What Does Hollywood Lose When It Works With China?

What Does Hollywood Lose When It Works With China?

What Does Hollywood Lose When It Works With China?

They may fight over censorship and trade, but the biggest players all want the same thing: movies that make as much money as possible.


Last year, despite the escalating rhetoric of Trump’s trade war with China, Avengers: Endgame hit $614 million at the Chinese box office and became the highest-grossing US production in that country’s theatrical history.

The all-time windfall couldn’t quite counter Hollywood’s well-publicized anxiety over its future in the Chinese market, a significant source of revenue for big-budget blockbusters. Prior to the recent downturn caused by the coronavirus, it was predicted that China would surpass the United States this year to become the biggest film market in the world. As US studios try to solicit Chinese audiences—and China tries to build the global cachet of its own film industry—questions of political compromise abound.

In late January, after an 18-month standoff, Trump signed “phase one” of a trade deal with China, lowering some tariffs and scrapping some entirely. Protecting the film industry was a lower priority during the trade war: US film revenue in China, though enormous, pales in comparison to the hundreds of billions brought in by trade in agriculture and tech. The media and entertainment industries were also mostly untouched by the debilitating tariffs imposed on other production sectors. But Hollywood does rely on China for a huge chunk of its foreign revenue, and the tension had a noticeable chilling effect on US film production and distribution in that country. “I don’t want to use the words ‘total freeze,’ but it’s real,” one US producer told The Washington Post last summer. “They’re not saying it officially, but the industry is operating as if it’s close to a total shutdown.”

The companies and organizations that rule the US and China media industries make up the infrastructure of a transnational visual culture, one that makes visible the vacillations of global capital. Last year, their joint box-office revenue hit nearly $21 billion—meaning that the United States and China alone generated about half of the box-office revenue for the entire world. The Chinese market alone contributed more than a quarter of Avengers: Endgame’s $2.79 billion take. Viewers might also be surprised to hear which US films are either official Chinese coproductions or relied on Chinese financing, from 2018’s Green Book and The Meg to last year’s The Farewell.

The images and narratives that circulate between the United States and China vastly inform how we understand power, and structure our sense of what is possible in the world. Perhaps because of this, it’s become almost perfunctory to criticize Chinese censorship and the companies that show deference in exchange for audience numbers. Western critics have also pointed out the financial downside of depending on a state with such labyrinthine and unreliable censorship: There’s no guarantee a film will make it through the regulatory system intact—or be released in China at all.

The clash of nationalist ideologies invoked in critiques of the Chinese film system also masks another problem. When a domestic industry starts to depend on foreign audiences, building a “universally” appealing monoculture becomes the surest way to guarantee returns.

The China-Hollywood relationship is not new: Hollywood blockbusters have played a major role in Chinese economic policy for nearly three decades. Starting in the mid-1980s, national box office sales in China had been declining by 5 million tickets every year, and only 15 percent of the Chinese-made films shown in Beijing each year managed to turn a profit. As Wendy Su observes in her 2016 book China’s Encounter with Global Hollywood, the state had withdrawn most of its production subsidies, and domestic filmmaking faltered. Even the foreign films that made it to domestic screens were hardly cause for excitement: From the 1950s to the ’80s, the state had been paying a flat fee of around $20,000 to rights holders in exchange for the ability to screen outdated films such as Spartacus and Love Story in Chinese movie theaters.

In 1992, the Chinese Communist Party announced its new pursuit of a “socialist market economy,” which soon extended to the film industry. The China Film Distribution and Exhibition Company—then the sole state-backed distribution body—came to a possible solution: By importing contemporary foreign films that were already box-office hits abroad, distributors could sate the nation’s demand for entertainment. Then, through revenue-sharing agreements with American studios, they could recoup funds to invest back into domestic filmmaking.

The first foreign blockbuster to traverse those long-shuttered gates was Warner Bros.’ Harrison Ford–helmed thriller The Fugitive, which found its way into theaters in November 1994. After a clandestine back-and-forth that almost saw its release halted entirely, The Fugitive went on to make over 25 million RMB ($3.15 million) in China, an auspicious-enough opening that other Hollywood fare—Forrest Gump, The Lion King—soon followed. There was a brief burst of domestic filmmaking in the first few years post-Fugitive, but Chinese output continued to struggle; theaters came to rely heavily on Hollywood blockbusters and commercial fare from Hong Kong and Taiwan. By the end of the ’90s, US productions were bringing in around 70 percent of China’s box-office returns.

China started by allowing 10 foreign films to be screened there annually, and the import quota has gradually increased over time: Recently, it’s allowed between 38 and 40 foreign films a year. In the early years of Hollywood imports, Chinese policy-makers and distribution agencies framed the function of foreign blockbusters purely in terms of economic benefit to China. But after years of prioritizing economic policy, China eventually began to pursue its own global “soft power”—and film financing became an easy way to do it.

Over the past decade, China has been cofinancing foreign films—often with US companies—through official channels that designate films as “local” products, or through different channels of lower-scale collaboration, such as giving filmmakers permission to shoot in Chinese locations or providing local production assistance.

For “official” coproductions, PRC regulators are involved in a strict and obscure approval process from preproduction to distribution. If the final cut is cleared, the film is treated as a local Chinese product, circumventing import quotas and granted more generous revenue-sharing agreements. China-Hollywood “faux-productions”—a term coined by scholar Aynne Kokas—are films that can’t quite meet regulator requirements, but still receive some degree of cofinancing from Chinese organizations.

Some of the earliest projects of this kind were Looper (2012) and Iron Man 3 (2013), both of which started as official coproductions but failed regulator checks along the way and ended up as faux-productions. Some of the more ostentatious collaborative fare of recent years, such as The Great Wall (2017) and The Meg, did make it past the regulators and received the “official” designation. Lulu Wang’s The Farewell—a smaller-budget, independent film that won awards in Hollywood last month—also ended up with official Chinese coproduction status, allowing it to sidestep China’s strict film import quotas upon its Chinese theatrical release.

Faux-productions such as Iron Man 3 may bear obvious marks of PRC involvement—such as scenes set in Shanghai, and a conspicuous absence of any Chinese villains—while some, such as Furious 7 (2015), display no visible Chinese cultural references, despite the substantial support of a central Chinese distributor. Last year’s Best Picture Oscar winner Green Book was co-financed by Alibaba, one of the biggest companies in China. Skyscraper, a 2018 vehicle for Chinese audience favorite The Rock, appeared to be a US enterprise on paper, coproduced by Universal Pictures and Legendary Entertainment, headquartered in California. But the film received a rare placement in the middle of China’s summer blackout months, when foreign films are usually barred—likely because Legendary is owned by Wanda Group, a Chinese media conglomerate. (Legendary is behind the upcoming Dune remake, too.)

Besides its capacity to boost foreign film profits, China’s production of its own blockbusters has proven increasingly lucrative too. Last year, domestic productions accounted for eight of the nation’s ten highest-grossing films.

American director Oliver Stone has failed three times at completing coproductions with China. During a panel at the 2014 Beijing International Film Festival, he argued that they simply “don’t work” because of censorship requirements: “You are talking about protecting your people from their own history.… I tried to make a movie about Mao Zedong. But I was told, ‘You will never make a movie about the Cultural Revolution.’” PRC regulators do not publicize their reasons for rejecting coproductions, but it’s not difficult to guess the bottom line: They’re tasked with maintaining a streamlined, nationalist self-image, one that is at odds with China’s violent, fragmented reality.

But what does it really mean when pundits frame China’s film industry as a “threat” to Hollywood, as many have been quick to do? The most obvious target is the Chinese government’s interminable content-policing. US and Chinese critics alike have called Chinese censorship ideologically objectionable and hostile to artistic expression: At a high-level Chinese Communist Party meeting in 2014, the acclaimed Chinese director Feng Xiaogang said of Chinese film censors, “Is their patriotism, political judgment, and artistic taste better than ours, the directors?”

The criticism of China’s censorship from the West, however, can sometimes seem to equate literal suppression with the separate problem of content adjustment—that is, pandering.

In capitulating to the Chinese box office, Hollywood blockbusters have dispersed Chinese-branded products and recognizable location shots that pique surface-level interest without real, considered narrative integration. To Western critics, pandering to Chinese audiences is an ethical failure, by which Hollywood kowtows to the demands of a repressive state for profit. (As if the US film industry never sacrificed expressive freedom for big money.) Not only does this account of pandering conflate the values of the state with those of its people, it also suggests that this new market might not be worth breaking into—that Chinese audiences should come around to the terms set by Western values. If pandering is another word for “trying to solicit a new audience,” then its framing as a political offense, in this context, seems like Sinophobia by another name.

It also ignores the fact that Chinese viewers don’t like clumsy pandering either. Chinese audiences rejected the alternate versions of Iron Man 3 and Looper that were made specifically for Chinese distribution, with bizarre, incongruous extra scenes spliced in that featured famous Chinese actors or box-ticking location shots. Not only did the Chinese theatrical version of Iron Man 3 include blatant product placement for Gu Li Duo, a popular milk beverage, it also featured a scene in which Chinese doctors inexplicably perform critical surgery on an acupuncture-needle-studded Tony Stark. As one Chinese viewer said of the scene, “When the Chinese show up in the movie, it’s like suddenly changing the channel.” Even films with clear narrative collaboration between Chinese and US film studios can risk alienating viewers. In 2017, Chinese director Zhang Yimou’s Matt Damon–led film The Great Wall—the most expensive official US-China coproduction at the time—underperformed globally. Critics in both countries jumped on its dubious premise of white mercenaries saving Song-dynasty China, calling it out as whitewashing and a flimsy attempt at universal appeal.

All of this speaks to the broader problem of audience solicitation at this scale: If you’re making a blockbuster, your primary motivation is profit. It’s the instances of “successful” pandering that reveal the stakes of increased US-China entertainment collaborations. Take adrenaline-pumped shark movie The Meg, for instance: It’s the most lucrative official coproduction to date, with a worldwide gross of $530 million. The film’s coproducer Ben Erwei Ji ascribed part of its success to its “forward-looking” story line, in which an American billionaire funds a marine research facility led by Chinese scientists: “People think sad historical pieces are natural subject for co-productions. But consider the current situation of China-US relations.”

As US and Chinese film industries grow more codependent, they mutually reinforce a mode of production that disguises the desire for profit within the goal of universally accessible, “inclusive” entertainment. Even a “forward-looking” effort such as The Meg involves content compromise, with its blandly optimistic vision of joint US-China tech enterprises. Last fall, the New York Times editorial board wrote that “far too many American companies have shown that their values are for sale” as they court the Chinese market. It bears asking what values they think American corporations usually have.

There has been a remarkable degree of power redistribution as China’s film industry has found its footing. But the real cause for concern in the film industry is the emergence of global media branding, and the cultural monopoly shared between corporations and powerful state entities. Last year, Disney’s box office revenue reached $11.1 billion worldwide, far outstripping every other company. If any part of the US film industry is likely to be caught in the trade war’s crossfires, it’s independent and mid-budget films, which already suffer from skewed funding opportunities at home.

For Hollywood blockbusters, the balancing act between art and money remains the same as ever. The difference now is that US studios are playing on the turf of a more powerfully regulated industry player, making them susceptible to its rules. Whatever nationalist dreams are hawked by blockbusters, though, they have always been an ideological product: shaped by the view that entertainment should be welded to colossal profit.

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Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

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