Pioneering the New Chinese Cinema

By Evelyn Jacobson

USC alums are using their East-West backgrounds and entrepreneurial prowess to build a bridge between Hollywood and the booming Chinese film industry.

Photo by Andrew Watson/Getty ImagesSlideshow IconPhoto by Andrew Watson/Getty Images
David U. Lee '97, MBA '04, center, with actor Kevin Spacey, left, on the set of <em>Inseparable</em> in China. Courtesy of David U. Lee Movie still from <em>Color Me Love</em>. Courtesy of Ben Erwei Ji Movie still from <em>The Law of Attraction</em>. Courtesy of Ben Erwei Ji Movie still from <em>The Law of Attraction</em>. Courtesy of Ben Erwei Ji Courtesy of David U. Lee Courtesy of David U. Lee Emmy award-winning writer-director Christopher Bremble MFA '96 started Base FX, a visual effects and post-production company in Beijing. Courtesy of Chris Bremble Ben Erwei Ji MBA '03 has helmed several China-U.S. co-productions and placed a Chinese clothing brand in <em>Iron Man 2</em>. Courtesy of Ben Erwei Ji

FEW AMERICAN MOVIEGOERS may have heard of Let the Bullets Fly, but Hollywood insiders certainly are aware of this action-comedy starring director-actor Jiang Wen and Crouching Tiger, Hidden Dragon heartthrob Chow Yun-Fat. Early in 2011, it became China’s largest grossing domestic film ever, taking in roughly 700 million yuan, or $134 million, at the box office and unseating Aftershock, director Xiaogang Feng’s earthquake action picture that brought in a record $105 million the year before. It’s only a little more likely that American audiences have heard of The Flowers of War, an epic drama featuring Christian Bale and a lot of English dialogue. It became a 2012 Golden Globes nominee for best foreign language film and China’s top grossing domestic film for 2011, earning $83 million in 17 days. And Hollywood movers and shakers are sitting up and paying attention.

That’s because figures like these, while not at the level of chart-topping U.S. blockbusters, are revolutionary in China. Over the past two and a half years, the Chinese film industry has experienced an unprecedented boom. Currently, China ranks as the third largest movie market in the world, behind North America and Japan. By 2015, it is expected to skip ahead to second place, behind the United States. China also is the world’s third largest film producer, after the United States and India, respectively.

Dig deeper into industry statistics and the numbers continue to impress: In 2010, China’s box office grosses soared 64 percent to reach $1.5 billion in tickets sold. This past year, they grew another 30 percent, reaching about $2 billion.That’s still less than one-fifth of Hollywood’s $10.2 billion gross for the same year, but the trend is clear. Domestic audiences are no longer the main revenue source for American films; nearly 70 percent of box office revenue for North America comes from overseas. And considering its rapidly advancing middle class of 190 million potential moviegoers, China promises to be the biggest new market for Hollywood films.

Meanwhile the phrase “coming to a theatre near you” takes on new meaning when you factor in the current construction boom in Chinese movie houses. In 2011, China added 2,800 screens – that’s a rate of about eight per day – bringing the total to more than 9,000, compared to 2010’s 6,200 movie screens in about 2,000 cinema complexes. That number is projected to hit 60,000 before 2020. By comparison, the United States had slightly fewer than 40,000 screens at the end of 2009, according to the National Association of Theatre Owners.

Taken together, these facts present a new world of opportunity for American filmmakers blessed with the pioneering spirit, the cross-cultural fluency and the business acumen to trailblaze the Chinese cinematic frontier.

David U. Lee ’97, MBA ’04 is a good example. A producer and entertainment entrepreneur who has straddled the Chinese and U.S. film business for seven years, Lee has spearheaded several high-profile English-language, Chinese-themed productions. He produced the 2011 comedy-thriller Inseparable, starring Kevin Spacey; distributed the 2010 Jackie Chan flick The Spy Next Door, orchestrating its same-day release in China and the United States; was co-executive producer of Forbidden Kingdom (2007), a martial-arts movie starring Chan and Jet Li, and Shanghai (2010), a mystery thriller set in the 1940s starring John Cusack and Gong Li; and ran a $285 million Asian film fund for The Weinstein Company, a major American studio.

It helps immensely that Lee has a foot in both worlds. Born in Taipei, Taiwan, he grew up in Hacienda Heights, Calif., with parents who encouraged him to speak Chinese. But he points to a trip to Shanghai during his MBA program at the USC Marshall School of Business as a career-shaping experience: The school’s Pacific Rim International Management Education trip first exposed Lee to the possibilities of working in China. “I was fascinated by Shanghai – the energy and how vibrant it was. I said to myself, ‘I have to go to China,’”he recalls.

USC is well positioned to give graduates like Lee a leg up in China’s booming cinema industry. In addition to its location at the gateway to the Pacific Rim, USC boasts a strong commitment to China through academic research, cultural conveners (such as the USC U.S.-China Institute and the East Asian Studies Center at the USC Dornsife College of Letters, Arts and Sciences) and numerous exchange programs with Chinese institutions (such as the Communication University of China and Fudan University). It’s hard to quantify how many Trojans are now or will soon be making a splash in Chinese cinema.

In China, as in America, the entertainment industry draws new talent not only from film schools, but also from a range of academic disciplines, including engineering, finance, law, journalism and music, to name a few. USC maintains top-rated programs in all of these fields. And it also is notable that, for the 10th year in a row, USC in 2011 led the nation in the number of foreign students it attracts (8,615), by far the largest group of them being Chinese (1,951).

Crouching tigers

For Lee, who currently heads his own production company, Leeding Media, with offices in Beijing and Santa Monica, Calif., there’s a strong sense of being in the right place at the right time. “The great thing about being an early mover is you’re setting the rules and setting the standards – doing really fun, exciting stuff,” he says. “But it’s really difficult,too,” notes the man who advised China Film Group Corp. on the structure of the co-production deal for The Karate Kid remake starring Jackie Chan and Jaden Smith. “There’s a lot of hand-holding and trying to get the two sides [Chinese and American] to understand each other better.”

But the good far outweighs the bad. Looking at the horizon, Lee sees a stampede approaching. “It’s clearly the tipping point. Box office will continue to grow, and, increasingly, foreign companies will realize they have to have a piece of that,” he says. “Over the next five to 10 years, I think all mini-majors and major companies should have a China operation. You can’t miss out on the opportunities over there.”

Of course, the Chinese government is well aware of Hollywood’s interest and sets rules to protect its market, such as strict import quotas that limit revenue-sharing foreign films to 20 releases plus 14 large-format or 3-D films each year, with only 25 percent of profits going back to the overseas studio.

For China’s political leadership, the budding film sector is seen not just as an engine for economic growth, but also as a tool for wielding influence on the international stage. The government’s stake in the industry – it’s a major investor in film production, distribution and multiplexes – is part of the latest Five-Year Plan, the Communist Party’s blueprint for economic development.

“Film is a great way to promote Chinese culture globally and establish the soft power of China,” observes Chinese culture scholar Shaoyi Sun MA ’97, PhD ’99. “The government realizes that it needs culture products to establish its image globally. This is why there are so many initiatives,” says the Shanghai native, who teaches in USC Dornsife’s East Asian Studies Center (EASC).

But America has something the Chinese government desperately needs: expertise. According to USC Dornsife political scientist and China expert Stanley Rosen, the government has the money to finance major films, but it lacks the infrastructure and know-how to consistently make high-concept blockbusters, such as the Harry Potter film series or Avatar. So it is trying to learn everything it can from the U.S. film industry.

“The problem now is that China is trying to do a lot of things at the same time,” says Rosen. “They’re trying to domestically and internationally build up their soft power by exporting films. They’re also trying to build their brands to compete with the U.S. – and film is one aspect of that. [But] the most important thing for film [in China] is politics and political socialization, and that will trump anything else.”

As the Chinese film industry takes off, the demand for seasoned professionals goes hand in hand with the demand for experienced film educators to train the next generation of home-grown filmmakers.

An example of this is Lora Yan Chen MBA ’95, now a visiting professor at Beijing Film Academy, China’s most prestigious film school and Chen’s undergraduate alma mater, where she studied cinematography before coming to the United States for her graduate education. She counts among her film school classmates Zhang Yimou, Chen Kaige and Li Shaohong – members of China’s elite “Fifth Generation” of filmmakers, a term that refers to the 1982 class of the Beijing Film Academy. On the school’s faculty since 2010, Chen teaches a course on the U.S. film industry in the school’s management department, preparing future Chinese agents, producers, distributors and exhibitors to work globally.

Her knowledge comes from years of trial and error. Through her company, China Media Consulting, Chen has helped clients large and small, including Walt Disney Imagineering and Paramount Parks, navigate the Chinese market. Chen’s most notable accomplishment was persuading the Chinese government to lift its ban on MGM in 2000 after the studio had offended with its release of Red Corner, a 1997 film starring Richard Gere as an American businessman framed for murder by top Chinese officials.

After living in the United States for 20 years, Chen recently started spending the bulk of her time in Beijing, where business is booming and the demand for her skills is high.“There’s money and lots of energy, but in terms of people able to handle the global business well, China is still on a learning curve,” she says. Courses like Chen’s increasingly are repackaged as weekend seminars for industry professionals.

Workshops attract high-ranking executives from investment and media companies keen to understand how the global film market functions and how the English-language industry compares to the local industry, according to Jason Squire, a USC film professor who has created and taught his own seminars for the Beijing Film Academy and the Cheung Kong Graduate School of Business in Guangzhou, China. “There is a sense of exploration and discovery in terms of media and an appetite for knowledge about the way Hollywood does business,” says Squire, whose popular text, The Movie Business Book, has been translated into Spanish, Japanese and, most recently, Chinese.

Chen says she would like to teach a similar course at USC on the Chinese industry, bringing the information loop full circle.

Ticket to the top

As with many creative industries, numerous possible routes can lead to success in Chinese cinema. No single credential is required. USC is preparing China-focused film professionals not only through its cinematic arts and business administration programs, but also through various other academic programs, including ones offered through the USC Annenberg School for Communication and Journalism.

“We are training a lot of young Chinese students in our communications management track and strategic public relations track,” says Tom Hollihan, a communications professor at USC Annenberg. “They are going back and assuming positions in Chinese entertainment companies.”

The business is attracting American expats as well. One example is journalism graduate Zachary Franklin ’07, currently a market strategy manager at Beijing-based YOU On Demand, the first national pay-per-view and video-on-demand platform in China. This service, which provides Hollywood movie content, has the potential to reach 200 million cable households and may be part of a solution to the country’s rampant piracy problems. Franklin has spent the last four years in China, along the way earning a master’s degree in economics at Fudan University in Shanghai. “It’s about being in the right place at the right time,” he says. “It seemed to me that getting a degree in economics and then working in a country undergoing the amount of change that’s going on in China was the best opportunity.”

Another successful expat is cinematic arts graduate Christopher Bremble MFA ’96, a writer-director who had already “made it” in Hollywood when he started Base FX, a visual effects and post-production company in Beijing. Capitalizing on a demand in the Chinese market for Western-style visual effects, the business has grown from 12 employees in 2006 to a current staff of 225. While Base FX has done award-winning work on U.S. projects – Bremble won an Emmy in 2010 for effects on the epic war saga The Pacific, and his company received its second Emmy in 2011 for work on HBO’s critically acclaimed series Boardwalk Empire – its bread and butter is the domestic Chinese industry. Seventy percent of the company’s projects are homegrown, including effects for such renowned directors as Zhang Yimou, Lu Chuan, Chen Kaige, Jia ZhangKe and Gordon Chan.

Other USC programs have been springboards for China-based film professionals as well. USC Viterbi School of Engineering graduate Rong Chen ’91, for example, combined his unique skill set as an electrical engineer with an MBA and years of operations experience, along with deep knowledge of the American and Chinese markets, to run the business side of Perfect World Pictures. A spin-off of Chinese game developer Perfect World, the production and distribution company created one of the country’s biggest critical successes in 2010, the whimsical The Piano in a Factory. Its most recent release, a romantic comedy called Love Is Not Blind, opened at No. 1 at the box office in China in November. It is the country’s most successful romantic comedy to date, grossing $55 million in its first five weeks – an impressive return on investment for a film that cost $2 million to make and market.

And proving that the Trojan Family is alive and well in China, Chen recently signed fellow USC grad David U. Lee, the aforementioned producer, to develop and produce movies for Perfect World Pictures, primarily for the domestic market.

The expats have an edge: “For Chinese companies, Hollywood is more sophisticated in every way in this industry, and there’s a certain prestige in working with Hollywood – it’s branding and perception,” Chen says.

Yin and yang

Meanwhile, Chinese film companies are trying to boost the quality of homegrown films to extend their reach. “It’s a way to balance the influence of Hollywood and a way to compete and catch up,” says USC-based culture scholar Shaoyi Sun. “They realize Hollywood as a global industry is relying on the international market, and Chinese cinema would like to have more power on the global scene.”

At a USC film industry summit in 2010 focusing on co-productions and collaborations between Hollywood and China, “[the Americans] were falling over themselves to thrust their business cards into the hands of the Chinese reps,” recalls Clayton Dube, associate director of the university’s U.S.-China Institute, which co-hosted the summit. “But they were all very disappointed because the central message [from the Chinese] was, ‘We will not fund anything that will not make [back] our full investment in China. We do not want to speculate on global gross. We want a firm idea of what the films will do in China.’”

Co-production is the buzzword on both sides of the Pacific. It represents one of the best ways for filmmakers in China and Hollywood to attain their mutual goals while skirting the country’s stringent import rules. Encouraged by their government, Chinese companies team with overseas firms to capitalize on Hollywood’s knowledge and create projects that can appeal to both domestic and global audiences. And because a co-production is considered a domestic film in China, it can garner 47 percent of box office receipts for the overseas partner.

Last October EASC and USC Annenberg’s Norman Lear Center co-sponsored a two-day UCLA-USC conference on globalization of the Chinese entertainment industry. Marty Kaplan, Lear Center founding director and Norman Lear Professor of Entertainment, Media and Society, moderated a lively discussion about co-productions, with the experts on his panel predicting more co-productions and more Chinese investors looking for entertainment projects to invest in. “What makes co-productions so attractive is that they’re a way to end-run the Chinese quota of importing 20 foreign films a year,” Kaplan says.

“International co-production is the norm rather than the exception, and it’s the future in terms of filming and subject matter,” says Mark Jonathan Harris, a three-time Oscar-winning documentarian and Distinguished Professor at the USC School of Cinematic Arts (SCA). With that logic in mind, he and USC Univerity Professor Marsha Kinder, a noted culture theorist and global cinema scholar, launched Chinese-American documentary exchange program. Now in its fifth year, the program airs film students from USC and the Communication University of China, challenging hem to create and produce a short documentary on the topic of their choice in just six weeks.

“The pitfall of co-production – and what people want to avoid – is something that becomes mediocre and weird because it’s trying to appeal to two cultures,” says screenwriter Simon Weining Sun MFA ’02. “The problem is the script loses its meaning and authenticity, and the film bombs in both places.”

A Beijing native who works in both the United States and China, Sun wrote The Door (2007), the first psychological thriller released theatrically in China. “There’s a real demand for commercial films with a good cast and a good story, but the problem with Chinese stories is that they are shallow. There’s no inner logic, no psychology. If they want the film to travel, it must go deeper,” Sun says.

But government intrusion in the form of censorship is a real stumbling block. State censors must approve all film scripts in China before a permit is issued to start production. With no rating system comparable to the one in the United States, films are expected to screen for audiences of all ages. Sex, excessive violence and themes that cast the Communist Party or Chinese government in a negative light are banned. Also off-limits is anything set during the Cultural Revolution, which often leads filmmakers to produce historical epics or action movies. A film also can be banned after it’s already made.

“Someone could spend a great deal of money on a film and find out at the last minute that it’s going to be banned,” SCA dean Elizabeth M. Daley told the Financial Times while in Hong Kong for USC’s Global Conference last fall. “I hope, for the sake of China, that as a culture we will begin to see this loosen up.” 

With his understanding of both Chinese and American cultures, Sun feels that he’s in a good position to break through – creating a story that works both for China and the international market. Currently, Sun is working with veteran producer Bill Kong (Crouching Tiger, Hidden Dragon) to adapt the Wachowski Brothers 1996 hit film Bound for the domestic Chinese audience. In his version, the story takes place in 1914, long before the communists took power.

Independent producer Ben Erwei Ji MBA ’03 sees co-production as a good strategy for entry into the China market, but he knows firsthand how difficult it is to produce films that will succeed internationally. Ji has produced several films over the past three years in Beijing: Gasp (2009), featuring American actor John Savage, Color Me Love (2010) with Joan Chen and The Law of Attraction (2011). All did pretty well in the Chinese market, but none has received theatrical release in the United States.

“It’s very hard to be accepted in the international market,” Ji says. “I believe that if you have a strong concept and style, [a film] should do very well in China and internationally. But it’s a tough job. Looking through all the movies that could work on both sides, only Crouching Tiger, Hidden Dragon, Hero, and Kung Fu Hustle did well. Many companies are trying to find the right project, including the big producers and Hollywood stars. It’s very difficult to figure out.”

Theatrical box office is tremendously important in China because the ancillary revenue streams, such as DVD releases, are deeply diminished by piracy – a factor of the Chinese marketplace that hampers the industry.

Savvy producers like Ji have responded by developing other sources of revenue, such as product placements.

With a growing consumer economy and increasing brand consciousness, Chinese companies are looking for international placement for their products in both Chinese and Hollywood films – a service Ji’s company, Angel Wings Entertainment, provides. In Iron Man 2, Ji placed China’s Semir Brand clothing, with Scarlett Johansson and Robert Downey Jr. both donning the casual wear in the film.

“Product placement is just beginning, and it’s becoming a hot topic for advertisers and agencies in China,” Ji says. “The companies care more about the business the movie will [generate] in China, because the domestic market is big enough. It can give the Chinese brand a big enough push to win a lot of Chinese consumers.”

Give this growing film sector some time, and the productions these inventive Trojans help create may no longer be like Let the Bullets Fly or The Flowers of War – obscure to all outside China but Hollywood cognoscenti. They may instead be as familiar and as irresistible to Middle America – and to the rest of the world – as the Harry Potter films or Avatar


Evelyn Jacobson is a Los Angeles-based freelance business writer whose articles have appeared in Variety, Business.com, Animation Magazine and The Hollywood Reporter.

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