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China: Trick Or Treaty?

To paraphrase Deng Xiaoping, how do you get a black cat and a white cat to catch the same mouse?

The U.S.-China trade accord signed Feb. 26 was hailed in showbiz circles as the first real move in opening up a market of a billion people to non-pirated Western entertainment product. The accord is undoubtedly historic, but beyond that first step lies a yawning East-West gap that’s as deep as the Yangtze River’s Xiling Gorge and as potentially unbridgeable.

To many observers – including this film journalist, who speaks Mandarin and has traveled the region for almost 20 years – two central problems will continue to hamper entertainment deals in China.

The first is how to sell the totally Western concept of intellectual property rights to a culture that has long thrived on its absence.

The second, related problem is that the U.S. accord with China’s federal government may mean little in the vast provinces where most audiences – and pirates – actually live. As central government lurches toward a post-Deng power struggle, diktats from Beijing increasingly carry little importance at the local level. China is effectively becoming a series of vassal states, with provincial and municipal governments competing against each other on their own terms.

The irony is that the U.S. would have gotten a much more controllable deal 15 years ago, when central government had a firmer hand on the country’s tiller.

For his part, Motion Picture Association of America president Jack Valenti argues that China understands sanctions will be imposed again if it does not comply with strict new piracy rules. (As part of the pact, China agreed to close two notorious laser and CD pirating plants.) And China wants to join the World Trade Organization to obtain favorable tariff protection. Furthermore, says Valenti, the Chinese are keenly aware of the tremendous flow of capital that will result from compliance.

“This treaty will work, and it will prove more important than GATT,” Valenti says. He notes skeptics belittled efforts to penetrate the Korean market, where revenues to U.S. companies have grown from $7 million to $133 million in less than seven years.

But the experience of the movie industry in Hong Kong, where copyright symbols only regularly started to appear on pix in the past decade or so, is China in microcosm: a film industry where plagiarism isn’t a dirty word, where genres play themselves out at a furious rate in only a matter of years, and where audiences happily applaud replication as much as complete originality.

Although the concept is unfathomable to westerners, one could argue that the lack of copyright (and the absence of hordes of lawyers) accounts for much of the freewheeling vitality in Asian media, from the Mideast through India to China.

Hollywood may not want to hear that, but it’s a fundamental mindset it will have to take on board if the two sides are ever to find a working relationship. Taking on Europe’s audiovisual policy was just a warm-up for the 15 rounds Valenti & Co. will need to go with China.

Deeply embedded in the Chinese consciousness are the principles of self-reliance, distrust of regulation and officialdom, and always cutting the best deal. Add to that a suspicion of Western heavy-handedness that’s still especially strong in mainland China, and you’ve a volatile recipe for cross-cultural misunderstandings.

The good news is that China’s distribution and exhibition system, following a cowboy period after the breakdown of centralized control by China Distribution & Exhibition Corp., is gradually finding a rationale of its own.

Since the beginning of this year, all Chinese and foreign movies, once past the censor, now get a “permission card” officially qualifying them for distribution. That has helped to rein in a theatrical sector that was previously limited only by the eagerness (or not) of local authorities to monitor it.

Moves are also afoot to set up an exhibitors’ association, so that distribs can deal with theaters as a group rather than individually at present. So far, however, the Film Bureau has nixed the idea.

The bad news is that, in cities both big and small, it’s still the Wild East in video and laserdisc. And the people who control the illegal market aren’t the kind who sit around a table politely talking terms.

But to see “copyright theft” here purely in East-eats-West terms is to miss the point; the Chinese happily pirate each other as well.

Ask director Li Shaohong, whose new pic “Blush,” a romantic triangle set during early Communism, competed at last month’s Berlin Film Festival. After more than two years setting up the project, investing her own funds, being dumped by a Taiwanese producer and finally rescued by a Hong Kong one, she finally had the pic ready to open locally in January.

But late last year, her phone started to ring with reports that a pic with the same title, adapted from the same novel, was showing everywhere from Nanjing and Beijing to northeast China. Outside Nanjing’s biggest theater, billboards announced a cast identical to her own, and tickets were being scalped at double the advertised price.

Inside, patrons got a surprise: same story, different cast, different director (Huang Shuqin), with the movie shown off laserdisc. The novel’s author, Su Tong, denied selling any rights to other parties; headlines were made. Li’s own pic subsequently opened to good biz.

Go anywhere in China and you’ll find emporia and corner vidstores packed with rental titles of Hong Kong, European and American movies, some apparently licensed to mainland distribs, others of murkier origin. Everyone knows what’s going on, but who cares so long as the price is right?

This writer vividly remembers strolling into a vidstore in Wuhan, a major crossroads in central China but little visited by foreigners, and perusing the racks of titles. Even after assuring the woman behind the desk in Chinese that he wasn’t an undercover agent for the MPAA, the woman didn’t stop sweating until he hit the street.

Try to buy a ticket to any of the copious lasertheques or videotheques screening pirated material, and you won’t get past the lobby if you’re a westerner. These salles, which can range from small rooms to large theaters – and go under the decorous title “hall of research” – are off-limits to non-Chinese. Tickets are blockbooked beforehand through work units.

But for the adventurous westerner with a grasp of the language, moviegoing in China offers a kaleidoscope of experiences. Renovations and new building during the past few years have resulted in some splendid new air conditioned theaters in the main cities, with plexes often containing a larger theater alongside smaller vidsalles. Handpainted billboards along the street and atop marquees stand in for one-sheets. It’s no different from any other Asian country in that respect.

Tough going

Foreigners won’t have a problem getting a ticket for the main salles, but beyond those showcase theaters, moviegoing is strictly for the hardy. Prints are often in appalling condition; translations of foreign dialog are often read out through a PA system; seating is painful and air conditioning non-existent during the sweltering summers.

As in the rest of Asia, home video has taken off with a vengeance in China. That’s where the real trouble starts.

With Hong Kong as a convenient conduit, and the same PAL broadcast system on both sides of the border, there’s not even the smallest impediment to piracy for anyone with two VCRs. And in a country that’s vast, fragmented and hungry for anything offshore or foreign, the problem assumes massive proportions.


Add into the equation the fact that videotheques are owned and controlled by the local municipality – and that large-scale, organized piracy is controlled by criminal “triads” with cross-border connections in Hong Kong – and you can see why Valenti and his colleagues may not be getting many early nights in the next few years.

If it’s still Dodge City in the video and laser sectors, it’s Barter City in TV distribution. It’s common practice for Chinese stations to barter material to each other, and webs commonly retransmit terrestrially programs copied off satellite. China has a system of contract law, but it can be slow, labyrinthine and subject to change from political factors as well as business. Western entertainment execs who understand China know it’s best to forget about the law and concentrate on building personal relationships, preferably cemented over much socializing.

They also know that China no more has a unified business mentality than does Europe. Leaving aside the question of whether you’re dealing with a head-to-toe entrepreneur, cadre-turned-businessman or overseas Chinese who’s returned to make a pile in his motherland, there’s as much difference between a suit from stuffy Beijing, savvy Shanghai or quicksilver Guangzhou as there is between a Londoner, Parisian or Roman.

A Chinese proverb points out the fruitlessness of trying to crack a stone with an egg. Westerners would do well to remember that proverb when in China – as well as their own saying about not counting eggs before they’re hatched.

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