Hollywood and the great wall

ON JUNE 9, after “The Da Vinci Code” had earned more than $13 million over 22 days on nearly 400 screens across China, the communist government suddenly and unexpectedly ordered the removal of Sony Pictures’ thriller from all theaters nationwide.

Chinese film officials publicly and privately offered a variety of reasons for their decision. According to one explanation, it was a concession to Chinese Catholic groups, which had been calling for a boycott since mid-May, warning that the film could cause social unrest. Another suggested that it was a commercial decision based on declining ticket sales.

Or perhaps it was a political decision to prevent the still-popular international blockbuster from competing with domestic films, including propaganda such as “The Long March,” produced to celebrate the 85th anniversary of the founding of the Chinese Communist Party. Or it was a routine administrative decision because June 10 marked the beginning of “local film protection month,” a 2002 protectionist measure stipulating that no foreign film can be released during certain “blackout periods.”

Although the removal action was clearly unusual -- in the past, successful imports have been allowed to finish their theatrical runs even after the beginning of “protection month” -- Chinese governmental intervention into the film market has been a recurring feature ever since the first major Hollywood import, Warner Bros.’ “The Fugitive,” opened amid great fanfare in six Chinese cities on Nov. 12, 1994.

Hollywood was invited into China only as a last resort to rescue an ailing Chinese box office in which attendance had dropped from 21 billion in 1982 to under 4.5 billion in 1991. In 1993 alone, the box office grosses declined by 35%. Enter Harrison Ford.

After playing to packed houses in its first week, “The Fugitive” was suddenly withdrawn amid a variety of official and unofficial explanations. One newspaper reported that some film industry bureaucrats, perhaps surprised by the film’s success, worried that it would pave the way for foreign distributors to “invade” China’s film market.

In a turf war over control of the film’s profits -- then as now, Hollywood studios get only 13% of the box office under revenue-sharing arrangements with China -- a local distributor, which lost out to the better-connected, national China Film Import and Export Corp., took the fight to the Central Propaganda Department, saying the film violated Chinese political mores, making it the equivalent of “using socialist money to fatten the capitalist pig.”

By the time the issue was resolved and “The Fugitive” returned to theaters six weeks later, there were pirated copies everywhere and the movie had been shown on three cable television stations in southern China.

Although blatant ideological appeals in defense of socialism and against the encroachment of Western capitalist products are no longer common, government intrusion still plays an important role in China’s relationship with the foreign film industry.The intrusion includes limiting the number of foreign-film releases allowed -- currently set, under agreement with the World Trade Organization, at 20 films, of which 16 last year came from Hollywood -- and complicated procedures to win approval from Chinese censors.

One of the most opaque cinema regulations is the “blackout period” on foreign films, imposed not only during the summer but around public holidays or any other time film officials deem it necessary.

In the summer of 2004, the China Film Bureau said one blackout was meant to reduce the amount of sex and violence being shown to young people. Knowledgeable observers, however, noted that the ban conveniently coincided with the release of Zhang Yimou’s “House of Flying Daggers,” a film the authorities were promoting heavily.

Indeed, whenever a high-profile domestic film is set to begin its run, all competitors, including other Chinese offerings, are generally cleared from theaters. Thus, Chen Kaige’s “The Promise” opened in December 2005 on 470 screens, with nary a competitor in sight. This reflects the government’s increasing desire to promote Chinese blockbusters not only domestically but in competition with Hollywood in the world market.

Chinese officials also have been sensitive to the country’s treatment on screen. Thus, in 1997, the studios behind “Seven Years in Tibet” (Columbia Tristar), “Red Corner” (MGM) and “Kundun” (Disney) were banned from China indefinitely because of their alleged “anti-China bias” despite the fact that none of the offending films were ever intended to be shown there. The studios went to elaborate lengths -- sending the likes of Henry Kissinger and Michael Eisner, for example -- to persuade Chinese officials of their good intentions, and they eventually got the bans rescinded.

And American films were banned for six months in 1999 after NATO bombed the Chinese Embassy in Belgrade, Yugoslavia, despite the substantial economic losses to the Chinese theater industry, which at the time was more heavily dependent on Hollywood products than it is today.

More recently, the showing of “Memoirs of a Geisha,” which had been approved in November 2005 and scheduled for distribution on Feb. 9 of this year, was canceled at the last minute amid fears that the public would be outraged at the sight of Chinese actresses playing Japanese geishas. “Mission: Impossible III,” which in early May opened internationally in more than 50 countries with about 9,500 prints -- Paramount’s biggest-ever release -- was “postponed” in China because Shanghai authorities were unhappy with the way their metropolis was depicted in the film. Of course, copies of both “Memoirs” and “M:I III” are widely available on the streets for under $1.

Given such frustrations, why does Hollywood persist in its China venture, especially when the total box office for all Hollywood films in China in 2004 was only about $60 million (or about what “Cars” made on its opening weekend in North America)? A number of reasons have been advanced.

First, with the rapid expansion of the economy and the rise of a middle class with disposable income, the vast potential of the Chinese market continues to beckon.

Second, Hollywood studios view China as an increasingly participatory stakeholder in the international system, one that, given time, will begin to follow the rules.

Third, with the construction of many new state-of-the-art theaters in China, there is the expectation that blackout periods will become less justifiable; eventually there will be sufficient venues for both domestic and Hollywood films.

Fourth, a number of studios have begun to pursue co-productions with Chinese partners as a means of gaining greater market access and avoiding the restrictions that afflict standard Hollywood releases.

Finally, most of the major American players in China’s film business do not view the Chinese market primarily in terms of the exhibition of theatrical films. Their interests are far broader, including theme parks, infrastructural development and the provision of technological expertise.

Thus, the current blip over “The Da Vinci Code” is likely to have little effect on Hollywood’s pursuit of its China dream.