Shanghai's Lin-gang Special Area has emerged as a growing hub for Chinese micro-drama companies expanding overseas, with more than a dozen related firms clustering in the area over the past six months.

The Dishui Lake AI Innovation Hub in Lin-gang Special Area. [Photo/Jiefang Daily]

While overseas markets remain highly competitive, profitability is harder to achieve than expected. WebTVAsia, a leading Asian MCN agency with years of experience on global video platforms, has seen the shift firsthand. "There were a lot of players entering the overseas micro-drama sector one or two years ago, but the number has clearly declined recently," said Li Jinxi, the company's vice president.

As the industry matures, the competitive logic is changing, most notably with rising costs. Bulgaria, once a popular overseas filming location for Chinese productions, has seen expenses surge amid energy shortages and soaring inflation.

At the same time, advances in AI are reshaping production models and cost structures. AI tools are helping reduce costs and improve efficiency, while pushing the industry toward a computing-driven stage.

In recent years, Lin-gang has focused on digital culture and cross-border data, rolling out a support system for One Person Companies (OPCs). The area has built dedicated OPC communities and introduced policies offering inclusive computing power, low-cost workspace, compliance support for cross-border operations, and international network access.

Within less than six months, more than 150 teams engaged in micro-drama production and cross-border services have set up in the area.

"The production location matters less for micro-dramas going global. What matters is whether policy support and the industrial ecosystem fit," Li said.

He noted that Lin-gang's direct international network connections, efficient and stable data transmission, and abundant computing resources make it well-suited for the full chain of AI micro-drama development.