China’s ship to the West has sailed. I wonder how often have I heard this phrase from German politicians or business leaders in the past 45 years I was involved with the People’s Republic? Society has allowed itself to be taken over by the charms of the capitalist dream, be it in fashion, pop music, lifestyle, fast-food chains, soft drinks or cars. Actually, it is quite the opposite. The Party has subjugated the souls of Western entrepreneurs and made them addicted to the market. It is using China’s purchasing power to subvert American soft power Hollywood-style and “influence its content”.
In his new book, “Red Carpet – Hollywood and China,” (Penguin 2022) he describes for the first time how Beijing has managed to score heavily in the “global battle for cultural dominance”. Wall Street Journal (WSJ) Hollywood correspondent and book author Erich Schwartzel concludes that China managed to turn its economic leverages into political ones over the past 20 years. With astounding success.
I witnessed part of this saga myself. “The future belongs to us. We are 1.3 billion people. Starting in 2018, we will be the biggest in the movie business,” boasted Wang Jianlin, (王健林) head of real estate conglomerate Wanda and a multi-billionaire in September 2013 during the groundbreaking ceremony of a new cinema city in Qingdao. He had its name “Film Capital of the East” (东方影都) erected in meter-high letters on the hill of Sun Mountain (朝阳山) off the west coast of the port city. As a counterpart to the “Hollywood” sign on the Beverly Hills, the world-famous logo of the United States’ soft power.
Wang promised to build the most technically advanced and largest movie studios in the world. Starting in 2018, “at least a hundred films” would be produced per year, including 30 international blockbusters, which would also be co-produced with Hollywood studios. He also announced annual film festivals. Qingdao would become the Chinese Cannes.
I was among the handful of foreign correspondents Wang invited to attend the two-day extravaganza. The first thing we saw was an unusually long red carpet. Wang planned a spectacular show, for which he had flown in everyone who was anyone in Hollywood. Still jet-lagged, they had to walk the carpet for him in the evening. I wrote at the time: “Wang holds court, has 27 megastars parade: They are all there: Leonardo DiCaprio, Nicole Kidman, Catherine Zeta-Jones, John Travolta, Kate Beckinsale, Ewan McGregor, Christoph Waltz. Representing China are Zhang Ziyi, Jet Li to Tony Leung. Also in attendance are studio bosses from Warner Brothers, Universal, Paramount, Sony, Lions Gate, Harvey Weinstein and the President of the Academy of Motion Picture, which awards the Oscars. According to the WSJ, Wang paid $50 Million alone to bring everyone in.
The Hollywood stars didn’t even know the name Qingdao before they arrived. John Travolta had spread his fingers when journalists asked him what he thought of the (not yet existing) cooperation between Hollywood and China’s film industry. He gave the less-than-believable response that he was “thrilled”. Christoph Waltz wittily responded about how he would feel on a carpet that was going nowhere: “The red carpet here is a little redder than usual.”
The studio bosses had persuaded their stars to tag along. They believed that Wang would give them access to the film business in China. The magic word was box office revenue. In 2012, the People’s Republic rose to become the second-largest cinema market after the United States, with $2.7 billion at the box office. The new market became even more attractive after Beijing increased its import quotas for US movies from 20 per year to 34. In addition, the studios received a quarter of the earnings from their films at the box office, instead of the previous 13 percent.
Hollywood first became aware of Wang in 2012 when he bought AMC Group, one of the largest movie theater operators in the US, for $2.5 billion. Wang had previously expanded his real estate business to include a new entertainment pillar, investing in film and cultural businesses. He acquired Chinese cinema groups. With AMC, he suddenly owned every tenth cinema in the world and a third of all IMAX movie theaters.
After his billion-dollar investment in the Qingdao film city project, Wang’s rise seemed unstoppable. In 2016, he acquired Hollywood’s Legendary Entertainment film studio, which had produced blockbusters such as Batman, for $3.5 billion. He bought more cinema chains and built half a dozen large theme and amusement parks in China to compete with Disney.
Wang’s rise ended abruptly in 2017, when he sold off all of his foreign investments and domestic cultural, leisure and theme parks. He sold them, including his Qingdao film city, to real estate group Sunac for the equivalent of €6 billion. Wang did not even regain one-tenth of his total investment, wrote financial journal Caijing.
Beijing had stopped him. He had fallen out of favor with Party leader Xi Jinping. He long enjoyed the support of soccer fan Xi, for whom he played the role of sports lobbyist at Fifa and bought a 20 percent stake in the Spanish team “Atlético de Madrid” for $46 million in 2015. His plans to break Hollywood’s cultural dominance with a Chinese movie city were also in Xi’s interest. But Wang had invested more than $20 billion in his overseas projects and even more in cultural parks. Like Wang, a group of other Chinese billionaires who had bought prestige projects around the world was brought down. Xi was wary of them. He also sensed capital flight.
In the book “Red Carpet,” author Erich Schwartzel dedicates a separate chapter to the “rise and fall of China’s richest man”. He reveals that in 2017, Xi “personally, forbade China’s state-owned banks from lending to Wanda for further overseas acquisitions”. Party member Wang understood the warning, sold, and returned to his former core real estate business. That’s how he survived the low blow economically. Since 2020, he once again began to invest, but “low key” in the northeast metropolis of Changchun, in a combined cinema, real estate, tourism and sports project.
The Qingdao Film City also opened “low key” in 2018 under its new owner. Its modern studios have so far produced few blockbusters co-produced with Hollywood, such as “Pacific Rim 2” 《环太平洋：雷霆再起》or “The Great Wall”《长城). Qingdao is mainly used by domestic television productions.
The competition against the influence of the US soft power is waged by Beijing with the familiar methods of economic blackmail and threats. “Red Carpet” depicts how China’s influence on Hollywood and the Disney corporation is growing. Both giants repeatedly bow to Beijing’s censors for fear of losing the market with the world’s highest box-office revenue since 2020.
In his chapter on “Censorship,” Schwartzel lists dozens of examples of how China uses its economic power as political leverage to alter movies and screenplays that would allegedly belittle the People’s Republic or harm its system. I highly recommend the book. After all, the topic of Chinese influence is just as relevant in Europe and Germany as it is in the United States.
There, Beijing has taken the edge off Hollywood, whose movies China has only allowed to be imported since 1994. No issue seems too small for Beijing not to take offense. China’s censors objected to a chase sequence in the 2006 movie “Mission Impossible III”. As Tom Cruise rushes through Shanghai’s streets, one scene shows laundry hung out to dry between narrow apartment blocks. That didn’t fit the cityscape of modern Shanghai. Paramount Pictures cut the scene.
Less amusing was the demand of the watchdogs about the movie “Man in Black 3”. All scenes where Will Smith and Tommy Lee Jones pull out their high-tech erasers to wipe the memory of eyewitnesses had to be cut. This apparently could have been misinterpreted as an allusion to China’s control.
Censors would always force Hollywood to make changes as soon as they suspected sensitive details, be it about Tibet, Tiananmen or China’s claim to the South China Sea. Sex scenes are also taboo, even in James Bond. The 2015 fantasy movie “Pixel” had its scene of video game characters destroying China’s Great Wall removed. Instead, the Taj Mahal disintegrates. Premature censorship and anticipatory obedience are rampant at US film studios.
Back when Wang bought the AMC movie theater chain in 2012 and transformed his group, Hollywood even admired how market-oriented a communist entrepreneur could act. Schwartzel writes, “It only took a few months between 2016 and 2017 for Hollywood to learn who really calls the shots in China.”
This realization in 2017 about Wang did not travel from Hollywood to Wall Street. In 2020, brokers were shocked when Party leader Xi cleaned up China’s high-tech overachievers, who he deemed too capitalistic and politically overconfident. He took down the Alibabas and Tencents down a notch, all seemingly out of the blue. Actually, Wall Street should have seen it coming.