Animation is hot. There is a huge demand for cartoons, and artists can't draw them quick enough to keep up.

And yet the producers of animated works in China mostly lose money.

The problem defies logic, but producers' willingness to continue turning out cartoons encapsulates the euphoria for animation that grips China today.

Call it animation, cartoons or comics. The names are not totally interchangeable, but they overlap to such an extent that people sometimes use one to cover all bases.

In Chinese, the traditional name "donghua" is giving way to the newer "dongman" as the all-encompassing tag.

The popularity of 'animation,' for lack of a more inclusive term, is both projected and very much a reality.

Movies such as "The Lion King" and "Finding Nemo" were runaway hits in China and Japanese anime is in high demand.

Young people seem to love cartoons yet profits are elusive.

According to Variety China, a Beijing-based trade publication, the country's animation market, including comics, is estimated at 20 billion yuan (US$2.5 billion). The annual demand for animated programs runs up to some 263,000 minutes, but domestic animation studios can only turn out 20,000 minutes.

That leaves a gaping hole, and the central government has issued a series of regulations to spur the growth of domestic animation by keeping foreign fare which once took 90 per cent of the Chinese market at bay.

In 2004, the State Administration of Radio, Film and TV (SARFT) ruled that no foreign programming be allowed during prime time and the ratio of domestic to foreign programming be kept at 60-40.

Later that year, three cartoon channels were launched by Beijing, Shanghai and Hunan television stations. The three operations now broadcast a total of 20,000 minutes of animation every year.

The craving for quality animation was evident at this year's first China (Beijing) International Student Animation Festival, which ended in late May at the Communication University of China (CUC) in Beijing's eastern suburbs.

Students swarmed into theatre-sized halls to watch and applaud animated works from Germany and Japan as well as some of the best domestic fare.

Xu Shunxiang, a 23-year-old senior at the CUC Animation School, was optimistic about prospects for the animation market. "I'm looking for a job in a media company. I want to be a director of animation," he said. "I've learned a lot from the forums at the event. Whereas in the classroom we are taught the details of using software, we can catch a glimpse of the big picture here."

Poised for a revival

China has its own equivalent of Walt Disney in the Wan brothers, who took China's animation to unprecedented artistic heights but, unlike Disney, never made it into a business empire.

In 1941 in Japanese-occupied Shanghai, Wan Laiming and his three brothers produced the first animated feature in China, titled "Princess Iron Fan." In the early 1960s, Wan adapted the epic story of the Monkey King into a two-part feature with the technical brilliance to rival masterpieces from Disney, students of the genre say.

In the early 1980s many notable animated shorts and features were produced by the Shanghai Animation Film Studio, using distinctly Chinese styles of artistry and storytelling.

But the Chinese market did not awaken to the potential of the animation industry until it saw that animation studios in the United States, Japan and South Korea were virtual gold mines. The showing of Disney's "The Lion King" in China was particularly influential.

With the new millennium arose a consensus that animation in China was poised for a major revival. Government policies are geared towards stimulating the industry, and early last year, SARFT approved 94 per cent of all animation submissions, much higher than the 68 per cent for television serial drama projects.

Cities from Hangzhou to Shenzhen are vying to be the "hub of Chinese animation," and the Ministry of Culture has also become involved, setting up three "manufacturing bases" in Shanghai, Sichuan and Liaoning.

At the end of last year, 210 companies were producing animation, according to a cross section of experts in the field. At least four schools, including CUC, churn out crops of students with specialized talents.

But according to an insider, fewer than 10 television stations are regular buyers, and even then they usually barter with advertising slots rather than pay for the programming. The few who do shell out cash pay 30-200 yuan (US$3.75-$25) per minute, a fraction of the production cost, which runs as high as 10,000 yuan (US$1,250) per minute for 3-D animation.

"It is very difficult to survive in this environment we have the market but no feasible profit," said Wang Liuyi, an executive of Hangzhou-based Sunchime Cartoon Group, one of the most successful firms in the business.

The cartoon channels are said to have decent ratings, but they attract mostly young children, whose only role in purchasing decisions lies in what they're able to persuade their parents to buy. The programmers have attempted to broaden their audience to youths, and even adults, but so far animation still equals children in the sphere of television.

Which style for China?

"Our combined output cannot hold a light to that of a single company in Japan," said Lu Shengzhang, professor at the CUC Animation School.

Lu, the main player in the making of the mascot cartoon film for the upcoming Beijing Olympic Games, said Chinese animation can "excel only by presenting Chinese characteristics.

"If you simply copy the Disney style, you'll always be second-rate Disney."

Like many businesses in a premature stage, people spend a lot of time squabbling about which direction is the right one should we hold on to the traditions of the golden era of Chinese animation, or should we absorb the lively Disney style or the mesmerizing Japanese anime and manga?

John Lant, professor of Temple University in Philadelphia, is an expert on Asian animation. He explained that the success of Japanese animation is "due to their invention of genres." He advised Chinese animators to learn from all countries, but above all to learn from their own environment and culture.

A recent contest of original animation and comics from traditional Chinese sources drew 1,000 submissions from Chinese animators worldwide. But one expert says most of the works lack the real "Chinese spirit" because the animators are young and not steeped in traditional culture.

"Technology cannot take the place of ideas," said Fu Tiezheng, deputy director of the cartoon committee for the China Television Artists' Society.

CUC student Xu Shunxiang and his friends started with Western-style paintings and still have a lot to learn when it comes to China's own tradition of fine arts.

Tong Hui, a sophomore at CUC, started animation as a hobby while still in high school. "I've been doing this longer than some of my teachers," he laughed.

Watching the avalanche of animated shorts at the festival and the accompanying "Aniwow Award," he said he would like to work for new media. "I actually major in web design, but I feel my animation skill comes in handy and will provide me with a big push in my future career."

Like Tong, most of China's animation firms look beyond television for survival.

"If you look at the business model in other countries, you'll notice that the ancillary market for an animated show can be 15-20 times larger than television broadcast rights can command," said Sunchime's Wang Liuyi.

Sunchime has a certifiable hit on its hands with The Blue Cat series. The series has been aired on 1,020 television stations in the past six years and has been sold to 15 overseas markets. The US rights alone brought in US$1 million.

Sunchime used to be an audio-visual producer but, squeezed by counterfeits, turned to animation. Blue Cat has so far developed six series and 2,000 episodes, with a total of 6,600 products covering a dozen business areas. "But AV and books still account for 30 per cent of our revenue," Wang said, "and that means we still have room for expanding the ancillary market."

The future of China's animation may not be on the TV, but on the mobile phones. An 80-minute flash produced by Chengdu-based Sinodoor, called "Girl, How Long Is Your Minute?" debuted in Singapore and Malaysia, where subscribers can download it for a fee. It reaped profits of 700,000 yuan (US$87,500) in one month.

"Animation uses a language that everyone can understand and involves no language barriers," CUC's Lu said. "All it requires is the spontaneous flow of human emotions."

And plenty of leeway for creativity.

(China Daily June 12, 2006)