China has never been shy about its desire to acquire “soft power” – the kind of cultural and economic influence that can’t be wielded by military might. And Hollywood has often been a partner in its project.
China’s bid for soft power was on show this week, as Sony Pictures Entertainment formed an alliance with Dalian Wanda, a Chinese company that has become one of the world’s largest media empires, in a deal announced Friday. While the partnership was smaller than some of Dalian Wanda’s previous acquisitions, it attracted attention as the Chinese company’s third major deal in Hollywood this year.
These deals have sparked concern over whether China’s expanding influence in Hollywood could lead to more pro-Chinese propaganda in U.S. films. The Chinese government tightly controls media content, and Hollywood studios have been known to alter films to feature China or the Chinese government in a more flattering light to gain access to the country’s lucrative film market.
For Hollywood, China provides the blockbuster combination of a huge movie market and cash-rich equity funds that are eager to invest in films and companies. The Chinese box office is on pace to soon surpass the U.S. as the world’s biggest market, perhaps next year.
On Sept. 15, 16 members of Congress mentioned the Chinese company by name in a letter that called for greater scrutiny of foreign investments. The 14 Republicans and two Democrats said that Dalian Wanda’s acquisitions have raised concerns “about China’s efforts to censor topics and exert propaganda controls on American media.”
The partnership -- in which the Chinese company will help promote Sony films in China and co-finance some of Sony's biggest China movie releases -- comes on the heels of two major acquisitions. In January, Dalian Wanda announced the acquisition of Legendary Entertainment, the Hollywood production company behind such blockbusters as “Jurassic World” and “The Dark Knight.” In March, AMC Entertainment, a U.S. cinema chain previously acquired by Dalian Wanda, made a bid for Carmike Cinemas that would make Dalian Wanda Group the owner of the biggest cinema chain in the United States.
The Chinese company is expanding elsewhere, acquiring cinema chains in Australia and Europe in steps toward its goal of controlling 20 percent of the global film market by 2020. It is also heavily investing in China's domestic industry, including a 400-acre film studio slated to open in 2017 that will have 30 soundstages, an underwater stage, and a permanent set of a New York City street.
In announcing the Sony Pictures deal, the Chinese company vowed to increase China's influence. In a statement, Dalian Wanda said it would "strive to highlight the China element in the films in which it invests." "The alliance will help strengthen Wanda’s power to influence the global film industry, and set a good precedent for Chinese film producers in their international investment,” the company said.
The owner and founder of Dalian Wanda, Wang Jianlin, has been plain about his desire to expand China’s global media influence. Wang, who is China’s richest man, said in a Chinese television interview in August that he would like to “change the world where rules are set by foreigners.”
As the owner of a nascent theme park chain, Wang also sparred with Disney, which opened its first park in mainland China in June. “They shouldn’t have entered China. We have a [saying]: one tiger is no match for a pack of wolves. Shanghai has one Disney, while Wanda, across the nation, will open 15 to 20,” Wang said, according to Fortune. “Disneyland is fully built on American culture. We place importance on local culture.”
Wang’s statements about expanding soft power are likely an appeal to the Chinese government, which has crafted an explicit policy to export Chinese cultural content and increase the country’s soft power. On Jan, 1, 2014, China’s president, Xi Jinping, published an article in the state newspaper People’s Daily saying the country needed to promote its soft power and build its image abroad.
“From a political standpoint, this is very much in line with Chinese media policy, and Wang Jianlin is closely aligned with these policymakers,” says Aynne Kokas, an assistant professor of media studies at the University of Virginia and the author of the forthcoming book “Hollywood Made in China.” So it's a short leap to think Wang means to use his corporate power to expand China's influence abroad, she says. “I think we should believe Wang Jianlin when he tells us what he plans to do.”
Tensions are further complicated because, while the United States freely permits Chinese investment in its film sector, China tightly controls U.S. investment in films in China. In addition, an agreement between the United States and China that permits American companies to export a total of 34 films to China per year is set to expire in February. The need for U.S. investment in the Chinese film industry has declined in recent years, sparking speculation that China could further restrict the number of American films it allows into its market.
Ironically, Sony sparked similar fears of foreign incursion in the U.S. market 27 years ago, when the Japanese company purchased Columbia Pictures Entertainment for $3.4 billion in cash. It was the largest acquisition to date by a Japanese firm. At the time, Sony pledged to keep the movie and TV studio “as independent as possible, as a full-fledged member of the U.S. film industry.”
Wanda’s U.S. operations also came under scrutiny Thursday, the day before the Sony Pictures partnership was announced, for allegedly using foreign money to challenge a local ballot measure in Beverly Hills that would decide a conflict between Wanda and the Beverly Hilton over plans to develop a local parcel of land. A local labor union representing hotel workers filed a complaint Thursday that Wanda had used foreign money to influence the ballot measures, in contravention of U.S. law. Wanda denied the allegation.
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