Hollywood’s China woes: New law limits US cooperation on projects tweaked to please Beijing

Outrage over a Chinese spy balloon that flew over U.S. airspace has further cooled D.C.-Beijing tensions, but the entertainment industry has already been swept up in the heightened atmosphere of American hegemony.

Hollywood studios and producers are bracing for a new level of scrutiny over their dealings with China — reflecting a bipartisan hardline toward Beijing and increasing concerns about its influence.

A little-publicized provision in the recently passed defense bill prevents the US government from spending funds on movies that are altered to enter the Chinese market, at the behest of the Chinese government.

Provisions in the National Defense Authorization Act, approved by a bipartisan vote in Congress and signed by President Joe Biden in December, are the latest example of an increased focus on China’s role not only in the entertainment industry, but also in sports and social media. .

While Republicans have led the attack on Hollywood, particularly for changes to big blockbusters, Democrats have recently joined in, as the establishment of a new China Select Committee in the House of Representatives received bipartisan support.

The NDAA provision prohibits the U.S. government from spending defense funds to support projects that seek “pre-approval of the content” of a project from the Chinese government, or that “alter or delete the content of the project in any way” by the Chinese government or any entity of its Communist Party. instructions.”

The Motion Picture Association is seeing that the Department of Defense develops actual policy guidelines for military cooperation. There is a long tradition of US government support for film and TV projects, including the most recent Top Gun: MaverickUsually in the form of military equipment and technical advice.

While the number of US releases in China has been declining in recent years, and the actual number of movies seeking Defense Department cooperation is low, there are studio concerns that the provision will only lead to further declines in exports. And some in the industry see the provision as symbolic, another way to target left-leaning Hollywood in the culture wars.

“It’s a very silly political statement that has no real-world application,” said Schuyler Moore, a corporate and entertainment finance attorney at Greenberg Glusker in Los Angeles.

It has long been common practice for studios and producers to edit projects to accommodate cultural sensibilities in different marketplaces — not just in China, but in other countries as well. US lawmakers, particularly on the right, seized on instances of film alteration or self-censorship as a way to appease Beijing government censors.

In 2019, the trailer for Top Gun: Maverick Tom Cruise’s character wearing a bomber jacket with two patches of flags for Taiwan and Japan has been replaced with other symbols. The flags were finally restored when the film was released last year, though not in China.

The incident was cited by Sen. Ted Cruz (R-TX) as he introduced legislation in 2020 to condition the US government from providing technical or other assistance to projects that do not agree to change content “in response” or “in anticipation” of the Chinese government. or a request from the Communist Party.

Changing the spotlight on Hollywood movies for China has become a hot topic, with then-Secretary of State Mike Pompeo and then-Attorney General William Barr blasting Hollywood’s China practices in speeches in the summer of 2020. The impact of Covid, Bar quoted the report as saying World War Z, published in 2013, deleted references to a virus originating in China “in hopes of landing a Chinese distribution deal”. That agreement was never implemented. He mentioned Marvel Studios The doctor is strangeIn which he claimed that the filmmakers changed the nationality of one of the main characters from a Tibetan monk to a Celtic one.

“This is a massive propaganda coup for the Chinese Communist Party,” Barr said. “The story of the film industry’s submission to the CCP is a familiar one.”

But even those with extensive experience trying to tap the Chinese marketplace see the attack on the industry as little more than election-year rhetoric.

Chris Fenton, former president of DMG Entertainment Motion Picture Group and GM of DMG North America, said the situation in China is about more than just modifying films for that country’s market.

“Where it’s inexcusable is where Beijing pressures us to do it for the rest of the world,” he said.

its author Feeding the Dragon: Inside the Trillion Dollar Dilemma Facing Hollywood, the NBA, and American Business, Fenton said CEOs and other top executives face pressure from shareholders and investors to miss out on one of the world’s top markets. But he warned of a situation where “we start censoring ourselves, banning stories, buying scripts or hiring people we think Beijing doesn’t like.”

“The problem is that there’s no free market capitalism if you don’t protect the foundation of the nation you’re protecting,” he said.

Since 2020, animosity toward China has intensified, crossing party lines, as evidenced by House Speaker Nancy Pelosi’s surprise trip to Taiwan last year.

Cruz’s proposed legislation, called the SCRIPTS Act, did not advance, nor was a new version passed in the last Congress. But despite lobbying against the MPA, the idea of ​​the law found its way into the NDAA. In the back-and-forth negotiations over massive spending bills, it’s a common tactic to include provisions that haven’t advanced as stand-alone legislation yet aren’t enough of a dealbreaker for lawmakers to withhold their support.

Moreover, the NDAA singles out industries other than entertainment, including a high-profile provision to restrict US government funds from being used to buy products that include Chinese semiconductors. A separate end-of-year public spending bill includes a ban on TikTok on government devices.

Last month, the House, in an overwhelming bipartisan vote, created a Select Committee on Competition between the United States and China. Its chairman, Rep. Mike Gallagher (R-WI), soon made it clear that the entertainment industry would be the subject of the hearing, as he said he wanted Bob Iger of the Walt Disney Company to testify, as well as representatives of technology and NBA commissioner Adam Silver on the country’s business dealings.

“Consider that I’m giving them a preliminary warning order that they have to testify before the committee,” Gallagher told radio host Hugh Hewitt.

In a statement to Deadline, Cruz said he expects the Biden administration to “faithfully” implement the China-Hollywood provision of the NDAA.

“The language is designed to counter China’s campaign to control what Americans hear, see and ultimately think,” he said. “Under this provision, Hollywood studios that want to work with the government — things like using military locations or resources for filming — must keep CCP off the set and out of the editing room.”

There are questions, and doubts, about how the provision will be carried out in practice, or even how effective it will be.

The NDAA provision “is not surprising, of course, since what Democrats and Republicans seem to agree on these days is that China is evil and must stay,” said USC professor and China expert Stanley Rosen.

He said that “we can expect more such insertions about China in bills essential to US security, and there will be no vote to remove such insertions. That said, it will be very difficult to monitor because Hollywood seeks ‘pre-approval’ from China.” Moreover, they don’t need to ask any government or party organization because they have representatives on the ground who can do it for them.”

The only thing Democrats and Republicans seem to agree on these days is that China is evil and must exist.

USC professor and China expert Stanley Rosen

He also noted Hollywood’s romance that China “isn’t what it used to be,” as studios greenlight films and global return projects in the absence of the Chinese market.

He said that “this appears to be standard rhetoric with no enforcement potential; however, given the trajectory of US-China relations, more enforceable strictures are likely to come. If anything, it may also be an attempt to intimidate Hollywood, perhaps into refusing Chinese financing.” Even from private companies like Alibaba and Wanda.

Only 15 US films were allowed in China last year, by Deadline’s count, as the country moves toward its own homegrown titles. That’s down from 2021 and down from 2019, when there were more than 30 releases. Given the government’s opaque policies, producers hoping for a release in China take a bit of a gamble if they rely on returns there as part of their revenue projections. Film quotas and revenue sharing limits have long been a source of frustration. And the studios are probably a little more aware of the PR disaster that awaits if they give in to some of the more serious demands. Last year, according to a report by Puck, the producers refused to remove the Statue of Liberty from Sony. Spider-Man: No Way Home. Imagine if the studio did that.

Nigel Corey, associate director of trade policy at the Information Technology and Innovation Foundation, argued in a 2020 report that the effect of efforts like Cruise’s law should actually strengthen China’s film industry.

Corey said the Cruz Act “targets a legitimate concern — China’s extraterritorial enforcement of censorship — but it misses the mark by hitting American filmmakers rather than Chinese censors.”

“China sees the film industry as a strategic industry of the future, not just for export earnings, but for the opportunity to export the worldview of the Chinese Communist Party,” he wrote via email. “Limiting US movie exports through the SCRIPTS Act only accelerates the process by which China gains global market share at America’s expense.”

He also has doubts about how the Defense Department will implement the NDAA, how they will decide what degree of contact with the Chinese government would be a “deal breaker,” and what kind of evidence they will require. Furthermore, the military already has the discretion to choose whether to cooperate on a project.

Robert O’Brien, President Donald Trump’s former national security adviser, argued against the provision as the NDAA was making its way through Congress last fall. He argued in one option that the provision would be an unintended “own goal” in US competition with the Chinese Communist Party. “The concerns about the CCP’s propaganda machine are real and I have spoken about them at length,” he wrote. “But rather than risk ending the relationship between DOD and Hollywood, we should fight the CCP directly.” Instead, he said US immigration authorities should ban foreign agents of Chinese citizens who seek to censor propaganda or US films, and impose sanctions.

A DoD spokeswoman did not return requests for comment.

Fenton said a blanket policy is needed that defines the boundaries of engagement with China, “so that when I do the right thing I’m not just replaced by someone who does the wrong thing.”

Meanwhile, Fenton sees the end of the practice of “bending over backwards” to enter the Chinese market. “Quoting Beijing no longer seems to warrant a return from China anyway,” he said. “Worse, the rest of the world can punish you for a studio that brazenly tries to please the authorities by stifling the creative freedom of filmmakers and amplifies Beijing’s narrative—a no-win situation, really.”

Nancy Tartaglione contributed to this report.