with the help of Chinese investors and some of the production would be done in China, it was not clear until now whether the film would receive co-production status. The status is coveted by American studios because it means the film will be treated as a domestic product in China, bypassing the blackout regulations and import quotas for foreign films. DreamWorks and its partners will also receive a larger share (43%) of Chinese box office receipts.

  • Skip

    So Dreamworks lays off 500 artists, while outsourcing production over seas. This is like pouring salt on an open wound in my opinion. I loved the first two Kung Fu Panda films and I was looking forward to the third, but if this is how Dreamworks business model is going to work moving forward, I will avoid KFP3 all together.

    • Brett Wharton

      I know what you mean, but I think we will probably end up with a few hundred protesters, and billion viewers. The strategy makes sense financially. It’s just a sad loss for the American employees.

    • Turtleneck

      As hard as this may be to believe, this is all about boxoffice percentages. An American studio releasing a film there only receive about 10% or so of the boxoffice takings, having the film declared a co-production increases that yield significantly. It’s good business, and frankly has very little to do with willfully outsourcing jobs. All major studios are attempting to do this, while at the same time keeping the important major creative work here.

      But to your main point, a friend who works in live-action vfx was recently decrying the lack of upcoming work in LA, and was wondering what her options were. As a European, I’ve been moving from country to country for over twenty years, following the work from city to city, hotspot to hotspot. I suggested she had two options: get to like airports, or work to get into supervisory roles. The higher up the totem pole on the creative side you are, the less likely you are to have to move about. The halcyon days of working at a studio for fifty years are over (they never existed in Europe so I don’t miss them) but the upside is that you’ll get to see the world, work in many different places with different cultures, and have some extraordinary experiences along the way. Make it work for you rather than bemoaning something that at this point is utterly unreversable.

    • Fried

      Welcome to business. Maybe when they actually get back on their feet, they’ll be able to re-open jobs in the states, but why force a financially unstable studio to go through costly measures just to make a film or two when they can, hopefully temporarily, outsource and get back to stability? Just because you’d prefer it? Your preference doesn’t matter when a studio is draining themselves of money.

      Being disgusted if a studio outsources when they clearly have enough not to do so (Like, if Disney outsourced their films) is one thing, but to have the same reaction from what is essentially a dying studio… Dunno, you might have to rethink your principles on that one.

  • Alex

    If CG films are as popular in China as I’ve heard this could really help get DreamWorks back on their feet. And from what I’ve heard I don’t think we are in danger of DreamWorks outsourcing all their work.

    • WarriorMermaids

      The first two KFP films did extremely well in China. I wouldn’t be surprised if the third one is even more successful.

  • VFX Soldier

    Always love the outsourcing boogeyman argument.

    OH MY GOD THEY ARE SENDING IT ALL TO CHINA!!! Well not really. Transformers 4, and Iron Man 3 got co-production designation. We’re they all done in China? No.

    The co-production designation is so Dreamworks can be allowed to show the film in China and get a bigger cut of the revenue. None of this requires the work for KFP be done in China. None of the jobs being removed are being replaced by people in India and China.

    The facility in Shanghai isn’t even majority owned by Dreamworks. The pipeline is completely different. They are working on their own local chinese content.

    Something to consider though: Dreamworks has had an India facility for years. The cost of labor in Shanghai is way more than India. If all the work can be sent overseas why hasn’t that be proven with India? India was supposed to do all the work for Mumbai Musical and Penguins. Much of that work came back to be done in California.

    The real issue of concern should be subsidies. That’s where the game will go. Producers will look to move a talented and capable workforce to places like Canada where they can get the government to pay 58.4% of resident labor costs.

    And this is demonstrable: Lego Movie, SPA movies, Illumination Entertainment Movies, Blue Sky movies. Where are all those being done? Not in cheap labor locations like India and China but expensive places like Canada, Australia, and Connecticut. Why? Because their government pays producers to have the work done there.

    How long will that last when those governments cant afford to continue? Free money isn’t free forever.

    • Ccs

      You’re right, but they care about quarterly or yearly profits, and polticians care about the next elections, and saying that they can create jobs right away. Most don’t care if the system fails 5, 10 years down the line unfortunately.

    • Iker

      1.- Your opinions are flawed since they are ‘California-in-the-center’ based opinions. My guess is that people in Canada, France, Spain or UK will be more than happy for the subsidies, since that way they have easier access to Hollywood productions. So I guess you will not find a lot of support outside this state (I might be wrong, of course).

      Oh, and about ‘moving a talented and capable workforce’… as if other countries did not know anything about this sector. Come on, man…

      2.- Once more, DWA and other are private companies, not non-gubernamental organizations. Of course they want the maximum profit at the fewest costs! Would you not want the same if you had your own company? I’m not saying they do not care about the workers, but market decissions do affect individuals, hence letting people go (and hiring as well) is a direct consequence of that.

      3.- How are you going to change the mind of the local California government to offer subsidies as well? Or to change the other states or countries opinions about that fact, and stop offering them? In a world where that happens more often than not, I’d say it’s impossible. And if you are thinking about chaning California laws to avoid outsourcing, or to charge large amount of taxes for those who do that, companies will find a way to go around that. As it is happening already in other industries.

      4.- Is it nice for you and your family travel from country to country looking for a job? It depends. Is it what the rest of the world is forced to do to make a living working in animation or VFX? Read Turtleneck’s post.

      5.- And I am deeply sorry for the lay-offs, just in case someone thinks otherwise ;)

  • Boycott Outsourced Animation

    I personally will NOT be paying money to see “Captain Underpants”, and now “Kung Fu Panda 3″, or any other DW outsourced production.

    I suggest others follow, and boycott any production put out by Dreamworks Animation that is not animated here in the US.

    If you pay money and go see these productions, you’re telling JK, and the board at Dreamworks, “Yes… We support your decision to take jobs away from Animators in the United States, and give them to other countries. We support your decision to squeeze a penny, and take paychecks away from US workers that you employed in the past.”

    • Kusanagi

      Not every reader on this site is an American. I’m not going to boycott a production such as “Captain Underpants” because it might end up being animated by Canadian workers. After all I’m Canadian and want to see Canadian artists get work. I wouldn’t waste my time and dollars to see “Captain Underpants” because it sounds like an idiotic concept for an animated feature film. The whole thing sounds more appropriate for a low budget Nelvana TVtoon than for a feature film.

      • Boycott Outsourced Animation

        Did I make claim that everyone here was American? No.

        I’m simply stating, that I suggest EVERYONE boycott American studios outsourcing work to ANY country. I can appreciate you’re Canadian, and want to get work….But you want to do it by stealing money out of US workers pockets?

        • Alex Dudley

          It’d be more effective to go out and protest at a movie theater.
          Boycotting will have no effect, especially since families and kids who will see these don’t care where a cartoon is made, let alone how it’s made.

          Plus why stop there? Maybe we should boycott animation on television that’s outsourced, which is almost all of them.
          I won’t participate in such an endeavor but I wish you luck convincing people to go along with it.

        • Iker

          I think you are shooting the wrong person here, and using the wrong terms. ‘Stealing’? Do you think the same when you pull your cell phone (most likely assembled in China) out of the pockets of those pants (most like crafted in Bangladesh) to check your messages? The question no one seems to answer is ‘why animation/VFX should be treated different than the hundreds of other industries where outsourcing is something normal’. I’m not saying I agree with it, but that does not stop it from happening. One answer you might think is ‘no one does animation/VFX like we Americans do’. That makes you an excellent patriot, but does not mean you are right.

          Is it Canadians fault that a company like DWA decide to take the production there? At some point, you could blame their government to offer subsidies to studios. But as you want the best for California and the jobs to stay here, they want the best for their country too, and they believe by doing that they could improve their economy, I guess. Hence your reasing is evened out by theirs.

          I’m from Spain, worked there, worked in the UK and now IU work in the US. And I’m aware that the industry is not what it was 30 years ago. So if the moment arrives and I have to move to keep making a living from what I do, so be it. Although one can lose his or her job if the company decides to outsource, there’s a bigger scope, and I’ll be glad that other people is able to have the opportunity that I had once when I started. Animation is not exclusive of the United States, and it should not be. I wish studios’ reasoning was as philantropist as this, but while it’s not, it is a direct consequence: people from abroad working on what they love as much as you do.

          And people like you keep forgetting that doing what you love in your day by day work is not a right: it’s a privilege.

  • ThatGuy

    Gee. What. a. shock. *_________________*

  • Dave

    Let me explain how this works: ODW has a completely different pipeline; it is fairly impossible for the Chinese to help out on American productions (unlike India). The work that will be done is post-process new lipsync so they can offer the film in more languages without subtitles. That is it! Having this designation means DW will keep around 43% of the profit there, rather than 10%. With this designation the Chinese have a great sense of national pride and go to see it in droves, and DW survives happily ever after.