For more on this, let me bring in my collegue Zhao Lingfeng.

Q1. So Lingfeng, the explosive growth of China's box office is the envy of the global film industry. But as we've heard, the merchandise sector is not quite on par. Just how far is it lagging behind Hollywood?

Let me start with the revenue breakdowns of the two markets first. China's box office expanded 50 percent in the first quarter of this year, and the country is on its way to overtake North America as the world's largest movie market as soon as 2017. Currently, 80 percent of China's film-related revenue comes from the box office. But in Canada and the US, that number is 30 percent. The rest is made up of merchandise sales. Taking the recent blockbuster the Force Awakens for example, the movie is estimated to produce over 9 billion US dollars in revenue worldwide in the first year of release. Over half of that is from sales of movie merchandise, doubling its box office revenue. If we move back to China, its second highest-grossing film ever, Monster Hunt, an adventure-fantasy featuring a color cast of monsters. The movie, according to the industry insiders, was full of marketing possibilities, but nothing came of it. What people can find on the market is bad knock-offs. The producer of the movie said more attention will be paid to merchandising for its sequel due to be released in summer 2018.

Q2. Almost every country’s toys are manufactured in China, so basically China isn’t producing any spin-offs from its own movies yet. What shifts are needed to change that?

That’s the same question that Ye Ning, CEO of leading Chinese studio Huayi Brothers Pictures has asked himself. And his answer is, the development of a merchandizing industry must exist in an environment of copyright protection. Once that is in place, then comes the second step for Chinese studios to develop strong franchises to build product lines around. In other words, China’s own superheroes are in need as well. But we do see signs that the Chinese movie industry has begun making efforts to bootstrap its merchandising business. Last year, M-time, a popular movie reviews site, partnered with real estate conglomerate Dalian Wanda Group to launch over 50 brick-and-mortar stores in 10 cities. The move has laid the groundwork for a cross-country online-to-offline merchandise service. Another effort was made by China Film Group, one of the country's dominant film enterprises. It has created a research institute for movie merchandising in collaboration with the prestigious Beijing Film Institute The school has also added a movie merchandising major to its film studies programs. As consumers' purchasing power grow rapidly, Zou Yue, we may well see more movies and toys made in China very soon.