Lights, Camera, Access: Hollywood’s Ongoing Challenge in Entering China’s Film Market

By Dominic Chiu —

Cinema lobby in Shenzen, China. Source: DCMaster’s flickr photostream, used under a creative commons license.

China is one of the largest and fastest-growing film industries in the world. At the same time, it maintains extensive quantitative and content restrictions on the screening of foreign films. In 2016 China raised the number of imported U.S. films from 34 to 38. It is also planning on expanding the film import quota this year as agreed to in an 2012 MOU with the United States, which follows a WTO dispute in 2009 that called for China to grant full market access to foreign films.

Access to China’s film market is a big deal for foreign film industries, including Hollywood. China’s movie market is projected to overtake the United States’ to be the world’s largest in dollar value by 2018. The Chinese box office revenue grew nearly 50 percent in 2015, grossing $6.8 billion, while the U.S. box office grew only 8 percent to $11.1 billion.

To be sure, this makes the recent and impending quota increases a positive sign for Hollywood, but full liberalization is still a long way off. China is likely to maintain extensive additional restrictions that allow Beijing to continue to exercise control over the quality and content of films that enter its home market. Not only do existing regulations provide Chinese authorities with significant latitude to restrict the entry of foreign films, but the stated priorities of the current leadership suggest these tools will continue to see frequent use.

A major priority for China is to maintain social control and domestic stability. One avenue by which this is achieved is through regulating the arts. In 2014, President Xi Jinping attended an arts symposium in Beijing with propaganda chief Liu Yunshan where he criticized Chinese artists for upholding Western artistic standards, stressing they must grasp “the appropriate relationship between political positions and creative freedom.” More recently in January this year, the head of the State Administration of Press, Publication, Radio, Film and Television’s (SAPPRFT), the agency responsible for implementing China’s censorship regime, also called for the department to strengthen censorship efforts in accordance to Xi’s directives.

Another priority is to develop China’s domestic industries. In the case of the film industry, the Chinese leadership has stated that domestic film companies should account for at least 60 percent of the country’s box office revenue. The government also wants Chinese films to succeed overseas to strengthen the country’s soft power, replicating achievements made by Chinese classics like Crouching Tiger Hidden Dragon, House of Flying Daggers, and Hero. However, it is hard to reconcile this goal with the aforementioned goal of regulating domestic movie production. Attempts to include the Communist Party’s socialist values in films have resulted in box office flops and audience backlashes, in both domestic and international markets.

Exporting successful Chinese films is not the only way for China to increase soft power. According to Robert Daly, China Director of the Woodrow Wilson Center, China also tries to improve its national standing by preventing foreign films portraying the country in a negative light from being greenlighted for screening. China attempts to achieve that by vetting foreign films using censorship criteria laid out in the 2016 Film Industry Promotion Law. SAPPRFT is authorized to censor or restrict a film if it “endangers the unity of the nation, injures national pride, demeans traditional culture, enflames ethnic violence, or disrupts social order and stability”, among other qualitative criteria.

Examples include the removal of 10 minutes of Chow Yun-fat’s performance in Pirates of the Caribbean: At World’s End for “vilifying and defacing the Chinese”, a scene in Skyfall in which a Shanghai security guard was killed by a French hitman, and the cutting of 14 minutes of Logan for excessive violence. However, the incentive to self-censor and the opacity of the process means that the frequency and extent of changes made as a result of China’s market restrictions is difficult to estimate.

There is certainly evidence that, while Hollywood may complain about Chinese censorship, it is also complying. For example, C. Robert Cargill, a screenwriter of Marvel’s Doctor Strange, said in an interview that a character’s ethnicity was switched from Tibetan to Celtic in order to avoid stirring up political sensitivities in China about the autonomous region. The producers of the 2012 Red Dawn remake also spent $1 million to digitally alter the original Chinese antagonists into North Koreans for similar reasons.

All of this suggests that full liberalization of the Chinese film market remains a distant prospect — and, unfortunately for Hollywood, there appears to be little that the U.S. government can do to fix this. For China’s leadership in the Xi Jinping era, promoting the Party’s supremacy in ideology is a major priority and a red line in any economic negotiation. Although some members of Congress have expressed concern over Chinese investment in the U.S. film market, it is unlikely that this or even stepped up enforcement actions would give the Trump administration sufficient leverage to push for change.

Mr. Dominic Chiu is a researcher with the Simon Chair in Political Economy at CSIS.

 

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