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U.S. majors to press China

Studios to fight overseas distrib policies

SYDNEY — Worried U.S. majors will send a delegation to China next month to gauge government intentions amid rumors that the distribution of foreign films is not to be opened up as widely as hoped.

The reforms being bruited in Beijing this week are cosmetic changes that won’t satisfy Hollywood or the Shanghai Film Group, the largest provincial studio which is pressing for a distrib license, according to China watchers at the U.S. studios.

Concerned at the lack of progress, the U.S. studios intend to press their case.

In June, Chinese officials trumpeted plans to abolish the China Film Group’s monopoly on distributing imported pics and to introduce competitive bidding for distrib rights — one of the key reforms it dangled to win U.S. support for its entry to the World Trade Organization.

Fears of backtracking

Since then no new film policy has materialized and no distrib licenses have been issued, leading to fears that China is backtracking on its commitment after being assured it can join the WTO in November (Daily Variety, Sept. 25).

The Ministry of Radio, Film and Television is mapping out a scheme to split China Film into two distrib companies, U.S. execs believe. One will comprise China Film’s existing distrib division; the other will be a joint venture, which an unspecified number of provincial studios will be invited to join.

The catch: China Film would be the new entity’s controlling shareholder, so the state-owned agency, and by extension the government, would retain control of distribution.

“It’s a ridiculous situation,” said one U.S. exec. “That’s a cosmetic change that may appease some of those studios that are aspiring to be distributors. But how can you have genuine competition when you have Big Brother in China Film as the dominant shareholder?”

Power of propaganda

China’s waffling is believed to be driven by two factors: a desire by conservative forces in the powerful Propaganda Dept., led by publicity chief Ding Guan’gen, to protect China Film’s position and to ensure the local film industry isn’t overwhelmed by Hollywood films; and infighting among provincial studios, especially those that would be jealous and resentful if the Shanghai Group gets its own license.

The Shanghai Group has not given up hope of gaining a license and is continuing to argue its cause very aggressively.

“We are very eager to get correct information from Beijing,” Shanghai Group VP-general manager Zhuo Wu told Daily Variety on Thursday. “We think the distribution system will be reformed. The trouble is we don’t know the method (of change).”

One U.S. exec believes the joint venture plan may be only a temporary solution to the squabbling among provincial studios, and he hopes there will be a more reform-minded regime next year after Ding is due to retire.

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