The Oscar for movie theater admissions goes to China. According to data released by the Motion Picture Association of America, whose members hold a global monopoly over the film industry, China’s box office revenues increased by 35% in 2011. Although it fell by 4% in the United States, global box office income rose 3% last year to $32,6 billion (US), thanks to China and other foreign markets. The steady decline in US box office revenue is coupled in recent years with a spectacular drop in DVD sales, once the film industry’s biggest moneymaker. At the same time, China’s passion for cinema has taken off; three new screens are inaugurated every day, and 75 new Imax screens are built each year. In the next ten years, China will become the film industry’s biggest market. Based on this promising forecast, last October the private equity firm Carlyle Group bought 80% of Hong Kong’s GDC Technology, which commands more than half of China’s film digitization equipment market, an essential technology in a country where almost all movie theaters are of recent construction and use cutting edge projection systems.
As the pendulum swings across the Pacific, Beijing has decided to open China’s market to an increased number of imported films, nearly all of them American. The current quota is for only 20 films, but the new proposal allows for another 14 “premium format” features such as 3D or IMAX, raising the total to 34. This loosening of restrictions comes after the WTO criticized China for being too closed to intellectual products and services. US television is already very popular in China, and the raising of the quota is an important victory for political negotiations aimed at strengthening one of the United States’ major export industries.
The opening to Hollywood exports is not limited to just the finished product. DreamWorks Animation has announced a joint venture in which it will hold 45% ownership along with three Chinese state-owned companies: China Media Capital, Shanghai Media Group, and Shanghai Alliance Investment. The new company, called Oriental DreamWorks, will be based in Shanghai, where it plans to build modern production studios. Producing content for the domestic Chinese market, Oriental DreamWorks plans to release its first 3D movie by 2016. Lauded by the California-based film industry, the announcement was made following the recent trip to the USA by Xi Jin Ping, heir to the helm of China, where he met with several major film studio presidents. A success for China as well, the films and programs released by the new production company will promote Chinese history and civilization.
The relationship is complex and far reaching. The United States, the world’s biggest exporter of blockbusters, finds an eager partnership in China, a country seeking to improve its soft power, while Beijing acquires modern technologies to promote its good image and culture. To make it happen, China flexed its muscles and showed its strength in numbers: the new spending capacity of its people and their desire for the fun and carefree escape from reality offered by the magic of the silver screen. The making of dreams is an industry, and in China it is not necessarily an American one.