Several businesses and industries are caught in the middle of the escalating trade war between China and the U.S. But other industries are feeling the ripple effect, as CGTN’s May Lee found out in Hollywood.
Just when Hollywood thought it was making progress in the 2nd largest movie market in the world, an all-out trade war is on between Washington D.C. and Beijing. The deepening tensions between the two countries are cause for even deeper concerns in Hollywood, which has grown to rely on Chinese moviegoers and investors with deep pockets.
Before the trade war began, both countries were negotiating new terms to increase the number of American films imported to China from 34 to around 50. An increase in revenue share for U.S. studios was also on the table. Currently, it’s 25 percent, while the international norm is 40 to 50 percent.
For producer Robert Cain, who works in both China and the U.S., the escalating trade war could turn very painful.
“Unfortunately for me it’s not theoretical, it’s very real,” Cain said. “I have business going on now. I’m raising money in China as I’ve done for quite a few years and the deals that I’m working, while we’re still moving ahead, they’ve really been crimped by the Chinese government’s reaction to what’s going on, by fear on the part of the Chinese investors that I’m working with.”
Although the trade war would hit Hollywood a lot harder, Chinese entertainment companies aren’t resting easy.
John Liu, founder of Han Pictures said “The trade war will not have a winner. Everyone will hurt. It’s really just a matter of who hurt most.”
But there may actually be a silver lining to this rift for China’s movie industry.
“Perhaps it will benefit the film industry on how to really nurture domestic talent so that could be one consequence,” says film producer Janet Yang. “And maybe it will accelerate the development of these projects so that they will be more marketable to the rest of the world. People will take a beat and say let’s really work on quality.”
But at this point, the reality is there’s still a big trade imbalance. China imports a lot more movies than it exports. For example, the highest-grossing Chinese film in North America last year was Wolf Warrior 2, which pulled in just $2.7 million. Hollywood’s biggest movie in China was The Fate of the Furious, which made nearly $393 million. So needless to say, the U.S. movie industry will be the bigger loser if the trade war gets even hotter.