The New Paradigm of Eastern Hollywood

While economic markers points to China’s economy slowing down, its appetite for films is only forecast to grow. While manufacturing has contracted, the entertainment industry has posted a 17% growth over the past five years, worth $180 billion, and is only expected to grow larger.

At four times the population of the U.S., China is the golden egg of the film industry. It’s entirely rational to think that China’s filmgoing population will one day soon be larger than the U.S.’s. The average Chinese citizen goes to the movies less than once a year compared to the U.S.’s four times. China represents a huge potential for growth. Already the pavement is being laid for massive penetration of this market. China is building 15 new movie screens daily. Rising disposable income means more people with the ability to go to the movies. As such, all studios have an eye on the Chinese market. Hollywood has been devising ways to get around the 34 foreign film quota that the Chinese government has in place, while at the same time that Chinese entertainment companies are looking to extend their soft cultural power, leading to unique clashes of culture as well as ludicrous business opportunities.

In February, China’s Perfect World Pictures inked a deal with Universal Pictures for a five-year 50-film co-financing venture. The month before, Wang Jianlin bought Legendary Entertainment for $3.5 billion. Wang is chairman of China’s largest commercial real-estate developer (i.e. builder of the malls anchored by theatres), Dalian Wanda Group, which also owns the world’s largest movie theatre operator, AMC Entertainment Holdings. At the same same, Wanda Group is developing one of the world’s largest movie-production facilities, harboring 30 soundstages, permanent sets featuring New York City streets and underwater locations, as well as a theme park and hotel to accommodate families of cast and crew.

Wanda Studios Qingdao is currently where The Great Wall is being shot, using a life-size model of the Wall. Wang wants to make such collaborations routine and eventually create one of the world’s premier entertainment companies. It may sound like folly but for all the strengths of China’s economy, the country has made few successful forays into high-end, globally competitive creative industries.

Dreamworks partnered with state-owned businesses back in 2012 to create Oriental Dreamworks, which fully produced the third sequel to Kung Fu Panda. Having one-third of its production in China and one-third of its actors Chinese, allowed it to be considered a local film, gaining access to popular holiday screenings. Another underline to China’s film potential: Kung Fu Panda 3 opened to $57 million in China, $16 million more than its U.S. opening.

Hollywood is looking for the next market, and China is looking for international soft power, as well as box office returns in their own right. As more and more films are co-produced and co-financed, more and more cultural counter-flow will occur. Already, Hollywood is colored by Chinese monetary influence. Z. John Zhang, a marketing professor at Wharton, remarks that ““You will not see a Chinese communist as a villain in a Hollywood big budget movie anytime soon.” With the release of The Great Wall, we will have a $150 million half-Chinese blockbuster released in the U.S.

The arc of moviemaking history may not lead to China, but it definitely leads away from Hollywood. The conditions that predicated Hollywood’s dominance no longer exist. Concentrated vertical production no longer necessitates a successful film. The studio system that churned out tens of films based on distribution of labor in one city has been replaced by off-shore (or at least out-of-town) production and postproduction. A recent study by Film L.A. found that “there isn’t a single live-action movie with a budget estimate over $100 million that shot primarily in California”(1).

As Robert Simonds, chief executive of STX Entertainment, says, “For the first time, a country other than America is about to have a giant domestic market–and that is China. The fact that China is going to become a major player in global storytelling is this inflection point that we are living right now.” China’s financial power is translating into soft power, the power to shape global cultural conversation as well as shape cultural exchange between the US and China. Erich Schwartzel writes for the Wall Street Journal that Hollywood is “careful to consider the Chinese box office when making any risky production decisions.” Only time will tell if this will lead to more international tastes entering Hollywood’s lexicon or if it will lead to more conservative and regressive storytelling in order to fit Chinese censures.

1.McDonald, Adrian. “Feature Film Study.” Film L.A. (2014): n. pag. Print.