A year is a long time in Tinseltown. At the end of 2016 Wang Jianlin, the chairman of Dalian Wanda, the Chinese property, retail and entertainment group, appeared on the front of the film industry bible The Hollywood Reporter, to reveal a startling interest: he wanted to invest in each of the big six movie studios with the aim of eventually acquiring one.
One of China’s richest men, Mr Wang, known to employees and colleagues as “the chairman”, had already earned a reputation in Hollywood for big talk — and for having the firepower to back it up. Wanda had spent $2.6bn on the AMC cinema chain and $3.5bn on Legendary Entertainment, the company behind movies such as Godzilla and Pacific Rim. Those deals were part of a string of investments by Chinese entities in US entertainment, part of a co-ordinated push under President Xi Jinping to change the country’s image. Wanda was one of its prime exponents: in an April interview with the Financial Times Mr Wang said the company contributed “significantly” to the rise of Chinese “soft power and cultural influence”.
But fast forward 12 months and Mr Wang and his fellow countrymen are in retreat from Hollywood, part of a Chinese crackdown on capital flight. Paramount Pictures’ $1bn three-year film financing deal with Huahua Media, a Chinese entertainment group, has been scrapped, which the Viacom-owned studio said was due to “recent changes to Chinese foreign investment policies”. Wanda’s planned $1bn purchase of Dick Clark Productions, the company that produces the Golden Globes awards show, was also pulled. Mr Wang, meanwhile, has not been seen in Hollywood for several months: in the summer Wanda denied rumours that he had been forbidden from leaving China.
Once considered the perfect backdrop to project soft power, China appears to have soured on expanding its presence in US film. Jeffrey Katzenberg, the former DreamWorks Animation chief executive — and who was instrumental in forming Oriental DreamWorks with Chinese partners — says there has been a noticeable change.
Jiang Wen, left, and Donnie Yen in ‘Rogue One’. Many big budget US movies now feature Chinese stars
“There was this shift in policy to a more nationalistic approach,” he told the FT. As well as the crackdown on capital outflows, he says China’s soft power ambitions have been superseded by its One Belt, One Road initiative, which seeks to build infrastructure that will join China to Central Asia, Europe and Africa by land and sea.
The change in approach has been keenly felt in Hollywood, where Chinese entities “were basically giving away free money”, according to one senior film executive. That tap has now been turned off — at least, for now.
The question that remains is after striking a flurry of deals and tie-ups with the US movie industry, did China get much of a bang for its buck?
Jeffrey Katzenberg, the former DreamWorks Animation chief executive who helped formed Oriental DreamWorks © Getty
Despite the recent change in policy, China’s influence in Hollywood has risen sharply over the past decade. “While there has been a shift in capital flows you would be hard pressed to find a producer in Hollywood willing to make a film that portrays China negatively,” says Aynne Kokas, a fellow at the Woodrow Wilson Center and the author of Hollywood Made in China. This development reflects the size of China’s cinema market, which has grown rapidly in line with the urbanisation of the country, according to IMAX chief executive Richard Gelfond. The big screen operator has 482 screens in China.
He points to the size of the market 15 years ago when China was “a very small part of the global box office”: now it rivals the US, the world’s largest theatrical market. China’s box office takings grew an average of 35 per cent a year in the past decade according to data from EntGroup, the consultancy, although growth slowed to 3.5 per cent in 2016, generating Rmb45.3bn — or almost $7bn — and is set to fall again this year. The North American box office, by contrast, was worth about $11.4bn in 2016.
Hollywood producers do not want to risk falling foul of the country’s censors and have their films denied access to such a big market. “China is incredibly important in terms of whether Hollywood movies succeed,” says Dede Nickerson, the founder of Infinity Pictures in Beijing. “It is not uncommon for US films to have better box office results in China than in the US.”
Matt Damon in ‘The Martian’: a film that portrays American and Chinese characters working together
The biggest studios, such as Walt Disney, Warner Brothers, Universal and Sony Pictures, make films that portray China and Chinese characters in a positive light. Many big budget US movies now feature Chinese stars, often in supporting roles: Jiang Wen and Hong Kong’s Donnie Yen both starred in Rogue One, the recent Star Wars prequel, while Chinese actress Jing Tian appeared in this year’s Kong: Skull Island from Wanda’s Legendary — albeit in a role with barely any lines.
The greater visibility of Chinese characters in Hollywood storylines “is much more driven by economic concerns than by soft power”, says Mr Gelfond. Marketing to the Chinese audience is not just about selling tickets, he argues. “It’s the merchandise and other ancillary revenue available there.”
Hollywood-made science fiction films increasingly portray China and the US as having harmonious, co-operative relations, despite the growing geopolitical tensions between the two countries. Professor Kokas points to recent movies such as Arrival and The Martian, two sci-fi films that portray American and Chinese characters working together. “Ultimately they are very positive depictions of US-China collaborations which does not reflect what happens in the real world,” she says.
China has a history of taking offence at films that tackle politically sensitive topics or which portray the country in a contentious light. Kundun and Seven Years in Tibet, both released 20 years ago, outraged censors and were banned in the country.Walt Disney produced the Martin Scorsese-directed Kundun, a story of the Dalai Lama that infuriated the Chinese government. Given that the group planned to develop theme parks and release more movies in China, it then hired Henry Kissinger to lobby officials in Beijing to repair relations.
Actors that have starred in offending movies found that their other work would not be screened in China. Brad Pitt was reportedly banned from China after his 1997 film Seven Years in Tibet, although the ban appeared to have been lifted by 2014, when he visited the country with his wife, Angelina Jolie.
Richard Gere’s criticism of China had a similarly detrimental effect. A supporter of Tibetan independence and an ally of the Dalai Lama, Gere said in an interview with The Hollywood Reporter this year that his political views had limited his work. “There are definitely movies that I can’t be in because the Chinese will say, ‘Not with him’. I recently had an episode where someone said they could not finance a film with me because it would upset the Chinese.”
Billionaire Wang Jianlin, chairman and president of Dalian Wanda © Bloomberg
Risking access to such a vast market means the biggest studios are much more reluctant to make films that even hint at criticism of China. “For the China market you self censor because of its size,” says Stanley Rosen, a China specialist at the University of Southern California. “But there has been a backlash in