China
The future of Hollywood–China relations after the pandemic
Author: Wendy Su, UC Riverside
Though film industries are market-based and profit-driven, they cannot escape the constraints of the political structures, ideology, or cultural value systems in which they are situated. Nor can they be removed from diplomatic relations and geopolitics. So, as US–China relations reach their iciest point in decades, Hollywood and ‘Chinawood’ are caught in the middle.
The Hollywood–China relationship has alternated between a competitive and collaborative dynamic over the last four decades. In the 1990s, Hollywood’s near monopoly of the Chinese film market caused a crisis in China’s domestic film industry. Renowned art house filmmakers, such as Zhang Yimou and Chen Kaige, decided to take Hollywood’s approach and began producing commercially viable genre films. This resulted in domestic Chinese films generating record high box office revenues.
By the early 2000s, China had used Hollywood resources to modernise its film industry. Up to mid-2017, the partnership entered an unprecedented honeymoon period, marked by a reverse flow of inpouring Chinese capital, the acquisition of Hollywood studio shares and a record-high number of film co-productions. This trend culminated in the first half of 2017 when Chinese capital funded 25 per cent of Hollywood exports to China.
But 2017 marked a turning point in the Hollywood–China relationship. Amid the Trump administration’s trade war and Republican politicians’ heavy criticism of Hollywood’s ‘kowtowing’ to Beijing, films and co-productions, such as Disney’s 2020 remake of Mulan, fell prey to politics. The COVID-19 pandemic further devastated US–China relations and brought the fear of a possible all-around de-coupling between the two countries.
Beyond politics, the Chinese audience’s taste has also changed. China surpassed the United States to become the world’s biggest movie box office in 2020. Imported movies now account for only about a sixth of China’s total box office — a nearly 55 per cent decrease year-on-year — with China’s homemade movies outperforming Hollywood imports like The Tenet, Wonder Woman 1984 and Mulan. An executive at one of Beijing’s leading distributors claims that ‘the whole culture has changed’.
Pessimists begin to wonder about a future of a Hollywood without China, or a China without Hollywood.
Hollywood is facing its biggest challenge since it re-entered China in 1994. Chinese audiences are no longer as fascinated by Hollywood films as they were 20 years ago and are increasingly embracing homegrown movies. China’s rising status on the international stage and the changing global balance of power have played a major role in this shift — reinforced by China’s successful containment of the COVID-19 pandemic and swift economic recovery.
When revenue-sharing Hollywood movies first re-entered mainland China, they were enthusiastically embraced by a Chinese audience longing for reform and modernity. Hollywood films were emblematic of the US way of life and an idealistic liberal democratic society. The status that Hollywood films enjoyed in China was closely related to the status of the United States as ‘a city on the hill’ and a beacon of democracy.
But after 25 years of immersion, the Chinese audience is no longer obsessed with repetitive blockbusters. The failure of the United States to control the pandemic has also greatly disillusioned the Chinese audience, shattering their pre-existing good faith in the US system. At the same time, their obsession with US movies, culture and values has diminished.
What will the future hold for the Hollywood–China relationship?
Hollywood will still have a place in China. The major reason lies in the basic nature of the film industry as a market-based and profit-driven business. Politicians come and go, geopolitics intervenes and withdraws, but audiences are here to stay. The market logic ultimately rules and serves as the foundation that sustains the Hollywood–China partnership.
The special effects and entertaining value of Hollywood movies also provide unmatchable visual pleasure and psychological catharsis for hard-working Chinese audiences, especially Chinese youth trapped in the real world’s life struggles.
The latest market success of Fast and Furious 9, Godzilla vs Kong, the nostalgic re-release of old Hollywood imports Avatar and Lord of the Rings, and the Chinese audience’s enthusiastic viewing of Friends: The Reunion testify to the lingering influence and glamour of Hollywood movies in China. If China further…
China
China Implements New Policies to Boost Foreign Investment in Science and Technology Companies
China’s Ministry of Commerce announced new policy measures on April 19, 2023, to encourage foreign investment in the technology sector. The measures include facilitating bond issuance, improving the investment environment, and simplifying procedures for foreign institutions to access the Chinese market.
On April 19, 2023, China’s Ministry of Commerce (MOFCOM) along with nine other departments announced a new set of policy measures (hereinafter, “new measures”) aimed at encouraging foreign investment in its technology sector.
Among the new measures, China intends to facilitate the issuance of RMB bonds by eligible overseas institutions and encourage both domestic and foreign-invested tech companies to raise funds through bond issuance.
In this article, we offer an overview of the new measures and their broader significance in fostering international investment and driving innovation-driven growth, underscoring China’s efforts to instill confidence among foreign investors.
The new measures contain a total of sixteen points aimed at facilitating foreign investment in China’s technology sector and improving the overall investment environment.
Divided into four main chapters, the new measures address key aspects including:
Firstly, China aims to expedite the approval process for QFII and RQFII, ensuring efficient access to the Chinese market. Moreover, the government promises to simplify procedures, facilitating operational activities and fund management for foreign institutions.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
China
Q1 2024 Brief on Transfer Pricing in Asia
Indonesia’s Ministry of Finance released Regulation No. 172 of 2023 on transfer pricing, consolidating various guidelines. The Directorate General of Taxes focuses on compliance, expanded arm’s length principle, and substance checks. Singapore’s Budget 2024 addresses economic challenges, operational costs, and sustainability, implementing global tax reforms like the Income Inclusion Rule and Domestic Top-up Tax.
Indonesia’s Ministry of Finance (MoF) has released Regulation No. 172 of 2023 (“PMK-172”), which prevails as a unified transfer pricing guideline. PMK-172 consolidates various transfer pricing matters that were previously covered under separate regulations, including the application of the arm’s length principle, transfer pricing documentation requirements, transfer pricing adjustments, Mutual Agreement Procedure (“MAP”), and Advance Pricing Agreements (“APA”).
The Indonesian Directorate General of Taxes (DGT) has continued to focus on compliance with the ex-ante principle, the expanded scope of transactions subject to the arm’s length principle, and the reinforcement of substance checks as part of the preliminary stage, indicating the DGT’s expectation of meticulous and well-supported transfer pricing analyses conducted by taxpayers.
In conclusion, PMK-172 reflects the Indonesian government’s commitment to addressing some of the most controversial transfer pricing issues and promoting clarity and certainty. While it brings new opportunities, it also presents challenges. Taxpayers are strongly advised to evaluate the implications of these new guidelines on their businesses in Indonesia to navigate this transformative regulatory landscape successfully.
In a significant move to bolster economic resilience and sustainability, Singapore’s Deputy Prime Minister and Minister for Finance, Mr. Lawrence Wong, unveiled the ambitious Singapore Budget 2024 on February 16, 2024. Amidst global economic fluctuations and a pressing climate crisis, the Budget strategically addresses the dual challenges of rising operational costs and the imperative for sustainable development, marking a pivotal step towards fortifying Singapore’s position as a competitive and green economy.
In anticipation of global tax reforms, Singapore’s proactive steps to implement the Income Inclusion Rule (IIR) and Domestic Top-up Tax (DTT) under the BEPS 2.0 framework demonstrate a forward-looking approach to ensure tax compliance and fairness. These measures reaffirm Singapore’s commitment to international tax standards while safeguarding its economic interests.
Transfer pricing highlights from the Singapore Budget 2024 include:
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
China
New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
China has been the world’s largest manufacturer for 14 years, producing one-third of global manufacturing output. In the Emerging Asia Manufacturing Index 2024, China ranks highest among eight emerging countries in the region. Challenges for these countries include global demand disparities affecting industrial output and export orders.
Known as the “World’s Factory”, China has held the title of the world’s largest manufacturer for 14 consecutive years, starting from 2010. Its factories churn out approximately one-third of the global manufacturing output, a testament to its industrial might and capacity.
China’s dominant role as the world’s sole manufacturing power is reaffirmed in Dezan Shira & Associates’ Emerging Asia Manufacturing Index 2024 report (“EAMI 2024”), in which China secures the top spot among eight emerging countries in the Asia-Pacific region. The other seven economies are India, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, and Bangladesh.
The EAMI 2024 aims to assess the potential of these eight economies, navigate the risks, and pinpoint specific factors affecting the manufacturing landscape.
In this article, we delve into the key findings of the EAMI 2024 report and navigate China’s advantages and disadvantages in the manufacturing sector, placing them within the Asia-Pacific comparative context.
Emerging Asia countries face various challenges, especially in the current phase of increased volatility, uncertainty, complexity, and ambiguity (VUCA). One notable challenge is the impact of global demand disparities on the manufacturing sector, affecting industrial output and export orders.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
- China Implements New Policies to Boost Foreign Investment in Science and Technology Companies
- Q1 2024 Brief on Transfer Pricing in Asia
- New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
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