Market and Marketization in the China Film Business

On April 18, 2009, Jackie Chan told a high-ranking group of mainland business leaders that freedom for Chinese people was not such a great idea. "I'm not sure if it's good to have freedom or not," he said, adding freedom in Hong Kong and Taiwan made those places "chaotic." This brought applause from the audience of officials and executives. "I'm gradually beginning to feel that we Chinese need to be controlled. If we're not being controlled, we'll just do what we want." He added he'd rather buy a TV set made in Japan, as Chinese-made sets might explode. The star's remarks sparked outrage in Hong Kong, Taiwan, and the mainland. "Who are you representing when you say this? And who do you want to be controlled by?" asked blogger Liu Qujing. Chan's company rushed to douse the flames, saying his comments had been deliberately misinterpreted.

In China proper, Jackie Chan's work was well under control. His film Shinjuku Incident (San suk si gin; Derek Yee, 2009) was not released on mainland screens due to violence and a lurid story line about Chinese illegal immigrants. This decision was made by Chan and his backers, not by censors. Chan's character, a gangster named Steel-head, allies himself with a Japanese cop in order to clean up Shinjuku, Tokyo's red-light district, by thrashing rival gangsters from Taiwan. The film was quite favorably reviewed, and Chan was praised for his courage in a dramatic role. Chan's 2010 film, Little Big Soldier, (Da Bing Xiao Jiang, Ding Sheng) is an action comedy. This means a return to form, with Chan appearing in movies in which his audience and investors can feel more confident.

That Hong Kong-Hollywood star Jackie Chan can address mainland elites with such familiarity says a lot about China's ambitions. Since the Reform and Opening thirty years ago, China has transitioned from a planned economy to a market-oriented economy. Chinese film enterprises, like the larger economy, enjoy booming production, investment, and international participation. To a world facing widespread recession, this is enviable. Firms from Hollywood, Europe, Japan, South Korea, and especially Hong Kong hotly pursue joint ventures with the People's Republic of China (PRC) production and exhibition outfits.

Table 1.

China's Annual Feature Film Production and Box Office (1998-2008)

From 2002, domestic production climbed, with a spike in 2004, the year that the Closer Economic Partnership Arrangement (CEPA) was launched (Table 1). CEPA sought to integrate China, Hong Kong, and Macau through a package of changes providing favorable conditions for products and services from the latter two, which are now Special Administrative Regions (SAR) of the PRC.

This was especially helpful to Hong Kong companies like Media Asia, Edko, and Golden Harvest, and furthermore supported coproduction with foreign players abroad. In 2004 production and box office in the PRC grew by over 50 percent, in 2007 by more than 20 percent, and in 2008 by 27 percent.¹ CEPA projects contributed forty pictures to the "domestic" film total in 2008 and therefore played a significant role in the rapid rise of China's film industry over the past decade.

In exhibition, too, there was a 20 percent annual growth rate (400 new screens per year) with 570 new screens opening in 2008 alone, bringing the national total to 4,000 screens.

This growth, however, was not merely a response to changes in audience demand, for China is of course not an unplanned economy. It is instead a country that espouses a very self-conscious policy of marketization. In China today, marketization functions to spur investment, production, and consumption with the aim of encouraging homemade products that are otherwise unable to compete with imports. China's marketization, according to the Communist Party, is supposed to align the industry with international standards, but it is not a path to liberalism or unbridled openness that might pose a challenge to the authority of the Party.

The purpose of marketization is...