China’s television and film industry is booming. Figures released in August show that the Chinese television market has officially overtaken the UK to become the second largest in the world. And, earlier this year, China’s box office overtook the US for the first time.

If you are serious about the film and television industry you need to be serious about China. It is one of the reasons that I moved to Beijing almost three years ago.

In the past few months, however, the industry has been rocked by the events surrounding one of its biggest stars, Fan Bingbing. The story holds important lessons for media executives across the world who want to work in China.

Fan is a household name in China. She is one of the few domestic actors to have achieved crossover appeal in Hollywood, appearing in X-Men: Days of Future Past.

In July, she went “missing”. In October, she reappeared and admitted to tax evasion. She was ordered by the authorities to pay $127m in taxes and penalties.

Like most news in China, the simple story I have outlined is surrounded by conspiracy theories. These range from illicit affairs to political meddling.

Irrespective of whether you believe in the official version of events or want to dabble in conspiracies, the story holds three important lessons for anyone wanting to do business in China:

1 The Chinese public is increasingly concerned about inequality, and loves stories of the super-rich getting their comeuppance.

For a British person, when you hear about Fan’s story, it is helpful to think about it in terms of the UK Uncut tax campaign. In Britain, big companies have come under fire for not paying their taxes.

In China, it has been actors who have become the face of inequality and tax “cheating”.

This an important insight into what Chinese audiences want to see. Last year, the breakout TV hit was In the Name of the People, a drama dealing with anti-corruption detectives tracking down the rich and powerful. The first episode was viewed 350 million times.

2 Industry insiders believe that Fan proves that Chinese stars get paid “too much” relative to other key roles in TV and film. In China, it is not unusual for the vast majority of a production’s budget to be spent on a single star’s salary.

The government has recently tried to rectify this: salaries of on-screen performers are now capped at 40% of a production’s total costs.

The stars’ high pay has caused a lack of investment in other parts of the industry, notably screenwriters. A few years ago, the vice-president of Alibaba Pictures even suggested doing away with screenwriters altogether.

He proposed that scripts be written through “crowdsourcing” ideas on internet forums. While this idea did not take off, it showed the level of respect in which screenwriters are held.

There is a growing acceptance of the low quality of Chinese screenplays but, paradoxically, there is now what the Hollywood Reporter has described as a “feeding frenzy” for good scripts. This is a golden opportunity for foreign scriptwriters.

3 The final lesson from Fan’s case is perhaps the most important – when you work in a foreign country you need to obey the law. I know that sounds obvious but it is vital to remember.

The online publication China Film Insider recently carried a wonderful piece, written by Dan Harris, a leading international media lawyer, about Fan Bingbing. He noted how, when it comes to Asia, foreign companies often play fast and loose with the law and taxes.

There is no denying that the legal structures in many Asian jurisdictions are “challenging”, but the need for good legal advice throughout any production is essential.

It is difficult to know what the long-term consequences will be for Fan’s career. Her most recent movie, Air Strike, co-starring Bruce Willis, was released in the US but cancelled in China.

Long term, there is almost no doubt that the industry will keep on growing in China, and international media execs will need to learn how to work in it successfully.

Marcus Ryder is chief international editor of CCTV News Digital, part of CGTN.