Cultural Issues Color Movie Export Picture

Jack Valenti, Hollywood’s leading lobbyist, has long had an eye on China, an untapped movie audience of epic proportions. No fewer than four times has he visited Beijing to urge officials to allow more U.S. films into the country. The response has been friendly--but noncommittal.

“I told the Chinese: ‘This is a modest proposal,’ ” Valenti said of the plan he first offered in April 1998. “It’s not something that’s going to tear down the Great Wall of China.”

It is, however, one of a handful of items in limbo as the leaders of China and the United States determine whether they can complete a broad economic deal that would secure China’s admission to the world trading system in the near future. Other unfinished business entails banking, investment and apparel--and even whether China should be granted the more lenient trade rules that apply to emerging nations.

Yet movies uniquely however, touch on political sensitivities that have nothing to do with economics.

“They don’t want to have movies shown that promote different values,” said Bruce Dickson, a China specialist at George Washington University. “Officially, at least, it’s a pretty puritanical system.”

U.S. trade officials have been very quiet about the actual give-and-take with Chinese negotiators before the talks ran aground last spring. But an accidental posting on the Internet in April by from the U.S. trade representative’s office provided an unusual peek at America’s position in the closed-door deliberations.

China, which does not even acknowledge imposing a quota on Hollywood, has allowed just eight major first-run American movies into the country since 1998, according to the Motion Picture Assn. of America: “Volcano,” “Daylight,” “Titanic,” “Home Alone 3,” “Deep Impact,” “Saving Private Ryan,” “Mulan” and “Enemy of the State.”

The Internet posting, which was removed within hours, made clear that U.S. negotiators were attempting to smash the barrier. It declared that China would allow “at minimum” 40 movies as soon as it joined the world trading system, and that it would boost that number to 50 over the following two years. These provisions, it turned out, reflected U.S. goals, rather than actual agreements with the Chinese.

Left unresolved was whether the Chinese would pay a flat fee to show a movie or whether receipts would be shared with Hollywood, as demanded by the U.S. industry.

“I think we may have put an erroneous document on the Web site for a short period of time,” recalled a source close to the trade talks, which reached a chaotic peak during the U.S. visit of Chinese Premier Zhu Rongji in spring. “I remember we made an effort to put something up fast.”

In one sense, the movie debate reflects the common wish of an emerging nation to shelter its industries from a powerful foreign threat. But China’s autocratic rulers are concerned about much more than the finances of their shaky film industry. Depictions of history, such as the 1989 massacre in Tiananmen Square, or expressions of political values that run counter to those of China’s government, all may make officials cringe.

American studios took in less than $20 million in China last year, out of a total foreign box office approaching $7 billion, according to the MPAA. Separate U.S. government figures suggest that such revenues in China are among the tiniest in Asia--less than in Singapore, Malaysia, Thailand or the Philippines.

“The Chinese movie industry has been losing money year after year,” said Minxin Pei, a scholar at the Carnegie Endowment for International Peace who immigrated to the United States from China in the 1980s. “Political fears aside, the Chinese government worries that its movie industry will suffer the same fate as the movie industry in many other developing countries, that it would be wiped out.

“Of course,” he added, “they also worry about the ideological values contained in the movies made in Hollywood. It’s a mixture of both.”

As some see it, political concerns over entertainment content have a basis in recent history: Satellite and cable broadcasts of U.S. crime dramas on television may have raised public consciousness in China about a legal system that, until recent reforms, considered suspects guilty until proved innocent and in which silence was regarded as an admission of guilt.

China’s central government has not been able to control all the content that is broadcast by more than 2,000 television stations, which have exposed Chinese to depictions of U.S.-style arrests, replete with the “Miranda” warnings given to suspects.

“I would say that popular Western culture certainly contributed to that process of legal reform,” Pei said.

Earlier this year, U.S. and Chinese officials seemed on course to complete a sweeping trade deal, long before the World Trade Organization summit that is set for the end of November in Seattle. But the talks came to a halt after NATO’s accidental bombing of China’s embassy in Belgrade last May, and began a tentative resumption only last month, with much still left in question.

Until then, however, China had been prepared to offer other concessions sought by the film industry, U.S. officials have said, notably a three-year phase-in of foreigners’ rights to own, build, modernize and run movie theaters. Hollywood has sought a major overhaul of China’s creaky movie infrastructure as a key to developing the market. China still has just 1 movie screen per 122,000 people, Hollywood notes; the figure in this country is 1 screen per 8,600.

Under the U.S. movie industry’s own proposal, China would raise its informal limit of fewer than 10 U.S. movies a year to 17 next year and 25 in 2001, specifying that U.S. studios would share in the revenues. In return, Hollywood would increase its investments in Chinese studios and invest in state-of-the-art theaters.

“We just got stuck on the number of films,” said Valenti, noting that progress may have been made in other areas. “I think [the Chinese] don’t feel quite right about making that commitment.”

Whether or not China and the United States can resolve all their trade differences before the Seattle summit, movies are likely to remain a source of trade disputes elsewhere.

Just last week, Canadian leaders decided to push the World Trade Organization to reaffirm a nation’s right to protect its own “cultural” industries from imports, a proposal that is aimed at foreign movies, publishing and broadcast media. The European Union recently affirmed a similar aim.

The United States, meanwhile, is negotiating with South Korea, which has resisted allowing American movies into its theaters, which it reserves for domestically produced films for as many as 146 days a year.

Yet it may be that all the fuss will have a foreseeable finale. Some contend that disputes over film imports are destined to be made moot by technology, and that once the public can routinely download entertainment at home, government attempts to block movie imports will be futile.

“It won’t be long before quotas become unfeasible,” said Harvey Feigenbaum, a political scientist at George Washington University.