How do foreign film quotas operate in China?

There are two foreign film quotas in China—a revenue-sharing quota and a flat-fee quota. Although the revenue-sharing quota has grown over the past twenty years, it is still lower than that of many other countries. Currently the revenue-sharing quota is capped at 25 percent in China. Although the quota itself is lower than that of other markets, the number of films permitted to enter China has grown annually. The flat-fee quota requires that a Chinese distributor pay a lump sum fee for a film, but the producing studio does not receive any of the box office receipts. Large blockbuster films are typically designated revenue-sharing slots whereas smaller low-profile films are given flat-fee slots.