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How Matt Damon is Helping China Take Over the Movie Business

writer: Paul Byrnes source:

Get ready for a lot of movies with the word "dragon" or "tiger" in the title. The Chinese are taking over the movie business, simply by force of numbers.

And here are some of those numbers. China is opening 100 new screens each week. The Chinese box office has grown by an average of 30 per cent every year for the last 10 years. In the first four months of 2014, it grew by 46 per cent. The US has 40,000 screens and its once mighty domestic movie market is shrinking. In April this year, China had 27,000 screens. There are projections that this could grow to 160,000 screens in the next 30 years. China is already the number two movie market in the world, behind US domestic (which includes Canada). Five years ago, China was eighth. It is only a question of time before it becomes number one, but how long will that take?

Qing Xu’s casting as Bruce Willis’ wife in Looper was an attempt to appeal to the Chinese market.

The US market is worth $10 billion a year and falling. China's box office last year was worth $5 billion and rising like a rocket. Chinese admissions grew 236 per cent from 2009 to 2013. Ticket prices rose a whopping 268 per cent in those five years.

"To get rich is glorious," said Chinese revolutionary Deng Xiaoping, although there is some debate that he ever said it. There is no doubt among Chinese theatre owners, though. Most of the new screens are in shopping malls, of which 300 were built in 2013. Many of those were constructed by the Dalian Wanda Group, a real estate giant started by Wang Jianlin in 1988. He is now China's richest man and he likes the movie business. Wanda is already the biggest private property developer in China. With the purchase of AMC Theatres, American's second biggest cinema chain in 2012, Wanda became the world's biggest cinema owner. It also owns Hoyts in Australia. How long, then, before a Chinese conglomerate buys a Hollywood studio, as both Sony and Rupert Murdoch did almost 30 years ago?

Enough with the numbers already. What this means is that every major company in Hollywood is learning to speak Mandarin, as they try to form partnerships with increasingly rich Chinese media companies and the state film bodies. Hollywood and Beijing are putting fingers into each other's pies at every level, but it is producing a lot of what one well-connected Chinese producer calls "cultural indigestion".

Zhang Yimou’s Chinese-American co-production The Great Wall hits cinemas in 2016. Photo: Ahn Young-joon

"There is nothing that can describe the surreal quality of what is happening in China now," says Peggy Chiao, a former critic from Taiwan, now a leading producer on the mainland (Beijing Bicycle). "China is now the miracle of the world. In the last 100 years, we have never seen any area of the world where it has grown so fast … It is so amazing. A lot of the people around you suddenly become very, very rich!"

The cultural indigestion cuts both ways. On one hand, non-Chinese productions try to get a foot in the door by introducing Chinese elements: casting a star like Li Bingbing in Transformers: Age of Extinction, or giving Bruce Willis a Chinese wife in Looper. In some films, the studio releases a different, "more Chinese" version of a big film in China. Iron Man 3 inserted a scene with Chinese doctors discussing surgery on the hero that left Chinese audiences scratching their heads about how it fitted into the plot. It was cut from international versions. Chiao says Chinese audiences find these cosmetic changes funny, but they illustrate the crude way that non-Chinese movie companies try to chase the easy yuan.

Other companies are more sophisticated. Chinese co-productions are becoming common, with Hollywood stars imported to help the Chinese crack non-Chinese markets, something they've never really done. China has never produced a large-scale international hit, something they would dearly love to do. Matt Damon will soon be hitting our screens in The Great Wall, A Chinese-American co-production directed by Zhang Yimou. John Cusack appeared as a Roman general in the Jackie Chan martial arts epic, Dragon Blade, directed by Daniel Lee. Adrien Brody played Tiberius in the same film. It got risible reviews, even as it raked in $120 million in China earlier this year. Whether it will do so well outside China is not yet clear.

The Australian sales company Arclight Films recently announced a joint venture with Huace Group, of China, to produce 12 action and sci-fi films over three years, at a cost of $300 million. The films will have a mix of Australian, Chinese and American actors.

"We are focused on bridging the gap from East to West, utilising a Chinese perspective first, then expanding westward to fill the gap the studios are leaving wide open for competitive and commercial international stories," says Ying Ye, managing director of Easternlight, Arclight's Asian subsidiary.

"The market is expanding at an astounding rate and with that growth we see a maturation in the audience expectations. The days of simple action films or minority Chinese cast involvement in international films are over … Even with the massive growth in the market I believe we have only begun to see the potential of international East/West collaborations. The world is getting smaller and as the industry expands and audiences worldwide become more sophisticated, I believe we will see more western sensitivity to Asian stories and a relaxing of current restrictions on content."

Those last few words might also refer to the biggest issue confronting relations between Hollywood and China. China restricts access to 34 foreign films a year, and they choose which ones. That gives the Chinese film authorities great power and they are not afraid to use it. China has no rating system, but their censors are extremely active in trying to keep western "propaganda" films from corrupting Chinese youth – by far the largest part of the audience. So when a Chinese censor disliked the scene in Skyfall where an assassin walked into a Shanghai building and shot a security guard, they ordered it cut. And it was. In Mission: Impossible III, the Chinese took exception to a shot of underwear hanging from a clothesline in ultra-modern Shanghai. "The censors felt that it did not portray Shanghai in a positive light, so that scene was removed from the movie," T.J. Green, CEO of Apex Entertainment, told National Public Radio in the US.

China has an office for productions wanting to gain access to Chinese markets. In effect, it is a script approval office, giving the government influence over the way China is depicted before a film is made. It's like the Hays Office from the 1930s, only with different rules. Before the Beijing Olympics, they published their new set of "we don't likes". As well as the usual sexual prohibitions against rape and one-night-stands, these included "wronged spirits and violent ghosts, monsters, demons, and other inhuman portrayals, strange and supernatural storytelling for the sole purpose of seeking terror and horror". There goes a lot of current Hollywood productions about superheroes, at least in theory.

When Transformers: Age of Extinction set a new record for a foreign film's earnings in 2014, The Hollywood Reporter carried these startling sentences: "The Paramount movie did much to ensure success in China, shooting scenes in Beijing, Hong Kong and elsewhere and lining up a cast of Chinese stars, including Li Bingbing. It included propaganda messages about the Chinese government and even featured stars drinking Chinese Red Bull in the middle of the desert in America."

Access to the Chinese market offers Hollywood a powerful incentive to get with the team in Beijing, and they are more than willing to please, but they would like a lot more access if they are going to sell their souls to the politburo.

The current rules, ratified in an agreement between the US and China in 2012, gave Hollywood an extra 14 films a year – but they have to be in 3D or IMAX formats. More importantly, the Chinese also gave ground on the distribution fee they will allow to be returned to the US. It used to be 13 per cent. When then-Vice President Xi Jinping visited Los Angeles in 2012, the US Vice-President Joe Biden went to bat for Hollywood, seeking an increased percentage. Xi agreed, after some strong resistance, to go to 25 per cent on the distribution fee, which will deliver millions to Hollywood's coffers. If he ever wants front row seats at the Lakers, he can count on them.

That agreement lasts until 2017, when it must be renegotiated under the rules of the World Trade Organisation. The pressure on China not just to lift the quota but abolish it entirely will be immense. The Chinese are never a pushover in matters involving propaganda. They retain too much power by restricting access. Giving it away would be like telling their own people they made a mistake; that Hollywood movies are not so bad for your health and well-being after all. The US can expect to face a new Great Wall when it comes to the new quota policy.