China's central government is urging local authorities to support the development of a cultural industry which does not pollute the environment and relies on innovation. Promoting a cultural industry can also address the local governments' enthusiasm for boosting growth through investment and generating revenue by selling land, and let them focus more on the development of service sectors.

The Wuxi government in Jiangsu province turned a deserted iron and steel factory into one of the world's largest film studios, dubbed Huallywood, two years ago.

Since then, the booming Chinese film industry and increasing outsourcing of digital film production from foreign filmmakers have transformed Huallywood into a fast-growing film production center in China.

When the Wuxi government claimed it would invest 10 billion yuan ($1.61 billion) to build Huallywood, 80 percent of film studios built by local governments was losing money. "You can understand the pressure we were under back then. But we are different," said Yan Heping, deputy director of Binhu district commerce bureau of Wuxi, the main sponsor of the project.

The studio of Huallywood in Wuxi, Jiangsu province, was previously a workshop of a steel factory. Feng Yongbin / China Daily