[Analytics] The future of Hollywood–China relations after the pandemic

This file photo shows people watching a movie at a cinema in Wanda Group's Oriental Movie Metropolis in Qingdao, China's Shandong province. (AFP Photo). Sketched by the Pan Pacific Agency.

Though film industries are market-based and profit-driven, they cannot escape the constraints of the political structures, ideology, or cultural value systems in which they are situated. Nor can they be removed from diplomatic relations and geopolitics. So, as US–China relations reach their iciest point in decades, Hollywood and ‘Chinawood’ are caught in the middle. Wendy Su specially for the East Asia Forum.

The Hollywood–China relationship has alternated between a competitive and collaborative dynamic over the last four decades. In the 1990s, Hollywood’s near monopoly of the Chinese film market caused a crisis in China’s domestic film industry. Renowned art house filmmakers, such as Zhang Yimou and Chen Kaige, decided to take Hollywood’s approach and began producing commercially viable genre films. This resulted in domestic Chinese films generating record high box office revenues.

By the early 2000s, China had used Hollywood resources to modernise its film industry. Up to mid-2017, the partnership entered an unprecedented honeymoon period, marked by a reverse flow of inpouring Chinese capital, the acquisition of Hollywood studio shares and a record-high number of film co-productions. This trend culminated in the first half of 2017 when Chinese capital funded 25 per cent of Hollywood exports to China.

But 2017 marked a turning point in the Hollywood–China relationship. Amid the Trump administration’s trade war and Republican politicians’ heavy criticism of Hollywood’s ‘kowtowing’ to Beijing, films and co-productions, such as Disney’s 2020 remake of Mulan, fell prey to politics. The COVID-19 pandemic further devastated US–China relations and brought the fear of a possible all-around de-coupling between the two countries.

Beyond politics, the Chinese audience’s taste has also changed. China surpassed the United States to become the world’s biggest movie box office in 2020. Imported movies now account for only about a sixth of China’s total box office — a nearly 55 per cent decrease year-on-year — with China’s homemade movies outperforming Hollywood imports like The Tenet, Wonder Woman 1984 and Mulan. An executive at one of Beijing’s leading distributors claims that ‘the whole culture has changed’.

Pessimists begin to wonder about a future of a Hollywood without China, or a China without Hollywood.

Hollywood is facing its biggest challenge since it re-entered China in 1994. Chinese audiences are no longer as fascinated by Hollywood films as they were 20 years ago and are increasingly embracing homegrown movies. China’s rising status on the international stage and the changing global balance of power have played a major role in this shift — reinforced by China’s successful containment of the COVID-19 pandemic and swift economic recovery.

When revenue-sharing Hollywood movies first re-entered mainland China, they were enthusiastically embraced by a Chinese audience longing for reform and modernity. Hollywood films were emblematic of the US way of life and an idealistic liberal democratic society. The status that Hollywood films enjoyed in China was closely related to the status of the United States as ‘a city on the hill’ and a beacon of democracy.

But after 25 years of immersion, the Chinese audience is no longer obsessed with repetitive blockbusters. The failure of the United States to control the pandemic has also greatly disillusioned the Chinese audience, shattering their pre-existing good faith in the US system. At the same time, their obsession with US movies, culture and values has diminished.

What will the future hold for the Hollywood–China relationship?

Hollywood will still have a place in China. The major reason lies in the basic nature of the film industry as a market-based and profit-driven business. Politicians come and go, geopolitics intervenes and withdraws, but audiences are here to stay. The market logic ultimately rules and serves as the foundation that sustains the Hollywood–China partnership.

The special effects and entertaining value of Hollywood movies also provide unmatchable visual pleasure and psychological catharsis for hard-working Chinese audiences, especially Chinese youth trapped in the real world’s life struggles.

The latest market success of Fast and Furious 9, Godzilla vs Kong, the nostalgic re-release of old Hollywood imports Avatar and Lord of the Rings, and the Chinese audience’s enthusiastic viewing of Friends: The Reunion testify to the lingering influence and glamour of Hollywood movies in China. If China further loosens its censorship and produces a varied range of movies tapping local sensitivities — like Bollywood and the Korean Wave have achieved — the time may come for the looming crisis of Hollywood in China.

Looking ahead, a key challenge will be to manage the current bilateral tensions that may create barriers for Chinese capital entering the US market and co-productions. China’s current ban of Oscar-award winner Chloe Zhao’s Nomadland is also sending a negative signal to overseas filmmakers. They are discouraged from seeking collaboration with China or expecting box office success in a market which is vulnerable to tides of nationalism and geopolitical tensions.

Wendy Su is Associate Professor at the Media and Cultural Studies Faculty, University of California, Riverside.

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