When did investors in China start to develop commercial ties with Hollywood? What are the trends in terms of the size of their deals?
There is a long history of collaboration between China and Hollywood. As early as the 1980s, Hollywood re-entered the Chinese market after China adopted economic reforms and its Open Door Policy. By that time, China had already started to import Hollywood movies and in 2001, China’s first and largest private company, Huayi Brothers, began to collaborate with Columbia Films to shoot one of the first China- Hollywood collaboration films called “Big Shot’s Funeral.” Investment in Hollywood is a more recent phenomenon because China’s economy took off after the turn of the century and Chinese investors became more and more aggressive. Starting in 2012, Chinese companies accelerated their pace of investment. The first well-known deal between Hollywood and China was Beijing Galloping Horse TV and Film Production Company’s purchase of Digital Domain, America’s largest special effects company, along with Mumbai-based Reliance Mediawork. Back then, there were fewer acquisition deals between Hollywood and China, so the deal was widely promoted by the media. Also in 2012, the Dalian Wanda Group purchased AMC. In fact, 2012 can be considered a turning point for Chinese investors in Hollywood when the size of the deals increased by billions of dollars. In 2012, Dalian Wanda’s purchase of AMC was $2.6 billion and Beijing Galloping Horse TV and Film Production’s investment was $30.2 million. In 2016, Dalian Wanda purchased Legendary for $3.5 billion and Carmack Cinemas for $1.2 billion.
China’s increased investment in U.S films and acquisition of Hollywood studios has been seen by some as China’s attempt to compete with the U.S. as a global storyteller. To what extent is Chinese investment in Hollywood a part of a wider policy of enhancing China’s soft power as opposed to private Chinese companies recognizing the increased demand for movies in China and responding to it?
The primary motive behind these deals is private Chinese companies’ recognition of increased demand for movies in China. Chinese companies want to cultivate global talent, enter the global market, and connect with global networks. They also realize that if they just focus on the domestic market, the profit returns will be limited without any international receipts. The collaboration with Hollywood could substantially reduce costs and maximize global returns. So, the primary motive is market based. However, these deals and purchases actually fall in line with the Chinese government’s plan of promoting soft power. As a result, these deals are blessed and encouraged by the Chinese government. The Chinese government wants to use these deals to promote Chinese soft power. For example, Dalian Wanda’s purchase of AMC has enabled Dalian Wanda to become the world’s largest theater chain and occupy almost 10% of the entire global market of theater chains. This gives Dalian Wanda a very big advantage and also makes it possible for Dalian Wanda to distribute Chinese films, which is in accordance with the Chinese government’s plan of promoting soft power.
Do you see any evidence that the close ties between Chinese interests and Hollywood have changed how China is portrayed in American movies? How has the collaboration between Hollywood and Chinese partners changed China’s own movie industry and it narratives about China?
Yes, there is evidence there. American critics are very unhappy with the so-called Chinese propaganda control over movie content. A Washington Times contributor, Richard Berman, used the term “redwashing,” which means studios have to alter their movies to fit Chinese tastes. This means maybe more action films, superhero sequels, and fewer dramas. It also means that some movies have to consider Chinese censorship rules in order not to offend Chinese audiences. Those rules encourage, for example, no depictions of the supernatural, no displays of extreme violence, and no negative portrayal or interpretation of Chinese history or the Communist Party. There was a Hollywood movie made in 2012 called “Red Dawn” that had to be altered in post-production to make the invaders appear North Korean instead of Chinese. According to Berman, “Captain Philips” and the 3D version of “Top Gun” were rejected by Chinese theaters because they portrayed the U.S. military in a very positive light. Movies such as “Mission Impossible 3” and “Skyfall,” also had to cut scenes that made China look bad. I do not see much evidence of the reverse. That is, while Hollywood has to alter its film content to cater to Chinese audiences, it is not powerful enough to change Chinese content. Chinese content is produced by domestic Chinese movie makers and they don’t have to consider Hollywood’s wishes.
How do you explain the commercial success in China of a movie like “Wolf Warrior 2,”a film that is patriotic, but whose protagonist does not follow the typical model of a Chinese film hero? Do you think other studios will try to follow the example set by “Wolf Warrior 2” of bringing in Hollywood consultants?
“Wolf Warrior 2” has a very unique subject matter relating to China's operation in Africa, which has never been touched upon by any domestic film. The film’s contemporary theme, global perspective, and the exotic African landscape provide Chinese audiences with a very fresh and exciting viewing experience. Further, the movie is not a cliché propaganda movie always repeating the old history and glorifying the same figures. The film is also fast paced, action-packed with carefully-choreographed fighting scenes, arresting visual effects, and plot twists and turns, which offer an enjoyable viewing experience for the audience. The protagonist is an individualistic Hollywood-style hero with a strong character. However, unlike Rambo, who fights against the entire unjust system on his own, the wolf warrior fights against terrorists and acquires the support and approval of his home country and his Chinese and African community. His individual acts of heroism have a basis in collectivism that is more appealing to the Chinese audience. Therefore, the movie is a combination of patriotism, nationalism, and individualism with Hollywood-style storytelling. It appeals to Chinese audiences’ desire and aspiration for the rising status of their motherland.
“Wolf Warrior 2” has set a very successful example for other studios, so other studios will probably try to follow suit.
How do Chinese filmmakers and studios go about navigating the dynamic between state censorship and market demands?
In short, Chinese film-makers and studios use self-censorship and self-discipline. They usually avoid touching upon sensitive political topics or serious topics. They just cater to the taste of Chinese audiences by producing a lot of action-packed movies like martial arts movies, or urban love stories featuring “little fresh meat” that are highly entertaining, but do not contain serious or sensitive political themes.
What areas of filmmaking do you think Chinese filmmakers and studios can or are excelling in?
Animation is a particular area where studios could excel in, although Chinese filmmakers have the potential to excel in every area of film production as long as they wisely navigate censorship and market demands. The latest trend is that Chinese filmmakers are trying to re-create Japanese manga and animation because younger generations love Japanese animation. Filmmakers are also trying to emulate and learn from Korean dramas. Some try to do science fiction, but I don’t expect science fiction to be as popular as other genres like action or adventure.
Future ties between China and Hollywood appear to be threatened by political and economic risks. China’s new capital-control policy has recently targeted companies like Wanda that seek to acquire and invest in Hollywood studios. Worries in the U.S. about Chinese capital and its influence in the U.S. may also raise political barriers to more Sino- Hollywood deals. How will these risks affect China and Hollywood’s relationship in the future?
On the one hand, the Chinese government’s latest restriction policy will have a negative impact on the U.S.-China relationship. The typical example is that in 2016 Chinese investment in Hollywood blockbusters reached a peak. However, with the government restriction, Wanda abandoned its $1 billion plan to purchase Dick Clark Productions and pulled financing from the film “Arc of Justice.” Another Chinese film company, Recon Wenyuan, also dropped an acquisition deal with Hollywood’s Millennium Films. Chinese investment in Paramount was also disrupted. According to the statistics, in the first eight months of 2017, no new deals in film business were reached between the U.S. and China and the total outbound investment dropped by 41.8%. The Chinese government’s capital control policy is more detrimental than political barriers in the U.S. Here in the U.S, government policy will be conditioned and limited by various checks and balances. In China, however, the government is more powerful.
On the other hand, the trend of China’s investment and integration with the global media industry does not seem to be ending once and for all. The reason is simply the unstoppable nature of run-away capital and the momentum of the market economy. China’s film industry has been transformed into a market-driven, profit-seeking cultural industry, and China is a rapidly developing market economy. The profit-seeking nature of capital and profit-driven nature of the market economy determine the direction of money flows. State and administrative intervention may govern for a while, but not indefinitely. In addition, China’s cultural industries are the new growth venue for GDP that continues attracting hot money, which constantly requires outlets for investment. Hollywood therefore remains a familiar investment venue. For example, Tang Media just purchased Open Road Film and even though the government has restricted money outflows, money is still going out of the country to finance Hollywood movies. Over the past three decades, Hollywood and China developed strong economic ties and a mutual-dependency. Each side will not prosper without its counterparts. The Hollywood-China collaboration will enter into a new era, moving beyond co-production and mergers and acquisitions to content generation and active participation.
Featured Image by WiNG (Own work) [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons