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What’s really driving China’s ambition to buy out Hollywood and win the World Cup?

Recent investments in entertainment interests are as much about muscle-flexing at home and abroad as they are about ‘rebalancing’ the economy

PUBLISHED : Thursday, 24 March, 2016, 9:39am
UPDATED : Thursday, 24 March, 2016, 9:53am

The globalisation of the film industry is going to mean that “you can’t tell whether it’s a Chinese film or a Hollywood film any more.” That was according to Warner Bros’ CEO and Chairman Kevin Tsujihara last week as he heralded Sino-American co-productions now in the pipeline at Flagship Entertainment, a joint venture involving WB, Hong Kong broadcaster TVB and China Media Capital, the Chinese state-backed investment firm.

It prompts the question; do you want to watch films that offer nothing in the way of cultural specificity? You don’t? Well, that’s simply inconvenient. Chinese tycoons, in league with enthusiastic American partners, have their sights on establishing new global entertainment empires capable of capturing box office gravy in both East and West alike, and they want your money.

There’s nothing new about people in the entertainment business trying to maximise profits, you might protest, and you’d be right. What’s grating is the subtle suggestion this coming together of cash, talent and storytelling – One Script, One Road, if you like – is just one big exercise in global cuddliness.

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There have been other deals. Perfect World Pictures last month announced a co-financing partnership with Universal Pictures. Hunan TV is sinking US$1.5 billion into Lionsgate. Huayi Brothers and Fosun International are also investing heavily in American movie ventures. Moreover, the purchase in January of Legendary Pictures (Godzilla, Jurassic World) by the world’s biggest cinema chain operator (and China’s biggest private property developer), Wanda Group, for US$3.5 billion, has been branded “China’s largest-ever cultural takeover.”

U.S. anti-trust laws – look up the Paramount Decrees – are supposed to prohibit ownership of both movies and theatres. Wanda already owned AMC Entertainment, America’s second-biggest theatre chain. Why has nothing been made of this? Cynics might say it’s because the Yanks really, really want direct access to China’s booming box office, which is forecast to outstrip their own in the next couple of years. In that mission, however, they are also likely to find themselves dancing to the tune of the Chinese State Administration of Radio, Film and Television (SARFT), a body whose latest set of rules, targeted at TV producers, amounts to a laundry list of prohibitions, including bans on content that is “to the detriment of national image [or] endangers national unity and social stability”, “exaggerates social problems, displays excess, or shows the dark side of society”, “sets a negative character as a main character”, or “breaks with national sentiment”.

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It is inconceivable that the propaganda risks and opportunities associated with inviting Hollywood into the Chinese multiplex have not been weighed by Beijing. Equally unlikely is that Xi Jinping himself has not had a hand in urging Hollywood-bound cash outflows. Establishing a modern consumer society in China that bears at least some of the hallmarks of America’s is a recurring theme of his leadership. One need only consider cinema’s counterpart on Xi’s two-pronged fork of consumerist expansionism to forget the notion that this is entirely about “rebalancing” the economy, however.

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That other prong is sport – or, more specifically, football (the proper variety, not the American version). Led by Li Ruigang, a man dubbed “China’s Rupert Murdoch”, in November the very same China Media Capital paid 8 billion yuan (HK$9.5 billion) for the broadcast rights to the Chinese Super League for the next five years. For their part, meanwhile, Wanda last year not only took a 20 per cent stake in the Spanish football club Atletico Madrid but paid US$1.2 billion for the Swiss-based sports marketing company Infront Sports & Media, a company that holds the exclusive sales rights to broadcast Fifa events from 2015 to 2022, including the 2018 and 2022 World Cups.

Until very recently, global interest in the CSL was trace to non-existent. As reported diligently by the Post’s James Porteous, it has increased somewhat in 2016 as Chinese clubs have taken to offering players double what they’re earning in Europe in a frenzied spree of spending fuelled by that injection of cash from CMC – who are evidently betting on a huge increase in demand for domestic football content and increased interest in the game generally.

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To that end, China plans to have 20,000 designated football schools by 2017, raising participation to unprecedented levels. Professing himself a fan of the game, Xi has also made it known he wants China to host a World Cup and ultimately to win one. To be clear, then, the objective is to become a global power in the world’s most popular sport.

In his book Civilisation: The West and the Rest, Niall Ferguson wrote about China trying to replicate the West’s historical va va voom in pursuit of prosperity, or “downloading its best apps”: competition, science, the rule of law, modern medicine, the Protestant work ethic and consumerism. The evidence suggests China has a few problems with its version of the third-mentioned, but in terms of consumerism, well, blockbuster movies and football as drivers of economic growth would seem like straightforward rips.

Chinese deal for Hollywood studio opens door to China film market

Only nothing’s as straightforward as Xi might wish. Just as Western moviegoers are likely to vote with their feet and stay away from the kind of films that adhere to SARFT’s worldview, Chinese football isn’t about to become exportable any time soon, and it’s far from certain that the subscription base needed to make the numbers add up domestically will materialise.

Matthew Syed recently argued in The Times that Xi’s backing for football is about political indoctrination and control, that it is characterised by “top-down planning and the use of vast (unaccounted for) resources.”

It is certainly true China’s leadership is facing multiple headwinds: slowing economic growth, shrinking employment, crashing markets, a growing suspicion that serious financial, economic and social problems are being papered over. And indeed, building up the nation’s leisure-industrial complex might be viewed, by the Marxist and the capitalist alike, as a useful expedient via which citizens / consumers can keep themselves (and not the streets) occupied. The official narrative is that buying Hollywood in order to censor it and demanding domination of a sport at which you are currently useless speaks of cultural confidence. It could just as easily be read as stemming from profound insecurity.