How Hollywood Is Losing Out To The Chinese Government

Richard Berman President, Berman and Company
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Brad Pitt, Harrison Ford, and a host of other actors-turned-activists have been critical of Chinese foreign policy. Ford was even banned from China after testifying at the U.S. Senate Foreign Relations Committee in support of a “Free Tibet.”

But what they should be more worried about is China’s takeover of American film studios and movie theater chains.

In 2012, the Chinese firm Dalian Wanda bought AMC Entertainment—the second largest movie theater chain in the country—for about $2.6 billion. The company then purchased Legendary Entertainment—the film studio responsible for “Dark Knight” trilogy—for an even heftier $3.5 billion in January of this year. And in March, Dalian Wanda agreed to acquire Carmike Cinemas for roughly $737 million, which would form the country’s largest chain with more than 600 theaters (the deal is expected to close in late 2016).

As if that wasn’t enough, the company is also interested in purchasing at least a portion of Lionsgate, the $4.7 billion producer of “The Hunger Games.”

This matters because Dalian Wanda’s founder and chairman, Wang Jianlin, has strong ties to China’s ruling Communist Party. Wang served in the People’s Liberation Army between 1970 and 1986, at which time he was appointed Office Director of the Xigang District Government in Dalian, China. Wang also served as a deputy to the 17th National Congress of the Communist Party and was twice named China’s “Economic Person of the Year” by CCTV, the state-run television network.

Dalian Wanda has even sold stakes in the company to various family members of elected officials. This includes the elder sister of President Xi Jinping and relatives of two members of the Politburo—China’s principal policymaking committee—who provided seed money to the company.

As The New York Times reports, “[E]ven the most successful businessmen [in China] must still reach some accommodation with the party, which only a generation ago operated a socialist planned economy.” Wang Jianlin is no exception.

And how does this affect U.S. cinema?

Acquisitions of major film studios and movie theater chains grant Dalian Wanda unilateral control of both production and distribution channels. In other words, a Chinese company closely aligned to the Communist Party will have direct say over both the production of a movie and its release to the public. Wang could, in theory, refuse to show movies unapproved by the Chinese government in one of his many movie theaters.

Assuming he wouldn’t would be a failure to imagine: Wang already describes his recent activities as “cross-border cultural acquisition[s],” suggesting something more than business as usual. He has also taken an aggressive stance against U.S. companies including Disney, calling it “one tiger” compared to Dalian Wanda’s “pack of wolves.”

Chinese censorship is already a grim reality nowadays. The 2012 remake of “Red Dawn,” for example, originally featured Chinese soldiers invading an American town; but moviemakers change the antagonists to North Koreans, “which seemed a safer target.” Chinese diplomats reportedly arranged a conversation with the filmmakers, who then “eras[ed] references to China in post-production.”

Dalian Wanda’s foray into Hollywood—including the possible purchase of Lionsgate—only makes the promotion of pro-China propaganda more likely.

It’s time for Hollywood’s conscientious celebrities to read the tea leaves.

Richard Berman is the president of Berman and Company, a public affairs firm in Washington, D.C.