Thousands of Chinese film and television production houses face closure as the entertainment industry reels and investors run scared from a government crackdown on certain practices, said the Financial Times.

ITjuzi, a Beijing-based research company, said the number of financing and investment deals in the film and television industry had collapsed in the past two years — dropping 43% in 2018 alone — and industry insiders said 2019 was little better.

Movie and television producers have been ordered to cap the budget of performers to 40% of production costs, and pay for leading cast members to 70% of total casting budgets. The China Securities Regulatory Commission has also prohibited listed companies from raising money for investing in film or television dramas if they are not related to their core businesses.

Funding inflows have been hit by curbs on risky lending practices in the financial industry as film-makers are also having to operate in a more restrictive and uncertain creative environment. The result has been a plunge in investment as authorities tighten the screws.