China fuels rush to turn AI video into an industry

China is fueling a rush to turn AI video into a major industry. Zhu Zhili, an AI filmmaker, has received calls from officials in various cities, urging them to establish AI film businesses in those areas. Local governments have responded by offering subsidies and tech cluster incentives to attract AI filmmakers and startups. This approach mirrors China's previous industrial policy strategies, aiming to build AI-driven industries similar to electric vehicles, solar panels, and robotics.

The result is an emerging industry of AI filmmakers, studios, and streaming platforms, eager to gain an early lead in production techniques and distribution. Zhu, who heads the AIGC department at China Wit Media in Shenzhen, attributes China's success to a supportive environment, including cheap rent, living allowances, and computing support.

However, the industry faces risks similar to other state-supported sectors, with concerns about overcapacity and potential price wars. Despite this, filmmakers are attracted to AI due to its low production costs. In 2026's first half, AI short dramas cost just a few hundred yuan per minute, compared to 60,000 yuan for a normal wedding scene shot conventionally.

Cities like Shanghai and Beijing have introduced incentives to accelerate AI-powered micro-drama production and support overseas distribution. Shenzhen offers technical support for video production and subsidised rent, while the National Film Administration recently granted a public-screening licence to a 90-minute AI film, marking it as the first AI film to receive regulatory approval for theatrical release in China.

Despite the industry's growth, there have been concerns over copyright infringement and job losses for voice actors, as well as criticism over plagiarism and a lack of originality.