It may be heavily regulated, difficult to break into for foreign firms and censored with an iron fist, but the Chinese media and entertainment industry is perhaps one sector at which Irish companies could be looking. By far the most visible evidence of Ireland in China is Riverdance, but it is a sector that is set to offer huge opportunities in coming years.

Chinese box office revenues reached €1.6 billion at the end of October, up more than 40 per cent, making it the second biggest film market in the world – and the Beijing government is relaxing rules to allow more overseas films in.

Cinema box office in China will become the biggest in the world by 2020, according to a report by Ernst Young, as government efforts to boost the domestic economy translate into robust growth for what the government likes to call the “cultural sector”.

“As the Chinese government continues to relax its restrictions for media and entertainment companies, and digital breaks down the barriers that encumbered traditional distribution and content delivery, the opportunities for market penetration in these sectors in China are growing significantly,” Ernst & Young said its report, Spotlight on China.

Compound annual growth rate for China’s media and entertainment industry between 2010 and 2015 is estimated to be 17 per cent, while spending on entertainment and leisure activities rose 56 per cent from 2010 to 2011. Incomes are rising strongly in China, while strong internet penetration is also driving growth.

While regulatory restrictions historically have limited market access for many companies in the sector, the report believes the government is easing rules and encouraging investment. “Media and entertainment companies still face a range of regulatory hurdles. Nevertheless, as almost every sector of China’s media and entertainment market grows, China provides fertile growth opportunities for such companies – both foreign and domestic.”

At the same time, the distribution infrastructure is becoming digitised, the advertising market is growing and second and third-tier cities offer major opportunities.

Other challenges include intellectual property rights infringement, the highly competitive digital landscape, the complexity of the market and price sensitivity.