Backlot: Cracking the Chinese Market

9:16 PM PST 11/23/2010 by Jonathan Landreth
2010 Laundry Warrior LTD.
“The Warrior's Way” saved $4.5 million as a result of a treaty between New Zealand and South Korea.

International co-production treaties offer enormous opportunity into China’s billion-dollar film business

As globalization continues to transform the international film business, new agreements between overseas partners seem to pop up by the day. Contract law, traditions, common stories and incentives — this is the stuff of film co-production treaties.

To compete with a Chinese taste for Hollywood blockbusters and local-language fare from Hong Kong, filmmakers from France, Singapore and New Zealand joined Beijing this year to get around an annual 20-film cap on imports. Not a bad idea when you consider that China’s theatrical gross increased 86 percent, to $714 million, during first-half 2010 and is set to shatter last year’s record box-office take of $909 million. The treaties follow what the MPAA touts as a victory against China last winter: a World Trade Organization ruling that said China is violating international law governing distribution monopolies. In theory, China will have to open its doors to more Hollywood product, giving every other country with a film industry strong reason to get its own favorable trade deal done. It also will need to become more competitive when it comes to more prosaic matters like film crews, facilities and studio space.

“It’s all about jobs,” says Hollywood producer Michael Peyser, who began shooting The Warrior’s Way, a co-production with South Korea and New Zealand, in 2007, on the cusp of a treaty between the countries. The agreement saved the production $4.5 million on a $48 million budget, but Peyser says money isn’t always the primary factor when pursuing international co-productions.

“In Detroit, we might have saved 40 percent, but you have to ask yourself which place has the best local crew base and what are the traditions,” he says. “In China, there’s the tradition of putting the whole crew in the same hotel; in France, you stop work to eat.”

With content flow increasingly digitized, Peyser sees a time in the near future when content will be managed from various international regions — be they Hollywood or Seoul or Auckland — that have developed centers of creative production. To compete, he says, “China needs to grow itself some more of that.”

Here’s a look at how four recent treaties with China could reshape the global film sector:

CHINA-NEW ZEALAND
Signed in July after five years of planning, this treaty could help New Zealand into China if stories revolving around Chinese workers in the 1860s Otago Gold Rush and Kiwi Communist Rewi Alley can be turned into workable scripts. China is eyeing Weta Workshop to help its films win a global nod commensurate with its movie boom. “China wants access to New Zealand filmmakers and postproduction skills as a bridge to the Academy and winning an Oscar,” says Jim He, founder of the first Chinese film festival in New Zealand in 1998 and a principal shaper of the treaty.

CHINA-SINGAPORE
Also signed in July, this is China’s first treaty with an Asian neighbor. Bringing together governments that strictly regulate film-industry development, it offers Singaporean funding to qualifying films and labels them domestic in each nation once they pass the censors. China offers no incentives beyond cheap, skilled labor, new and increasingly well-equipped studios and access to its growing market. Like the Sino-Kiwi treaty, the pact covers live-action and animated theatrical feature films and telemovies as well as documentaries. Because many Singaporeans speak Chinese, the treaty could spur movies made along ethnic Chinese story lines that hope to resonate abroad.

CHINA-FRANCE
Signed in April on the eve of the Festival de Cannes, where Wang Xiaoshuai (Chongqing Blues) and Jia Zhangke (I Wish I Knew) competed for the Palme d’Or, this treaty was a highlight of France President Nicolas Sarkozy’s state visit to Beijing and brightened Gallic efforts to shine a light on French cinema (which now is in the shadow of Hollywood juggernauts). Unifrance Beijing director Christine Pernin says seven years of negotiations will pay off: “It’s really exciting. The films being prepared are both big and small, Chinese and French.”

CHINA-AUSTRALIA
Signed in August 2007, this co-production treaty birthed Aussie director Roger Spotiswoode’s World War II film The Children of Huang Shi, starring Chow Yun-fat and Jonathan Rhys Meyers. There hasn’t been much activity since, but the alliance will likely be strengthened by the inaugural Australia-China Film Industry Forum, set for Dec. 8-12 in Beijing. Sponsored by the Australian Department of Foreign Affairs and Trade, organizers hope to strengthen ties between the nations and jump-start the 2007 agreement.

For expanded coverage of international treaties, go to THR.com/international.

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