Hollywood Is Learning How to Work in China—The Hard Way

October 22, 2019, 11:23 AM UTC

A week before its scheduled Oct. 25 release, Quentin Tarantino’s Once Upon a Time in Hollywood was pulled from movie theatres in China, reportedly after Tarantino declined to re-cut the film to meet government censors’ demands.

No official reason was given for the decision, though industry analysts speculated Once Upon a Time in Hollywood failed to pass censors because of its portrayal of martial arts icon Bruce Lee, which Lee’s daughter Shannon criticized as inaccurate and offensive. Previous Tarantino’s films, however, have been held up in Chinese cinemas over their graphic levels of violence.

Whatever the reason, Tarantino’s refusal to recut makes him an exception to Hollywood’s unspoken rule for China: do what you need to get access.

Many Hollywood films change lines and trim scenes if it means a spot on China’s cinema marquees. And an increasing number of U.S. filmmakers are co-producing with Chinese companies to gain an edge in the domestic market and make sure their film gets past China’s State Administration of Radio, Film, and Television (SARFT)—even if the track record for those films as a whole has been less than stellar.

Economically, it’s becoming harder for Hollywood to justify breaking Beijing’s rules. As the entertainment world’s center of gravity shifts to China—Chinese ticket sales are projected to reach $12.2 billion next year, surpassing the U.S. as the world’s largest film market—there is every reason to believe that exceptions like Tarantino will be ever more rare.

Co-productions and flops

Government-certified co-productions can skirt around China’s quota system, which limits the number of foreign films to 34 per year. Co-productions can also keep 43% of the revenue they earn in China, versus the 25% normally allotted to Hollywood movies.

So when the U.S.-China co-production Abominable, an animated movie about a teenage girl in Shanghai who finds a yeti on her roof, opened in cinemas on China’s National Day holiday, movie producers in Hollywood perked up.

Abominable‘s first-weekend China earnings of around $3 million, which put it in fourth place at the box office, were tiny compared to patriotic, state-funded blockbusters like My People, My Country, which was released Sept 30, the day before Abominable, and brought in almost $100 million in its first two days.

But Abominable is catching industry attention for its relative success in both China and the U.S., where it topped the box office in its opening weekend with $20 million in earnings.

The movie was jointly produced by DreamWorks Animation and Shanghai-based Pearl Studio (Pearl declined to comment for this article). It joins a handful of U.S.-China co-productions—like Kung Fu Panda 3, which Pearl also produced, and last summer’s shark thriller The Meg—that have the distinction of not bombing completely in the U.S. and China box offices.

The Meg and Kung Fu Panda 3 each raked in over half a billion dollars worldwide—and in both cases, over half of that revenue came from North America and China, which contributed around $150 million each.

However, U.S.-China co-productions are typically associated with movies like 2016’s The Great Wall, which brought in $45.5 million in the U.S. and $170 million in China on an estimated budget of as much as $200 million, which is seen as a “relative failure” in both markets, according to Stanley Rosen, a professor of Chinese politics, society, and cinema at the University of Southern California.

[The Great Wall] was intended to be the poster child and entering wedge for Chinese stories on the international market.” Rosen says. Instead, the film “hampered any desire for future large-scale productions of that type.”

Nor is it uncommon for co-productions to collapse before they even get filmed or released.

“The truth of it is every year there’s a lot of talk about co-productions and every year most of them fall apart for one reason or another—either they can’t agree on the final version of the script or they can’t agree on the final cut of the movie,” says Andre Morgan, a film and television producer who has worked between the U.S. and China for decades.

But producers keep trying, and their motivation is simple.

“They can make money!” says Shan Dongbing, founder of Donwa Pictures and a consultant for Chinese and foreign film companies. “The North America market and China market are the two largest markets in the world,” with at least 40% of the world market.

Last year, global box office sales totaled $41.1 billion. North American sales contributed $11.9 billion, and China added $8.9 billion. Next year, China is expected to surpass the U.S. as the world’s largest film market.

Navigating a political minefield

Even Abominable, an animated fantasy aimed at younger audiences, has not been able to avoid stirring controversy in its attempts to navigate the politically-charged landscape of business and entertainment in China.

Malaysia, Vietnam, and the Philippines all banned Abominable after its producers refused to cut a scene depicting a map that includes what is known as the “nine-dash line,” a demarcation of Chinese claims over disputed areas of the South China Sea.

Compared to China, those are small markets to lose. By including the nine-dash line, Abominable‘s producers signaled their alignment with China on the matter of its territorial claims.

Leaning the wrong way on issues deemed politically sensitive can jeopardize access to the Chinese market—as luxury brands, coffee chains, and entire countries have learned in the past, and the National Basketball Association is learning right now.

Hollywood has complied with China’s content restrictions for years. The industry’s eagerness to oblige censors was satirized in a recent episode of South Park, which itself disappeared from Chinese social media and streaming platforms after the episode aired.

The shifting goalposts of Chinese censorship are aggravated by political tensions like the U.S.-China trade war and U.S. support for the Hong Kong protests, and sometimes the potholes are harder to predict—like when Disney’s Christopher Robin was denied a China release in the midst of a crackdown on Winnie the Pooh launched over unfavourable Internet comparisons between the cartoon bear and Chinese President Xi Jinping.

Soft power, hard numbers

Under Xi, the Chinese Communist Party has focused on cultivating a homegrown film industry and exporting Chinese films across the world.

China’s box office revenue in the first week of October this year totaled $699 million—more than the $630 million brought in for the entire year in 2008.

While Marvel franchise movies and other Hollywood fare still earn huge revenues in China, domestic films accounted for 62% of total box office revenue in 2018, a far higher proportion than five or 10 years before, when Chinese films languished and Hollywood routinely hogged the top box office spots.

USC’s Rosen says that co-productions can benefit China’s film industry because they bring more opportunity for above- and below-the-line Chinese talent and input.

“This helps Chinese soft power—telling China’s story to overseas audiences—and also helps Chinese technical expertise, which includes learning storytelling and filmmaking from Hollywood,” Rosen says.

But co-productions flopped so many times and gained such a bad reputation among Chinese audiences for their clumsy pandering to China that The Meg’s China distributor, Gravity Pictures, downplayed its involvement in the film and marketed it as a straight-up Hollywood blockbuster so that audiences would not be deterred, according to Catherine Xujun Ying, Gravity’s CEO.

Shan says co-productions that want to succeed in the Chinese market must make an effort to appeal to Chinese audiences. It’s not enough to film scenes in Shanghai or Macau or throw in a Chinese supporting actor—it has to be “genuine.”

“If they want to make a co-production in China they need to know about China,” Shan says, citing Kung Fu Panda as a successful example.

Abominable seems to have achieved the elusive goal of co-productions that Shan describes: crafting characters and a story that appeal to domestic audiences in both countries. Its creators made sure every detail, down to the trash cans, was accurate to the setting, and altered the Mandarin version of the movie to include jokes that might resonate more with viewers in China.

Rosen believes animated films like Abominable—which can be easily modified for different markets—are “the best hope for co-productions.”

For now, Hollywood’s success in China may have more to do with relations between the White House and Beijing than with accurate cultural portrayals. As China and the U.S. slug out their trade war, Morgan, for one, worries about current U.S.-China co-productions—but is optimistic in the long-term.

“I’m quite pessimistic about the next couple of years, not because of the rules and regulations in China but because of the political mood in America,” Morgan says, explaining that the current bipartisan hostility to China means films that could make for good co-productions may not necessarily resonate with U.S. audiences today.

“It’s just timing, because at the end of the day, internationally the film industry is about commerce. Propaganda is a secondary outcome,” Morgan says.

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