the fate of popular cinema is a good indication of the fate of chinese cinemamore generally.only about 30，000ballots were reportedly collected for the "22ndone hundred flowers film awards"in 1999，including both the printed and web-basedvoting outlets.（29）indeed ，one chinese source reported that only 20，000ballots were cast in 1996.（30）circulation for an average issue as of 1998was308，333，still making it one of china's leading periodicals ，but this is afar cry from its previous prominence.（31）indeed ，according to interviewees，its relatively low cost ，large institutional subscription base，and name recognitionhave kept it afloat ，albeit under increasing pressure to adjust to new marketconditions.
undoubtedly hollywood's greatest success in china ，as it was virtually everywhere，was the performance of "titanic"at the box office.as table 1makes clear，thesuccess of "titanic"has dwarfed all other films in china ，imported or domestic.its box office of 359.5million yuan is more than triple the second most successfulfilm，"true lies ，"which brought in 102million yuan.this success has been reflectedin surveys on audience preferences.one survey，for example，asked 1，500residents18years old and above in beijing ，shanghai and guangzhou to list their favoriteimported film."titanic"was chosen by 35percent."true lies"came in second ，albeit with only 1.6percent.no other imported film scored higher than 0.7percent.indeed，when respondents were asked in the survey to choose their favorite domesticfilm，none reached the level of 6percent.（32）the success of "titanic"andits potential lessons for chinese films was also a frequent topic for discussionin chinese film journals.（33）
“the wolf at the door”:hollywood and the film market in china from 1994-2000(ⅱ)
——chapter prepared for eric j.heikkila and rafael pizarro ，eds.，southerncalifornia in the world and the world in southern california（greenwood publishinggroup ，forthcoming）
stanley rosen
hollywood's continuing frustrations
the roots of hollywood's current disappointment with the film market in chinacan be found in the （recent）past ，the present and the（imagined）future.thereis frustration with the gap between what executives feel could be and what is ；with the continuing uncertainties of doing business in an environment in which therule of law is still in its early stages and law（including the "law"of the market）is often superseded by political and cultural considerations；and by unhappy experiencesin which american films have been banned or in other heavy-handed ways preventedfrom succeeding in the marketplace.some of the constraints have been based on generaladministrative regulations or bureaucratic infighting ，as was noted above in discussingthe fate of "the fugitive"；others have stemmed from specific political decisionsrelated to the larger issue of sino-american relations.while hollywood has understandablydevoted its efforts to persuading china to alter its restrictive regulations -oftenindirectly by lobbying the u.s.government to include its demands in trade packages-the chinese government has demonstrated forcefully，on several occasions ，thatchairman mao's familiar dictum that "politics takes command"（zhengzhi guashuai ）still remains relevant on selective occasions.we will begin with the formal andinformal administrative constraints that mark china's policy toward the film industryand hollywood's efforts to ease such constraints.following that we will turn tospecific examples of governmental intervention in the film market for imported films.the most important cases have been the ban on three leading american studios in1997after each released an "anti-china"film ，and the ban on the showing of anyamerican films following the bombing of the chinese embassy in belgrade in may 1999.but perhaps the most revealing case concerns disney's "mulan，"which the studiofelt was ideal for the chinese market.the reception of "mulan"in china is worthyof more detailed discussion since its lack of success at the box office and latervilification in the press is closely related to the themes addressed in this chapter.among other problems，"mulan"offers an example of the importance of timing；thefilm fell victim to both the 1997ban and the outrage that accompanied the 1999bombing.however，a full discussion of the "mulan"case requires a separate article.
administrative constraints
the importance of the china market to the american film industry was clearlydemonstrated during the congressional debate over granting china permanent normaltrade relations （pntr）。WWW.11665.cOmas that debate was reaching a climax in the first halfof 2000，the film industry brought out its biggest guns.a new lobbying groupcalled the china trade relations committee was established and included the topexecutives from the seven major american film studios.coordinated by mpa ceo jackvalenti -who had traveled to china numerous times in an effort to pry open themarket -the committee included ceos and other top officials from disney（michaeleisner），mgm（alex yemenidjian），sony （john calley ），universal（edgar bronfman，lew wasserman and ron meyer ），warner brothers（gerald levin and barry meyer），viacom/paramount（sumner redstone ），and twentieth century fox（rupert murdoch）。（34）what was most striking ，however，was the massive effort undertaken fora market that annually accounts for about $20million ，roughly the size of thereturn from peru，and less than a studio might take in on one modest film in theu.s.to further put this figure into perspective，mpa statistics reveal that thetotal foreign box office for american films in 1998was close to $7billion.inaddition，u.s.government figures suggest that film revenues from china are amongthe smallest in asia，less than in singapore ，malaysia ，thailand or the philippines.（35）
the explanation for such seemingly puzzling behavior，of course，can be foundin the oft-repeated mantra that china is the largest，potentially most lucrativemarket in the world ，and normalizing trade relations is critical to developingit.as one prominent china specialist put it，in supporting hollywood's effort ，"it's a necessary step，a historical step along a protracted ，tortuous path thatwill have many setbacks.but it's better to be on this path than not be on it."（36）what ，then ，is hollywood's plan for developing this market and how hasthe recent pntr/wto trade agreement furthered these aspirations ？before addressingthese questions ，it is useful to list some of the market entry barriers that hollywoodfeels has restricted its success.among the most important are the following：（1）the monopoly over imported films exercised by the china film corporation；（2）the prohibition hollywood studios face in distributing their films directly；（3）restrictions on foreign investment in the film industry；（4）the informalquota that limits the number of imported films each year；（5）the structure ofthe taxation/import duty regulations that imposes a variety of fees and taxes onimported films；（6）censorship.（37）
some of these obstacles are more easily negotiable than others and the tradeagreement has provided the studios some limited success in several areas，particularlywith regard to quotas and investment.first ，hollywood has sought to increasethe informal quota on imported films from the current ten per year to as many asthe market will bear.as table 1revealed ，the largest number of imported hollywoodfilms in any year thus far has been nine，although that number will likely be exceededby the end of 2000.second，hollywood would like to invest millions of dollarsin cinema construction，particularly the building of modern multiplexes.（38）perhaps the most important chinese concession is an increase in the number of filmschina will allow under the current revenue-sharing agreement from ten to twenty.again ，to put this figure into some perspective ，it should be noted that thisnumber includes movies from all countries outside china ，including hong kong，and that the number of films released into theaters each year in the u.s.by studiosand independent film companies is around 500.in the initial negotiations hollywoodhad sought a quota closer to 40films a year.a second concession allows foreigncompanies to own 49percent of chinese cinemas.this was an important issue forhollywood executives since it is believed that the construction of additional cinemaswill eventually create pressure on china to let in more foreign films.currentlythere is one movie theater for every 122，000chinese ，compared with one for every8，600americans.however，even assuming that such expectations are met ，americaninvestors will still be subject to decisions made by the majority partner ，a governmentagency.and ，as was noted above ，economic results are still considered subordinateto social effect and the basic task of the film industry remains the building ofa socialist spiritual civilization.
perhaps equally important ，given current ticket prices，it is simply notpossible for many chinese families to afford an evening at the movies when an importedamerican film is showing.the cost of a ticket to see "saving private ryan"in beijing，to take one example ，ranged from 30to 60yuan.such a family outing can easilycost more than ten percent of a family's monthly income.given the alternative ofpirated video compact disks （vcds）costing no more than eight yuan -albeit ofadmittedly far inferior quality -many families simply watched the film at home.this problem has affected attendance for chinese films as well.surveys have shownthat the major reason for the decline in film attendance may well stem from theeconomics of the market.when four vcds can easily be purchased on the street forten yuan，one can watch between five and twenty films at home for the same amountit costs to see one movie in a theater，and afterwards one can exchange the diskswith other people.indeed ，by the summer of 2000the situation had become evenmore serious for american films.not only were many films not available theatrically-such as "american beauty"-easily available on vcd ，but the most popular americanfilms distributed theatrically in china had all become easily available on dvd aswell，with far better quality than the vcds.even older films unavailable on dvdin the united states -such as the "godfather"and "star wars"series -can be purchasedin this format in china.
this issue is likely to remain contentious for the foreseeable future.indeed，after the emei film corporation in sichuan province announced on november 3，2000that it was lowering ticket prices to 5yuan for both domestic and imported filmsin the fifteen cinemas it controlled in chengdu -beginning with the american blockbuster"the perfect storm"（wanmei fengbao）-long lines began to form outside thesetheaters.while theaters in shanghai and beijing generally found this strategy foolhardy，many supporters thought it contained the seeds of the solution to china's post-wtoproblems.the debate continues to rage and has been widely reported in the chinesepress.（39）
other key issues that prevent hollywood from realizing its china dreams werenot addressed in the agreement.for example ，the revenue sharing agreement allowsthe foreign studios ，after payment of taxes ，fees and duties，only about 13percent of the box office.thus ，even a massive hit like "titanic"that took inaround $44million at the box office，generated well below $10million for 20thcentury fox.nor has china film been willing to abandon its monopoly over distribution，although a leading official at the china film corporation conceded in an interviewthat it will be difficult to maintain the monopoly indefinitely and that hollywoodmight be able to forge an agreement in another five years that would allow for moredirect distribution of their films.（40）in addition，a variety of administrativeregulations ，including blackout dates for foreign films during key holiday periodssuch as chinese new year，continue to hinder films such as "mulan，"which wasnot released in china until after students had returned to schools and viewers whowere most enthusiastic had already seen it on pirated video compact disks.censorship，not surprisingly，is also non-negotiable.indeed ，even in pre-1949china ，when90percent of the films shown were of american origin ，government censors notinfrequently banned american movies considered "offensive"to chinese culture.（41）
specific political interventions
in 1997chinese authorities strongly objected to three american releases becauseof their alleged "anti-china bias".although the three films -mgm's "red corner，"sony/columbia/tristar's "seven years in tibet ，"and touchstone/disney's "kundun"-were never intended for distribution in china ，the release of these films inthe u.s.and other world markets was enough to produce a ban on the importationof any films from these studios.bai ling ，the lead actress in "red corner，"a film starring richard gere as an american businessman framed for a murder in chinaand then subjected to the draconian chinese legal system，came in for particularvilification in the chinese press.shanghai's wenhui bao accused the graduate ofthe xian film studio of betraying china "in order to get into a-rated films".（42）
to get these bans rescinded ，the studios had to convince the chinese governmentof their "sincerity ，"often requiring ，among other things ，a high-level tripto china by a delegation headed by the company's ceo，as in the case of mgm，whichfinally had its ban rescinded late in 2000.the other two studios ，much more heavilyinvested in the china market，were successful in getting their bans lifted muchearlier.disney in particular ，with its plans for china including theme parksand other large-scale ventures，and with "mulan"to be released in 1998，undertookextensive damage-control efforts to get the ban rescinded.
on the eve of the release of martin scorsese's "kundun，"a film about the earlyyears of the dalai lama ，disney hired henry kissinger to help explain the company'srather awkward position to his chinese friends.disney's position was awkward inpart because both warner brothers and universal ，also with substantial interestsin developing the china market had，despite scorsese's reputation as perhaps theleading american film director，rejected the film.（43）disney's efforts to returnto china's good graces culminated in a trip to beijing in october 1997by ceo michaeleisner in which he met with senior chinese officials，including propaganda chiefding guan'gen.china has long criticized hollywood for sending american culturalproducts to china while -at least in the view of chinese officials -refusing todistribute and promote chinese cultural products in the united states.eisner pleasedhis hosts by agreeing to distribute two chinese films in the u.s.and sponsoringa chinese acrobatic troupe in europe.in a letter to disney shareholders on december8，eisner described how impressed he was with the success of the ubiquitous mcdonald'sin the china market ，noting that he was "completely confident that the chinesepeople love mickey no less than big mac".（44）despite these efforts，the banon disney films was not lifted until february 1999，at which point "mulan"wasfinally released in china.
