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Beijing backing off pic pledge

Gov't has yet to act on earlier reform promises

SYDNEY — The Chinese government appears to be backing away from its commitment to allow competition in distributing U.S. and other foreign films on the mainland.

Chinese officials in June flagged plans to abolish the China Film Group’s monopoly on distributing imported pics and to introduce competitive bidding for distrib rights (Daily Variety, June 14).

Although these ground-breaking reforms were touted among the key concessions offered by China to secure entry to the World Trade Organization — China now expects to join the WTO in November — thus far the government has not spelled out its new film policy nor made any tangible move to introduce competition in the film sector.

China’s waffling regarding new film distribution licenses, however, is not expected to derail the country’s entry into the WTO, at least from the perspective of the Motion Picture Assn. The pressing priority for the MPA was that China up its yearly quota for foreign films from 10 to 20, a reform China has agreed to abide by.

American and other foreign film companies have expressed interest in striking co-investment deals with new film ventures in China, a move that could be hampered if China Film remains the dominate distrib.

The new impasse apparently stems from divisions among China’s leadership over the extent to which the film market should be reformed, Daily Variety has learned.

Ding Guan’gen, the publicity head of the powerful Propaganda Dept., is resisting moves to allow competition among distribs because he wants to protect China Film, according to one U.S. studio rep who deals with China. Ding represents conservative forces who are ideologically opposed to Hollywood films.

Ding has postponed moves to grant new distrib licenses — the Shanghai Film Group was widely expected to get the first license — and he’s keen to kill that reform, according to one U.S. exec involved in the talks..

One Beijing producer says Ding is taking a different view on that issue than that of China’s president, Jiang Zemin. “Ding is in a conflict situation,” the producer asserts. “President Jiang wants him to implement these changes. So Ding has to really ‘manage’ the changes or, you could say, try to control the changes.”

An official at China Film told Daily Variety he heard the Ministry of Radio & Television (which is overseen by the Propaganda Dept.) has decided not to permit the sharing of films between China Film and the Shanghai Group. That’s because authorities fear they would lose control of the distribution business if competition were allowed, he said.

Alternative plan

The official added he’s been told the ministry is devising an alternative plan that would see China Film’s distrib division split in two, so there would be two China Film arms supposedly competing against each other.

The Shanghai Group reportedly is furious at the prospect of being denied a distrib license and is fighting to persuade the government to follow through on its June commitments.

Zhuo Wu, the group’s vice president/general manager, told Daily Variety Monday, “We’re waiting on a final decision from the central government. We’re still hoping the government will give us a license.”

Zhuo quoted a Chinese proverb to the effect that, in China, any situation can change three times in the time it takes to smoke one cigarette.

Motion Picture Assn. prexy Jack Valenti could not be reached for comment late Monday.

(Pamela McClintock in Washington, D.C., contributed to this report.)

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