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China Film Player Reveals Efforts to End Censorship (Q&A)

Wang Jianlin’s story is one of the great rags-to-obscene-riches sagas of contemporary China. As a boy he endured the brutal deprivations of the Cultural Revolution; as a teen he joined the Chinese military; and when he later dropped out, having never finished high school, he went on to found a small private real estate business that would grow into a $35 billion conglomerate, employing 50,000 people, with holdings in shopping malls, office towers, luxury hotels, and Chinese entertainment outlets.

Now, the 57-year-old Wang -- China’s sixth-richest individual, according to the Harun China Rich List -- also is the proud new owner of AMC Entertainment, North America’s second-largest cinema chain. In a deal announced in late May, Wang’s Beijing-based Dalian Wanda Group acquired AMC for an estimated $2.6 billion, with $500 million allocated for direct investment and upgrades in AMC’s theaters. Adding AMC’s existing 5,034 screens to Wanda’s 730 in China (with a goal in place for 2,000 screens by 2015), Wang’s company is now the biggest film exhibitor on the planet.

In China, he’s regarded as one of the true visionaries of his generation. But his big buy into North American exhibition, where ticket sales declined by 4 percent last year, generally has been appraised as a risky bet by the international business commentariat.

In a frank conversation from his Beijing headquarters, Wang spoke with The Hollywood Reporter about his next big buys in the Western entertainment world, the hands-off approach he plans to take toward managing AMC and why China must reform its censorship regime if the country’s film industry is ever to compete on the global stage.

The Hollywood Reporter: You’ve mentioned in recent interviews that you’re interested in making further investments in movie studios, film production and live entertainment. What are your ambitions in this area?

Wang Jianlin: We don’t have concrete plans for movie co-productions with any Hollywood studios yet, but since the AMC merger and acquisition announcement, we’ve come around to this idea of working with big studios from Hollywood for film production. Eventually we plan to do that. For Wanda’s film production business at home, our target is to be among the top three in China within the next three years. But in regards to oversees production and related industries, we don’t currently have any set plans.

THR: We’ve heard that Europe is the next market you’re looking to buy into. Can you share some details about your plans and ambitions there? What are you pursuing?

Wang: Well, the first prerequisite is the successful transaction of the AMC deal. As you know, the AMC acquisition must first get the approval of the relevant American authorities. We’re going to seek to acquire one or two European theater circuits, but only after the successful closing of the AMC deal. Right now we’re holding some discussions with European theater chains, but because of confidentiality agreements, I can’t give you names yet.

THR: More generally, why have you chosen to target the global entertainment sector with Wanda’s considerable resources?  

Wang: As you know, Wanda Group started by developing shopping centers, and at that time -- about 10 years ago -- movie theaters in China were run by state-owned companies. There were no cross-provincial companies running theaters. So it was at this point in time, with this opportunity in mind, that we first started our film and entertainment business. Right now, for our investments in culture industries, we’re pursuing five areas: film exhibition, film production, stage shows, chain entertainment outlets such as karaoke centers and, lastly, fine art collecting. Wanda is currently the largest private investor in the Chinese culture industry. Why? Because it’s good business. By the end of 2012, our revenue from our culture and entertainment investments will amount to $3.5 billion. Our target for the end of 2015 is $6 billion.

THR: What specific factors motivated you to acquire AMC Entertainment?

Wang: There were two main considerations. The first was to accelerate the expansion of Wanda’s theater circuit abroad. We want to be a global film exhibitor, and to develop this infrastructure on our own would take a very long time. Through the M&A, we could achieve this feat very quickly. Secondly, as you know and as others have said, considering the U.S. market alone, the rate of return on this kind of M&A is comparatively low. However, Wanda’s cinema business is seeking an IPO soon, and we’re expecting certain approval of our application. Following the IPO, we’re estimating that through renovation and remodeling of AMC’s theaters over the next one to two years, we’ll be able to generate profits. And we would like to put that into Chinese assets so as to generate its profits in a Chinese kept market.

THR: It’s been reported that Wanda-AMC is looking to show a more diverse lineup of content in AMC cinemas -- more Spanish and Bollywood programming has been mentioned -- and that Wanda’s $500 million investment will help make this possible. Are you interested in showing more Chinese content in AMC theaters as well? Is that a priority or a goal?

Wang: For Wanda itself, we don’t currently have any plans or a structure in place to export Chinese films. Whether AMC cinemas will show more Chinese films will be totally up to AMC’s current management, which we intend to leave intact, responding to market demand.

THR: Are you a big movie fan yourself? What kind of films and entertainment do you enjoy?

Wang: I’m actually not much of a movie fan. [Laughs.] Although I’m heavily invested in the movie theater business now, I seldom go to the cinema myself -- I’m a pretty busy person. I’ve only seen a couple of movies from the U.S. recently: Titanic and Kung Fu Panda, both in Imax and 3D.

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THR: The Financial Times recently reported that you eschew Hollywood fare because of its lack of “traditional Chinese morality.” Is it going to be uncomfortable for you if some of the films showing in your cinemas, both in China and the U.S., could be perceived as not particularly “moral”?

Wang: No, that report must have been mistaken. On the contrary, I very much admire and support Hollywood movies -- particularly the big ones. I find them very impressive, and they usually show a very positive attitude about life -- they capture some of the beauty of life and a sense of its true value. It’s actually Chinese movies that I often find unsatisfactory. I often don’t see much value in them.

THR: About that -- how do you assess the current state of the Chinese movie industry?

Wang: In my view, our culture and entertainment industry is still pretty immature. Its share of the world market and its share of the Chinese GDP is very, very small. That’s the reason that our government stipulated a very providential policy last year for developing this sector over the next 10 years. There have been a number of policies concerning laws and taxation introduced to encourage our entertainment industry. So I’m looking forward to a golden era sometime in the next 10 to 20 years in the development of Chinese culture and entertainment.

THR: What do you think is holding back the Chinese film industry? What needs to occur for Chinese filmmakers to compete with Hollywood on the world stage?

Wang: From my observations, there are three things holding back the Chinese industry. The first thing is lack of attention from the government and private enterprise. In recent years, we’ve attached great importance to the country’s economic development through core industries, while mostly ignoring culture and entertainment. The second reason has to do with the investors themselves. Before, our major investors in entertainment were just small and medium-size enterprises. There were no deep-pocketed investors like Wanda active in the industry. So that constrained the size of investment and the level of quality Chinese film production and entertainment could achieve. The last factor is our comparatively strict censorship system for film production and publication. These are the biggest factors that have been holding us back. But I think we’ve begun to acknowledge these issues and are now proposing solutions. Right now, as I mentioned, the Chinese government has attached great importance and has held many meetings and produced influential papers supporting the development of culture and entertainment. We need to attract more of China’s biggest enterprises to join this industry and make big investments, such as Wanda is doing. Thirdly, I think we should lose the censorship and approval system of film production and publication.

THR: Lose the censorship? Do you think that there’s a good chance that will actually happen?

Wang: It’s absolutely possible. There’s a chance.

THR: In your view, how has the censorship and approval process in China been hindering the industry?

Wang: A censorship system in general is not a problem. Many countries have a censorship system of some kind; the U.S. has its rating system. The problem with our system is that there is only one authority -- the film bureau [the State Administration of Radio, Film and Television] -- with a small number of people who are in charge of the approval of all films, which takes a long time. And some of these people will shoulder different ideas, so the directors will have to correct or make changes to their artistic vision, based on the opinion of a small number of so-called experts. This has severely held back the development of our film industry. I’ve proposed that we have to decentralize the censorship process and assign it to local, provincial governments. If we let different provincial governments handle the approval of various films, we can learn what works from the various instances and films. If that can be achieved, I believe the film industry of China can prosper.