17 Sep 021: Getting Money Out of China
John McKay, CEO of POW Studios talks about the culture clash between East and West and the challenge of getting money out of China.
John compares Hollywood’s linear vs China’s circular way of doing business. Consequently, John also tells how he stays one step ahead of contract disputes to get money out of China.
3 Key Points
LINEAR vs CIRCULAR THINKING
John mentioned Westerners tend to solve a problem in a linear fashion. We go from point A to Point B. Chinese work in a more circular fashion. They work around the problem and worry it away. Obviously, this is especially true with deadlines. John said he is wary of Chinese time frames. A lot of unexpected things happen towards the back end of production. Everything comes in a flurry. He got used to it and factors that in. See my podcast 010: Melanie Ansley: Dealing with the Unexpected in China Film.
THE MONEY PROBLEM – GETTING YOUR MONEY OUT OF CHINA
Getting money out of China is a problem. The Chinese government is making it hard for Chinese companies to work with foreign companies. His solution is to factor in extra time.
JURISDICTION REGARDING MONEY OUT OF CHINA
However, John says it doesn’t matter if you make the contract jurisdiction outside of China because it won’t work. He even thinks Hong Kong isn’t a great alternative jurisdiction-wise.
He solves this by staying one step ahead in financing terms and staying in sync with what’s happening. You can also check out 07: Partner Sky Moore: North Korea & the Trump Effect on Co-Pros. Here he talks about capital flight and the issues of getting money out of China.
TAKEAWAYS
KNOW YOUR CHINESE FINANCING PARTNER
Not to mention, John said the Chinese film market was a bit like the Wild West in that everything is up for grabs. So you need to tread carefully and find people with experience (and in my opinion – not just money) who know what they’re doing.
PLAYING CATCH UP – WESTERN STANDARDS, MONEY OUT OF CHINA
Additionally, John mentioned one reason Chinese companies take on foreign partners – is the foreign partner’s quality of work is better than what they can get in China. Therefore, Westerners have a potential market in China. This means more box office for US companies. Later I asked how long until China catches up with Western production standards. John replied probably within a decade. In the past, China’s rote learning education system didn’t foster creativity. But China is changing fast and that makes it fascinating to work with.
DEAL OVER DRINKS – ARE WOMEN INVITED TOO?
Lastly, John mentioned most Chinese deals are done over drinks. The Chinese want to get to know you and this is the preferred way to cultivate business partners. I didn’t think about this until after our interview but I asked John in an email later.
However, if you were a woman – do you think your potential Chinese partners would have invited you for a drink to discuss a deal? If not – what can Western women do to not be shut out of potential deals?
I’ll reprint his reply. John said: “Yes, I think maybe with the older generation your question regarding women and deals might be an issue. But the younger generation who tend to lead negotiations as the older generation doesn’t speak English is changing the gender “hierarchy”. Many are very intelligent, highly competent young women. So, in time I see this changing but could be an issue now.”
The Asia-Hollywood Greenlight Podcast – Episode 21
John McKay, CEO POW Studios, New Zealand Post Production Studio
Show Notes
Host: Caryn McCann
Website: https://chinahollywoodgreenlight.com/podcasts-2/
Sister website: https://christmasmoviescreenwriter.com/
Facebook: https://www.facebook.com/AHGreenLight
Twitter: @AHGreenLight https://twitter.com/AHGreenLight
LinkedIn: https://www.linkedin.com/in/caryn-mccann-5718058/
GUEST: John McKay
Website: https://powpost.co.nz
Facebook: http://www.facebook.com/powstudiosnz
Instagram: https://www.instagram.com/powstudios/
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