2025.02.23

A little boy with a topknot and natural dark circles under his eyes has recently taken the world by storm. His name is Nezha, a character from Chinese mythology. The film *Nezha: The Devil Boy's Disruption of the Sea* (referred to as *Nezha*), based on his story, has already grossed over a billion yuan at the box office, breaking into the top ten highest-grossing films in global cinema history and topping the global animated film box office chart. The film's production company, Enlight Media (.SZ), has seen its stock price soar, with its market value once approaching billions. Investors have reaped huge profits, and this success has given hope to hundreds of thousands of Chinese animation professionals. The long-standing challenges of talent cultivation and financing difficulties that have hindered the growth and strengthening of the animation industry may finally be resolved, paving the way for the industry to carve out a new frontier.

Financing difficulties for the animation industry

Public information reveals that the film "Ne Zha" comprises numerous special effects shots and over ten thousand special effects elements, taking years of meticulous production by hundreds of people and multiple companies. A blockbuster animated movie has driven the development of more than a hundred companies behind the scenes, achieving mutual success, yet the underlying issues are thought-provoking. Mr. Cai, a seasoned professional in the animation industry, told First Financial that from "Ne Zha" to "Ne Zha," the production has largely followed a small-scale outsourcing model, involving multiple production companies this time. The choice of outsourcing is primarily due to budget constraints. A high-quality animated film may require an investment of hundreds of millions of yuan, which many productions cannot afford. In contrast, major Hollywood studios like Disney, Warner Bros., and Universal Pictures, with their substantial financial resources, handle production in-house and rarely outsource on a large scale.

Mr. Cai told Yicai that different films require different operational models, and any approach that yields good results is acceptable. However, compared to the standardized production models of large studios, extensive outsourcing demands strong control over consistency, progress, and quality—otherwise, the visual quality can become uneven. The domestic animation industry faces two practical challenges: first, there is little capital willing to invest in animation; second, there is even less capital willing to invest while also understanding the operational dynamics of the industry. For example, take the animated film *Big Fish & Begonia*, which was released in 2016. Years earlier, the production team launched a crowdfunding campaign online. Over several months, more than 3,000 people contributed a total of 1.58 million yuan, with individual donations ranging from as little as 10 yuan to as much as 500,000 yuan—setting a new record for crowdfunding in China's animation industry at the time. This caught the attention of Wang Changtian, chairman of Enlight Media. After Enlight Media injected funds, the production budget for *Big Fish & Begonia* significantly increased, and the film was ultimately completed with a total cost of approximately 30 million yuan.

However, not all animated films are as fortunate as "Big Fish & Begonia." Many professionals in the industry are still waiting for their opportunities. Liang Yi, Chairman of Chengdu Yunhai Tianju Technology Co., Ltd., and his team participated in the production of "Ne Zha." "At present, China's animated film industry chain is not yet fully developed, and many animated films operate at a loss," Liang Yi noted. The investment and financing environment for animated films is not very optimistic—while the number of investors is increasing, truly professional investors are still very few. After the massive success of "Ne Zha," many people wanted to invest in animated films. However, making such films isn't just about having money; it requires professional expertise. Film investment must consider promotional channels, production resources—it's a complete industrial chain.

Tang Li is the chief producer of Lead Element Animation. He graduated from the Animation Production program at the Film and Television Animation School of Chongqing Technology and Business University and currently resides in Chongqing. Tang Li has led his team in the production of numerous popular domestic animated works, including *Chinese Mystery Man*, *The Outcast*, *To Be Hero*, *My Unparalleled Power*, *The King’s Man*, *Spiritpact*, and *Tomb Guarder*. Tang Li's company secured the first round of ten-thousand-yuan financing from Caesar Culture, making it one of the first animation studios to achieve a valuation exceeding 100 million yuan. With this funding, the company transitioned from an animation studio to a full-fledged animation firm. It standardized employee benefits such as social insurance and housing funds, acquired a formal workspace by moving into an office building, and established dedicated roles for finance and administration, along with departmental divisions. The company also began planning its development strategy for the next five to ten years.

Tang Li told First Finance that some domestic investors look down on creators, who are the weaker party in the equation. Li Zhan, founding partner of Fan Ying Consulting and a Ph.D. in Communication from Ohio State University, analyzed that the business environment faced by Chinese films is quite different from that of Hollywood: "Hollywood operates under a major studio system, backed by mechanisms like Wall Street capital, which can support an animation company in developing and managing multiple projects globally from a resource allocation perspective. If two out of ten projects succeed, all costs are recouped. Currently, China's animation industry lacks a more integrated and intensive industry mechanism to encourage and support a virtuous cycle of creation and diversified innovation. Good projects and works shouldn’t appear just one or two every three to five years but should emerge on a larger scale. Right now, it’s more of a solo effort. This is a challenge for the entire industry—how to achieve a flourishing scene where a hundred flowers bloom, rather than just one standout."

Large talent gap

After securing funding, Tang Li's company offered benefits that were among the best in the industry. Fresh graduates received a fixed salary of 5,000 yuan plus bonuses, while some companies at the lower end of the industry chain paid only 1,000 to 2,000 yuan to cut costs. One practitioner commented on the pay and benefits of animators: "Animators are almost like migrant workers or factory laborers." "When I worked as a key animator, I felt powerless—I couldn’t create a major project alone. Many investors look down on creators. While *Ne Zha* is said to have involved a thousand animators, most were actually outsourced from scattered companies, not to mention the subcontractors further down the chain. It’s hard to find animators willing to revise a single shot ten times. They need to make endless adjustments, and it’s just not worth it for them, so of course, it’s tough to find people," Tang Li told *Yicai*.

Tang Li is entirely self-taught. He revealed that when he couldn’t find suitable newcomers, he took matters into his own hands by conducting internal training—recruiting college students for free, training them at no cost, and then having them stay to work at the company. "Right now, our company not only undertakes animation production but is also expanding into animation training services. This is both to meet our own talent development needs and to address the industry-wide shortage of skilled professionals. We’ve extended our operations to include an outsourcing platform. The number of full-time employees within the company has decreased, with more work being flexibly outsourced. Currently, the outsourcing platform has a workforce of about three to four hundred people." In the past, many animators didn’t even make it onto the production credits list. "If I outsourced work to you, your name wouldn’t be counted. The turnover rate among animation talent is quite high because the work is exhausting—daily grind with relatively low pay. So why do we conduct training? Previously, the career lifespan of an animator was around [age not specified], but now it has extended to [age not specified]. However, the earnings and working conditions still can’t support the lifestyle they aspire to after that age. The reason we’re doing so much training is precisely because animators tend to leave," Tang Li told *Yicai*.

After the massive success of *Ne Zha*, the animation industry has garnered widespread attention from all sectors of society. Tang Li hopes that, with this increased focus, the next step will be to ensure that animators' social insurance and housing fund contributions are fully paid, as very few animation production companies in China currently comply with this requirement. Many industry insiders have noted that due to low earnings and demanding work conditions, a large number of talented animators have moved to relatively higher-paying game companies, further exacerbating the shortage of animation talent. Liang Yi also pointed out that China's animation industry still faces a talent shortage. The current training system for animation professionals—including university education and vocational training—does not fully align with the actual hiring needs of animation studios.

Can "Ne Zha" replicate?

(aiime consulting) Data shows that in recent years, domestic animation has achieved breakthrough growth, with the total value of China's animation industry increasing from billions of yuan in one year to billions of yuan in another. The market size of China's pan-anime peripheral products is expected to reach billions of yuan in one year and is projected to hit billions of yuan in another. The Chinese animation market is currently experiencing explosive growth, and domestic animation is also benefiting from this positive trend. Through interviews, Yicai reporters learned that China's animation industry can generally be divided into three main segments based on the primary participation of companies in the industrial chain: content production, distribution and screening, and derivative monetization. After decades of development and learning, China has begun to see the emergence of some high-quality domestic animations in recent years.

Sun Jiashan, an associate researcher at the Central Academy of Culture and Tourism Management, believes that from "Monkey King: Hero is Back" and "Ne Zha" to "Chang An" and the recent "Ne Zha," after years of dormancy, China's animation industry has finally begun to find a development path that not only adapts to the market economy but also consistently produces well-received and commercially successful cultural products through modern film and television cultural industry methods. The representative works all focus on the practice of national styles rooted in China's excellent traditional culture. The commercial success of the Ne Zha film series has shown animation practitioners the diversity of pathways to success. Liang Yi remarks: "When Jiaozi was creating the Ne Zha series, he didn’t replicate any existing films but instead fully leveraged his own expertise. Jiaozi succeeded because of innovation. So, never attempt to copy—every team, story, and creative idea has its own unique characteristics. The key is to play to your strengths. In the future, modern adaptations of traditional stories may be more likely to stand out in the animation field. This is because traditional stories already have a certain audience base, yet their specific content differs from conventional perceptions."

Regarding the future of China's animation industry, Liang Yi stated that from the perspective of genre films, animated movies carry the least investment risk since they are not subject to issues like actors' scandals. Moreover, the annual production volume of Chinese animated films is very high. However, there are only a few top-tier productions each year, numbering just two or three. Thus, there remains a gap, with many themes yet to be explored—only a small fraction of domestic subjects have been developed so far. "Ne Zha" is currently being screened overseas, and more outstanding Chinese animated works are making their way to the international market. The Chinese animation industry can also learn from some of Hollywood's successful experiences.

Recently, a former animation professional now settled in Auckland watched "Ne Zha" at a branch of a major cinema chain. In his view, "Ne Zha" represents the highest level of animation production in China. "Tickets were hard to come by. I bought the last available seats for the evening show around noon, and at that time, there were only three tickets left in the entire theater. I ended up with a seat in the back row near the corner," he told First Financial. He mentioned that "Ne Zha" is extremely popular among overseas Chinese communities. During the screening, he also noticed many non-Chinese audience members, who gave very high praise to the film.

环游记》这样具有全球影响力的作品,中国动画电影需要在保持本土文化特色的同时,更加注重全球观众的接受度和共鸣点。 In Li Zhan's view, animated films have a greater advantage over live-action works when it comes to going global. Live-action films have a higher barrier to understanding, whereas the imagination and emotional resonance of animated films can transcend cultural barriers. By establishing a clear worldview, animated films make it easier for audiences to comprehend. However, a story set in a Chinese context may struggle to ensure that every aspect of its design possesses cultural universality. Disney's *Coco*, released in 2017 and based on Mexican culture, achieved global resonance precisely because it was designed for a worldwide audience while integrating Mexican culture under a unified vision. Its global box office reached $800 million, with less than a third coming from North America. If China wants to create animated films with global appeal like *Coco*, they must maintain their local cultural identity while paying more attention to the acceptance and emotional connection of international audiences.

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Author: Emma

An experienced news writer, focusing on in-depth reporting and analysis in the fields of economics, military, technology, and warfare. With over 20 years of rich experience in news reporting and editing, he has set foot in various global hotspots and witnessed many major events firsthand. His works have been widely acclaimed and have won numerous awards.

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