News Corp expands China film footprint News Corp has taken a stake in one of China's biggest private film distributors, bolstering its position in a fast-expanding market that has offered both promise and frustration for western media groups in recent years. Rupert Murdoch's US media group said on Monday that it is buying the 19.9 per cent equity stake in Bona Film Group, a Nasdaq-listed film distributor and producer, from Dong Yu, its founder, chairman and chief executive. The move comes as the rapid growth of China's traditionally tightly controlled film business is attracting the attention of Hollywood studios. It is also the latest example of a Chinese film company partnering with a western studio to expand internationally. China has become the biggest source of growth for the global film industry and is one of the few major markets still adding new cinema screens. Box office receipts in China rose 28.6 per cent last year to Rmb13.12bn ($2.1bn), alongside a 40 per cent increase in the number of cinemas to a total of 2,803, according to CMM-I, a Beijing-based media research and consulting firm. Hollywood studios" push into the mainland market has been hampered by quotas limiting the number of foreign films allowed to be shown in China each year, but signs of increasing liberalisation have revived western interest. Xi Jinping, China's vice-president and presumptive next leader, used a visit to California earlier this year to increase the quota of US-made films that could be shown in China each year. In February, DreamWorks Animation agreed to a joint venture with three state-owned media groups, and last year Legendary Entertainment set up a joint venture with Huayi Brothers, one of Bona's main domestic competitors. News Corp, which owns 20th Century Fox, plans to use Bona to strengthen its foothold in the booming Chinese film market, where it distributes some US-made films but has made little headway with local content. Jack Gao, chief executive of News Corp China Investments, said Bona's vertically integrated model "differentiates the company from other film distributors in China." Bona also owns and operates 13 theatres and represents several Chinese artists. "China's film market is growing at a rapid pace, positioning the country to be the second-largest film market following the United States," Mr Gao noted. Neither group disclosed the amount News Corp paid, although Bona's market capitalisation of $363m implies a valuation of a little more than $60m for the stake. News Corp doubled its share buyback programme to $10bn last week, but retains ample spare cash. Bona's revenues more than doubled in the first quarter of this year to $43.7m, and its net profit increased by a third to $3.3m, thanks to box office hits including The Flying Swords of Dragon Gate and A Simple Life. The company already has an agreement with Imax, the large format film exhibition business, to bring The Flying Swords of Dragon Gate to the US in September. It also distributes films to South Korea, south-east Asia, the US and Europe.