Hollywood Looks For A Bigger Role In China

U.S. studios expected greater access to the mainland in 2018. Then the trade war erupted

- Jing Yang De Morel, With Anousha Sakoui And Danni Wu

This was supposed to be a big year for Hollywood in China. The five-year World Trade Organization film pact the U.S. and Beijing signed in 2012 was set to be renegotiated, holding out the promise that American studio productions would gain greater access to the world’s second-largest movie market. The industry had expected to see an increase in the number of U.S. films allowed, more access to key viewing windows such as summer, when China’s film authorities rarely allow foreign movies, and a higher share of box-office receipts.

Now it’s looking like Hollywood’s long-awaited payday in China could become collateral damage in the trade war brought on by President Trump’s tariffs. Not only have negotiations about widening access to the market stalled, but some in Hollywood also quietly worry that their films could be targeted in retaliation for tariffs the U.S. has identified for about $250 billion in imports from China. “The timing for this is inopportune,” says Chris Fenton, a trustee of the U.S.-Asia Institute and former president for U.S.-China film company DMG Entertainment. “In fact, the macro environment may be getting worse. It also could lead to the worst-case possibility of China backtracking on past agreements.”

Although it’s uncertain whether movies will end up on the lists of goods the U.S. or China have said might get slapped with new tariffs, the threat to American film exports is clear. Hollywood could be a victim should China choose “qualitative retaliation,” says Kenneth Jarrett, president of the American Chamber of Commerce in Shanghai. That could include a worsening of revenue-sharing terms for film deals. Or China’s film industry regulatory authority, recently shifted to a group within the Communist Party, could simply approve fewer U.S. films for import or limit their runs to low- season periods.