Film Industry Explores Ways to Bridge Gap Between China, U.S.

Roughly 500 film industry pros interested in bridging the gap between China and the U.S. packed the Writers Guild of America theater Tuesday to “get into the weeds” of the challenges ahead, as organizer Peter Shiao put it.

The U.S.-China Film Summit, held on the eve of the American Film Market and months before China is meant to open its doors to greater foreign participation in its booming entertainment industry (under WTO mandate), was not, however, meant to be political.

“We’re going to leave politics” — such as China’s 20 film import cap — “at the door,” Shiao said: “This is about bringing together professionals from the most mature market on Earth, and the hottest.”

Shiao, who works with the Asia Society and founded L.A.-and Beijing-based enterainment company Orb Media, was referring, of course, to Hollywood’s box office of $10 billion last year and China’s, which hit $1 billion in the same period but this year has jumped more than 80%.

Wrangling a film-world who’s-who from Hollywood and Beijing – from former Fox executive Bill Mechanic to Su Xiaowei, the director of the script center of the China’s film regulatory body, Shiao frequently drew laughter from an audience comprised, by show of hands, mostly of producers, with a sprinkling of academics and reporters thrown in. Shiao did so by refusing to allow scripted speeches and by asking questions that prompted guests to let their hair down.

Mechanic, the man who greenlit Titanic – China’s top box office grosser for 13 years — said he was not sure that companies would be the first to bridge the gap successfully on a continued basis, but rather individuals dedicated to both markets could succeed.

“Talent can win. I don’t know that companies can win,” Mechanic said. “When we brought John Woo from Hong Kong and Jan DeBont from Holland, it was with the idea to get directors to make films less American so that they could play overseas. It was my job to expand our markets.”

Asked to tell Chinese producers in the audience what to do to succeed in the U.S., Mechanic said: “It’s less about your own country than it is about what stories will play overseas. These borders are the hardest borders in the world.”

Undaunted, Su, who wrote Feng Xiaogang’s box office record breaker Aftershock, said she hoped that China would continue to learn from the trends of world filmmaking but also hoped that Hollywood would blend in more Chinese cultural elements.

Aftershock was just released across America, and though U.S. initial box office results are shaky, a source close to Chinese distributor Huayi Brothers said, China’s submission to the Academy as a best foreign language film Oscar hopeful is evidence of a growing American interest in things Chinese.

“Chinese films are striving to become an important and indispensable part of world culture,” said Su, noting her son had taken the name Tim after his favorite Hollywood director, Tim Burton.

James Stern, CEO of private equity and film production company Endgame Entertainment, said he hoped to be working in China soon on a Marco Polo project with interest to both markets, but cautioned the audience to get some business manners and do its homework.

“One of the things Hollywood doesn’t do well is make money for our partners,” said Stern, director of a film about Chinese NBA star Yao Ming. “There’s always a new kid on the block who doesn’t stick around very long because Hollywood’s not very good to it. The Chinese know a lot more about the American market than the other way around.”

Wang Lifeng, president of Beijing based XingXing, a digital animation company, said he expects his business to increase with Hollywood companies discovering they can do sophisticated technical films in China.

Having already done simple effects work on Twilight, The DaVinci Code and The Forbidden Kingdom, Wang said that what China lacks in government subsidies for co-productions it more than makes up for in cheap labor. “If you shoot in Vancouver you can get $4 million back from a $10 million budget but still shoot a nicer movie in China for less than $6 million. That’s the incentive,” Wang said.

Technical effects aside, if the story’s not right, no co-production will fly, said Orb Media vice chairman and veteran MGM CFO Michael Corrigan. “You have to understand the market opportunity in China. If your co-production is right, you might catch lightning in a bottle, but getting a RMB returned to you from the PRC, don’t count on it,” Corrigan said, referring to China’s currency, the renminbi, or yuan.

“Essentially, China is a financing opportunity at this point.”

Getting the money back, and helping Chinese companies understand why Hollywood is often afraid of doing business there, is the job of panelist Steven Saltzman of law firm Loeb & Loeb, which opened a Beijing office this summer.

“Just when you get to the point when you’ve made a deal I point out all the issues you haven’t though of and mess it all up,” Saltzman, an adviser to Huayi and the Weinstein Co., said. “Sometimes that’s me helping U.S. companies incorporate legal concepts that are important to them into Chinese agreements,” he said, noting that Chinese legal agreements often tend to be much simpler and shorter than their U.S. counterparts and hence cause for concern.

Yu Dong, CEO of Beijing Poly Bona Film Distribution, which has just finished a remake of Paramount’s “What Women Want,” said he hoped the trend for greater trans-Pacific cooperation would continue, and that money for Chinese co-prods would increase. “China’s investing $10 million tops per project today, with the condition that it’ll be able to be shown in China,” he said, referring to the country’s strict no-sex, little-violence censorship guidelines. “If you include Chinese stories and Chinese actors, then a 30% return can be yours. If you’re shooting Western film in China, then you’ll get just get 10%.”

Also participating on Tuesday were Zhang Xun, president of China Film Co-Production Corp.; Yang Hongtao, president of the Ningxia Film Group; Wang Tianyun, vp of Shanghai Film Group; Zhang Zhao, president of Enlight Media; and Zhou Tiedong, president of China Film Promotion International.

Hollywood participants included Elia Infascelli of William Morris Endeavor; Rob Minkoff, director of “The Forbidden Kingdom” and The Lion King; Ken Stovitz, partner at Overbrook Entertainment and producer of The Karate Kid; and Janet Yang, president of Manifest Film Co. and producer of The Joy Luck Club and, most recently, Disney: High School Musical China.

The summit was co-organized by the Producers Guild of America, the Coalition of Asian Pacifics in Entertainment, the USC Marshall Center for International Business Education and Research and the USC U.S.-China Institute.