China: When Zhu Zhili was searching for a place to establish an artificial intelligence film studio in China two years ago, Shenzhen in the south was the obvious choice because of its extensive technology ecosystem.
But this year, Zhu said he has received calls from officials in cities and industrial parks across the country, all encouraging him to move his AI film business to their areas.
China's drive to develop artificial intelligence is increasingly extending into filmmaking, with local governments providing support to AI creators and startups. The incentives include subsidised office space, housing assistance and access to computing resources, reflecting a wider industrial-policy approach that has also been used to develop industries such as electric vehicles (EVs), solar panels and robotics.
The support has helped fuel a rapidly developing industry of AI filmmakers, studios and streaming platforms in China, all seeking an early advantage in production techniques and distribution.
Zhu, who also heads the Artificial Intelligence Generated Content (AIGC) department at China Wit Media, said the infrastructure supporting the country's AI film industry is currently in very good shape. AI filmmakers, he said, are benefiting from "discounted rent, living allowances and computing support."
He plans to remain in Shenzhen, where he operates his personal studio from a shared workspace supported by the city government and Hong Kong Polytechnic University.
China's strong push to incorporate AI into filmmaking has been welcomed by filmmakers such as Zhu. But the industry is also facing risks that have emerged in other sectors that have received extensive state support.
As companies increase production of goods ranging from cars to consumer products, domestic demand remains constrained. This has contributed to falling prices and what many see as a race to the bottom.
According to state broadcaster CCTV, the cost of producing AI short dramas fell sharply in the first half of 2026, dropping from 5,000 yuan ($745) per minute to just a few hundred yuan.
"A normal wedding shoot might cost 60,000 yuan ($8,958) before I can produce it," said Pan Xiaojun, a postgraduate film-directing student based in Hainan, southern China. "But with AI tools, even in a very unconventional space, I might only spend 2,000 to 3,000 yuan ($299 to $448) to bring it to life and make it happen."
Pan later retracted the 2,000-3,000 yuan figure when contacted again, saying the actual cost was "just 1,400 yuan ($209)."
Like Zhu, Pan said subsidies and rent waivers provided by a local government in Hainan had helped him reduce his computing costs further.
Chinese consumers have been receptive to AI-generated content, but concerns over plagiarism and a lack of originality have also emerged.
Wen, a 22-year-old fan of AI content, said some creators were using other people's original characters and dance clips in AI-generated material without attribution.
"I feel that is a very unacceptable behaviour," she said.
China requires AIGC to be explicitly labelled, but it has yet to introduce clear copyright rules governing such content.
Despite these concerns, China's AI filmmaking industry continues to expand.