Assessment of Opportunities to Engage with the Chinese Film Market

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Title:  Assessment of Opportunities to Engage with the Chinese Film Market

Date Originally Written:  July 29, 2020.

Date Originally Published:  November 11, 2020.

Author and / or Article Point of View:  The author believes that the film industry remains a relatively underexploited channel that can be used to shape the soft power dynamic in the U.S.-China relationship.

Summary:  While China’s film industry has grown in recent years, the market for Chinese films remains primarily domestic. Access to China’s film market remains heavily restricted, allowing the Chinese Communist Party to craft a film industry that can reinforce its values at home and abroad. However, there are opportunities for the United States to liberalize the Chinese film market which could contribute to long-term social and political change.

Text:  The highest-grossing Chinese film is 2017’s Wolf Warrior 2, netting nearly $900 million globally. For the Chinese Communist Party (CCP), the only problem is that a mere 2% of this gross came from outside the country. For the CCP, this is a troubling pattern replicated across many of China’s most financially successful films[1]. Last year, PricewaterhouseCoopers predicted that the Chinese film market would surpass the United States’ (U.S.) in 2020, growing to a total value of $15.5 billion by 2023[2]. Despite tremendous growth by every metric – new cinema screens, films released, ticket revenue – the Chinese film industry has failed to market itself to the outside world[3].

This failure is not for lack of trying: film is a key aspect of China’s project to accumulate soft power in Africa[4], and may leave a significant footprint on the emergent film markets in many countries. The Chinese film offensive abroad has been paired with heavy-handed protectionism at home, fulfilling a desire to develop the domestic film industry and guard against the influence introduced by foreign films. In 1994 China instituted an annual quota on foreign films which has slowly crept upwards, sometimes being broken to meet growing demand[5]. But even so, the number of foreign films entering the Chinese market each year floats between only 30-40. From the perspective of the CCP, there may be good reasons to be so conservative. In the U.S., research has indicated that some films may nudge audiences in ideological directions[6] or change their opinion of the government[7]. As might be expected, Chinese censorship targets concepts like “sex, violence, and rebellious individualism”[8]. While it remains difficult to draw any definite conclusions from this research, the threat is sufficient for the CCP to carefully monitor what sorts of messaging (and how much) it makes widely available for consumption. In India, economic liberalization was reflected in the values expressed by the most popular domestic films[9] – if messaging in film can be reflected in political attitudes, and political attitudes can be reflected in messaging in film, there is the possibility of a slow but consistent feedback loop creating serious social change. That is, unless the government clamps down on this relationship.

China’s “national film strategy” has gone largely un-countered by the U.S., in spite of its potential relevance to political change within the country. In 2018, Hollywood’s attempt to push quota liberalization was largely sidelined[10] and earlier this year the Independent Film & Television Alliance stated that little progress had been made since the start of the China-U.S. trade war[11]. Despite all this, 2018 revealed that quota liberalization was something China was willing to negotiate. This is an opportunity which could be exploited in order to begin seriously engaging with China’s approach to film.

In a reappraisal of common criticisms levied against Chinese engagement in the late 1990s and early 2000s, Alastair Iain Johnston of Harvard University notes that Chinese citizens with more connections to the outside world (facilitated by opening and reform) have developed “more liberal worldviews and are less nationalistic on average than older or less internationalized members of Chinese societies”[12]. The primary market for foreign films in China is this group of “internationalized” urban citizens, both those with higher disposable income in Guangdong, Zhejiang, Shanghai, Jiangsu, Beijing, and Tianjin[13] and those in non-coastal “Anchor Cities” which are integrated into transport networks and often boast international airports[14]. These demographics are both likely to be more amenable to the messaging in foreign films and capable of consuming them in large amounts.

During future trade negotiations, the U.S. could be willing to aggressively pursue the offered concession regarding film quotas, raising the cap as high as possible. In exchange, the United States Trade Representative could offer to revoke tariffs imposed since the trade war. As an example, the “phase one” trade deal was able to secure commitments from China solely by promising not to impose further tariffs and cutting a previous tariffs package by 50%[15]. The commitments asked of China in this agreement are far more financially intensive than film market liberalization, but it is difficult to put a price tag on the ideological component of film. Even so, the party has demonstrated willingness to put the quota on the table, and this is an offer that could be explored as part of a strategy to affect change within China.

In addition to focusing on quota liberalization in trade negotiations, state and city governments in the U.S. could engage in local diplomacy to establish cultural exchange through film. In 2017, China initiated a China-Africa film festival[16], and a similar model could be pursued by local government in the U.S. The low appeal of Chinese films outside of China (compared to the high appeal of American films within China) means that the exchange would likely be a “net gain” for the U.S. in terms of cultural impression. Chinese localities with citizens more open to foreign film would have another avenue of engagement, while Chinese producers who wanted to take advantage of the opportunity to present in exclusive U.S. markets may have to adjust the overtones in their films, possibly shedding some nationalist messaging. Federal or local government could provide incentives for theaters to show films banned in China for failing to meet these messaging standards. Films like A Touch of Sin that have enjoyed critical acclaim within the U.S. could reach a wider audience and create an alternate current of Chinese film in opposition to CCP preference.

Disrupting the development of China’s film industry may provide an opportunity to initiate a process of long-term attitudinal change in a wealthy and open segment of the Chinese population. At the same time, increasing the market share of foreign films and creating countervailing notions of “the Chinese film” could make China’s soft power accumulation more difficult. Hollywood is intent on marketing to China; instead of forcing them to collaborate with Chinese censors, it may serve American strategic objectives to allow competition to consume the Chinese market. If Chinese film producers adapt in response, they will have to shed certain limitations. Either way, slow-moving change will have taken root.


Endnotes:

[1] Magnan-Park, A. (2019, May 29). The global failure of cinematic soft power ‘with Chinese characteristics’. Retrieved July 29, 2020, from https://theasiadialogue.com/2019/05/27/the-global-failure-of-cinematic-soft-power-with-chinese-characteristics

[2] PricewaterhouseCoopers. (2019, June 17). Strong revenue growth continues in China’s cinema market. Retrieved July 29, 2020, from https://www.pwccn.com/en/press-room/press-releases/pr-170619.html

[3] Do Chinese films hold global appeal? (2020, March 13). Retrieved July 29, 2020 from
https://chinapower.csis.org/chinese-films

[4] Wu, Y. (2020, June 24). How media and film can help China grow its soft power in Africa. Retrieved July 30, 2020, from https://theconversation.com/how-media-and-film-can-help-china-grow-its-soft-power-in-africa-97401

[5] Do Chinese films hold global appeal? (2020, March 13). Retrieved July 29, 2020 from
https://chinapower.csis.org/chinese-films

[6] Glas, J. M., & Taylor, J. B. (2017). The Silver Screen and Authoritarianism: How Popular Films Activate Latent Personality Dispositions and Affect American Political Attitudes. American Politics Research, 46(2), 246-275. doi:10.1177/1532673×17744172

[7] Pautz, M. C. (2014). Argo and Zero Dark Thirty: Film, Government, and Audiences. PS: Political Science & Politics, 48(01), 120-128. doi:10.1017/s1049096514001656

[8] Do Chinese films hold global appeal? (2020, March 13). Retrieved July 29, 2020 from
https://chinapower.csis.org/chinese-films

[9] Adhia, N. (2013). The role of ideological change in India’s economic liberalization. The Journal of Socio-Economics, 44, 103-111. doi:10.1016/j.socec.2013.02.015

[10] Li, P., & Martina, M. (2018, May 20). Hollywood’s China dreams get tangled in trade talks. Retrieved July 29, 2020, from https://www.reuters.com/article/us-usa-trade-china-movies/hollywoods-china-dreams-get-tangled-in-trade-talks-idUSKCN1IK0W0

[11] Frater, P. (2020, February 15). IFTA Says U.S. Should Punish China for Cheating on Film Trade Deal. Retrieved July 30, 2020, from https://variety.com/2020/film/asia/ifta-china-film-trade-deal-1203505171

[12] Johnston, A. I. (2019). The Failures of the ‘Failure of Engagement’ with China. The Washington Quarterly, 42(2), 99-114. doi:10.1080/0163660x.2019.1626688

[13] Figure 2.4 Urban per capita disposable income, by province, 2017. (n.d.). Retrieved July 30, 2020, from https://www.unicef.cn/en/figure-24-urban-capita-disposable-income-province-2017

[14] Liu, S., & Parilla, J. (2019, August 08). Meet the five urban Chinas. Retrieved July 30, 2020, from https://www.brookings.edu/blog/the-avenue/2018/06/19/meet-the-five-urban-chinas

[15] Lawder, D., Shalal, A., & Mason, J. (2019, December 14). What’s in the U.S.-China ‘phase one’ trade deal. Retrieved July 30, 2020, from https://www.reuters.com/article/us-usa-trade-china-details-factbox/whats-in-the-u-s-china-phase-one-trade-deal-idUSKBN1YH2IL

[16] Fei, X. (2017, June 19). China Africa International Film Festival to open in October. Retrieved July 30, 2020, from http://chinaplus.cri.cn/news/showbiz/14/20170619/6644.html

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