1. China only allows 34 foreign movies to be shown in theaters per year…

    … which means studios have to compete for precious few slots. 

    Hollywood sees China, with its massive population and a rapidly growing middle class, as an irresistible source of revenue growth, particularly at a time when fewer Americans are going to the movies. China has about 6,000 movie theaters, which is expected to climb to 40,000 by 2040. By 2015, movie revenue is projected to reach $5 billion.

    It’s not hard to imagine why the SEC is investigating whether major Hollywood studios have been bribing Chinese officials.

    A guide to the controversy