6 REASONS NOT TO BAN CHINESE MONEY IN HOLLYWOOD

6 REASONS NOT TO BAN CHINESE MONEY IN HOLLYWOOD

Recently Washington has ratcheted up the rhetoric on cracking down on China’s investment in Hollywood. Should the U.S. ban Chinese investment in Hollywood to pressure Beijing to deter North Korea’s nuclear missile program?  

1. CFIUS ISN’T A TOOL TO PUNISH CHINA

The article “Hollywood-China Relationship Faces More Pressure as Chuck Schumer Calls on Trump to Block All Deals” reported that in a letter to president Trump, Senate Minority leader Chuck Schumer urged “…the president should use his authority over the Committee on Foreign Investment in the United States, known as CFIUS, to hit Beijing with a suspension on ‘all mergers and acquisitions in the U.S. by Chinese entities.’”

CFIUS reviews foreign acquisitions of U.S. companies when national security is at risk – typically in the fields of aerospace or critical technology. CFIUS isn’t a political tool to pressure other nations to follow our geopolitical view.

2. BEIJING ALREADY PUTTING THE BREAKS ON M&A

Furthermore, we’ve seen Beijing has cracked down overseas mergers and acquisitions. According to the article, capital flight “…was seen as hurting China’s currency, the government has instituted various measures to make it more difficult for acquirers to shift capital overseas.”

3. CHINA’S FILM INDUSTRY IS ARTISTICALLY “ABYSMAL”

In the article “Don’t worry, Hollywood. China’s Not a Threat” it said “… it’s important to remember two things: China’s film industry remains abysmal artistically, and it has begun to flail financially.” The article pointed to China’s huge output of films (over 1,000 in 2016). But quantity and quality are two different things. And Chinese films – despite huge budgets and Chinese star power – still haven’t found major success in key international markets. China and Hollywood need each other.

4. CHINESE BOX OFFICE ISN’T SO METEORIC

China’s box office had an average yearly growth of 35% for over a decade. But in 2016 it was up only 3.7% according to the article: “China Box-Office Growth Slowed to 3.7 Percent in 2016, Official Data Shows” which stated that “Most industry observers converge around a combination of factors: weaker local films, a crackdown on box-office fraud, cutbacks in last year’s generous ticket subsidies from fast-growing online platforms, overall weakness in the Chinese economy and increased consumer discernment among China’s new moviegoers.” Hollywood needs to reach new audiences and China needs Hollywood films.

5. CHINA’S ACHILLES HEEL: CENSORSHIP

In my recent post – “4 Ways to Beat the Chinese Censors”  I detail the trouble censorship pushes on filmmakers (and how to work around it). Chinese censorship usually produces a water-downed version of the movie which hinders potential box office success. And Hollywood films are attracting huge fans in China. We need to keep the doors to China open.

6. HOLLYWOOD STARS ARE STILL NUMBER ONE

Finally, Hollywood films don’t cast Chinese stars in leading roles.  In the article “Why Everyone Should Embrace Chinese Cinema’s Rise” it stated that “…while Matt Damon was handed the lead role in Chinese co-produced blockbuster The Great Wall, popular Chinese actors Donnie Yen and Jiang Wen were only cast in supporting roles in Rogue One: A Star Wars Story.”

Granted that we see that blocking China money isn’t the answer – that nutter in North Korea Kim Jong-un seems spoiling for an ICBM missile showdown.

Should China should up their game? This could be a Faustian bargain. We get China to intervene and in return for what? The U.S. withdraws or reduces its military presence in South Korea and potentially other areas in Asia. If that happened – we might as well hand over America’s global influence and dominance to China.

What’s your view? Leave a reply in the comments.

 

 

 

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