The VFX Scene In China

The video above was by the NY Times which reports on the growing animation and VFX facilities in China. One of them is called Xing Xing Digital. As usual, I mention how many misinformed VFX artists cynically argue that no matter what happens, all VFX will go to emerging countries like China because they are willing to do the work for pennies on the dollar.

Hide yo kids, hide yo wife, because all VFX is going to China right? Not exactly.

The president of Xing Xing Digital was interviewed in a recent article and you might be interested in hearing what he has to say.

You’ll find that Chinese vfx facilities suffer from the same bidding wars our industry suffers from:

Many Chinese animation and special effects companies compete with each other to bid for part of a Hollywood movie postproduction job.

“The current domestic market is caught up in a price war,” said Han Yefei, project manager of Xing Xing Digital Corporation.

They are also concerned about… work going to cheaper countries!:

Han also said that rivals from Southeast Asia and India also intensified the competition. “Some Indian rivals offered US filmmakers half the quotation price that we gave without thinking about it carefully,” he added.

The immature business model is an issue:

The price war reflects a lack of mature market order, which applies to many emerging industries.

It’s all about talent and the price of labor is rising:

In addition, the frequent movement of talented people in the industry also causes big problems for many firms.

“It usually costs a company much time and money to train an eligible talent, but he will resign when he gets a better offer from a rival firm,” said Han. “The investment in talent is often followed by disproportionate yield.”

This makes the cost to retain talented people even higher in the industry.

Xing Xing Digital doesn’t want to just be a low price contractor either:

Confronted with fierce competition, Xing Xing has already developed a transformation plan. “We have broadened our horizons, strengthened our professional capabilities and improved production quality,” Wang said.

Expanding cooperation with Hollywood filmmakers is an important part of the plan, but they do not want to take orders just for movie special effects. “It makes us seem very passive to just serve as a low-cost contractor to Western filmmakers,” Han said.

I’m reminded of a talented TD that came from China to work with me on a film. I was perplexed because while he was talented, he was having an extremely tough time adapting to life in the states. He told me his life was excellent in China. He was paid well for a Chinese citizen and it was relatively easy for him to find a wife (which from what I understand is tough to do in China given the high number of males). I begged to ask him: Why did he trade an easy life in China for a hard life in the US?

“‘I’m greedy just like you.”, he said in broken English.

What I’m trying to say is that the situation we in the US VFX market are going through is not unique. Studios continue to do the work here for a reason. People from thousands of miles away come here for a reason.

There are also many experienced VFX artists who travel thousands of miles to work in China. One example is a VFX Supervisor who wrote some interesting posts on the subject on a forum. I encourage you to read it when you have the time. I seem to notice an optimistic post in 2007 going to a much more pessimistic one in 2010.

March 2007:

January 2010:

VFX facilities are commodities, the talent is not.

Soldier On.

8 Responses to The VFX Scene In China

  1. […] This post was mentioned on Twitter by Hideki Suzuki, @ftwo. @ftwo said: The VFX Scene In China: The video above was by the NY Times which reports on the growing animation and VFX indu… […]

  2. n says:

    So far I have been amazed by Chinese and Indian studios’ ability to survive in the absence of personal service contracts — but as you mention, costs are rising. As they take on larger projects, and when they tire of having to chase ever increasing salaries to keep the talent they train, I suspect they too will ask their employees to agree to stay until completion of services.

  3. RobC says:

    A co-worker had this to say …

    “and sing sing mean in korean.. faster and faster”
    o wow.

  4. Ron Anderson says:

    This video reminds me of the automotive industry when the Japanese started to make electronic goods. A lot of people were hesitant about them at first, but over time, the quality of their goods got better and better, eventually toppling the north american market. Globalization and free-trade only made things worse. Look at the past recession with the bankruptcy and the recent bail-outs.

    I’m not sure what we can do about VFX, but somehow, something must be done to protect the workers and the work itself.. Otherwise most of the work will move to the cheapest country possible.

    It’s sad the way things are going.

  5. […] doesn’t scale well, and when it does, the price goes up. I wrote about this on a post about China’s VFX industry: In addition, the frequent movement of talented people in the industry also causes big problems for […]

  6. […] written many posts about the issue. A similar situation occurs in China and I’ve called outsourcing to cheaper developing countries a boogeyman argument. Most of […]

  7. […] I wrote a post many months ago that showed many of the problems VFX facilities face here are the same for Chinese facilities: A race to the bottom business model, rapidly growing labor costs, and outsourcing to cheaper countries. […]

  8. […] in China is nothing new. The anonymous VFX internet celebrity, known as VFX Soldier, covered this topic before. If there is one satisfying bit of information to take from this it is that Chinese studios […]

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