Lawmakers Raise Questions About Chinese Investment in Hollywood

AMC theater
Courtesy of AMC

The rise of Chinese investment in Hollywood is raising alarms in Congress, which could complicate studios’ ambitions to strengthen ties to the Middle Kingdom.

The latest salvo came in a letter from 16 members of Congress last week, which called for closer scrutiny of Chinese investment in the U.S. entertainment and media sectors. The letter cited the Dalian Wanda Group’s acquisitions of Legendary Entertainment, AMC and Carmike Cinemas, and warned of “growing concerns” of Chinese efforts to exert “propaganda controls on American media.”

Wanda has been on a buying spree, of late, announcing a merger between AMC and Carmike that would make it the largest exhibitor in the world. Earlier this week, news broke that Wanda plans to form a multi-picture alliance with Sony Pictures.

Rep. Chris Smith, a Republican from New Jersey, warned that growing Chinese investment could raise strategic concerns.

“Would we raise questions if Russia or Iran was buying large parts of U.S. media and entertainment companies? Of course we would,” Smith said in a statement to Variety. “Raising questions about Chinese investment is no different.”

The principal author of the letter is Rep. Robert Pettinger, R-North Carolina, who has been outspoken in the past about various Chinese acquisitions in other sectors. Two Democrats joined 14 Republicans in signing the letter, which seeks a review from the Government Accountability Office of existing regulations. Under current law, foreign deals that may pose national security concerns go before the Committee on Foreign Investment in the U.S., a body made up of various administration agencies. The letter also warns of foreign investments in agribusiness and telecommunications, and includes some pointed commentary about the level of overseas money in the media business.

“Should the definition of national security be broadened to address concerns about propaganda and control of the media and ‘soft power’ institutions?” the letter writers ask at one point.

Derek Scissors, a scholar at the American Enterprise Institute, said that with China breaking records for U.S. investment it was inevitable that Congress would get involved.

“I think we’re gonna get Congressional hearings, and I think the entertainment industry is going to get pulled into it,” he said. “I’m not sure this is a serious threat, but I am sure the numbers are big enough that you’re gonna get Congressional questions about this.”

Spokespeople for Wanda and AMC declined to comment. However, an individual familiar with Wanda’s acquisitions process noted that the company follows strict regulatory guidelines and gets the necessary for approvals for its deals.

The prospect of greater government scrutiny comes as Hollywood studios have become increasingly interested in the Chinese market. The country is attractive both because it ranks as the second-largest market for films and because several financiers and conglomerates, such as Hony Capital, Tencent, and Wanda have shown an eagerness to invest in film slates and production entities. The letter may signal that AMC will face more hurdles as it seeks regulatory approval for its purchase of Carmike.

“This is the beginning of a much stronger response to Chinese investment in Hollywood,” said Aynne Kokas, an assistant professor of media studies at University of Virginia. “Historically, Hollywood has not needed any kind of protection from foreign investment because film remains a major U.S. export, but the amount of cash being infused by a small group of Chinese companies makes it potentially anti-competitive.”

In his statement, Rep. Smith quoted Dalian Wanda chairman Wang Jianlin as saying that he wants to “change the world where rules are set by foreigners.”

“If this is the case, we should worry about distorted news and entertainment content and restrictions on creative freedom,” Smith said. “We should worry that movies about Tibet will never again get made. Hollywood fought against the ‘black list,’ but will it accept without question the red-lining of scripts and content to show authoritarian China in the best possible light? It better not.”

Scissors suggested that Congress is unlikely to intervene in deals if Hollywood stays somewhat below the radar. But if a Hollywood studio were to release a film that conveyed overt Chinese propaganda, or if it sold itself to the Wanda Group, that could trigger a backlash.

“I would like to avoid Wanda for a little while,” Scissors said. “I’d go deal with somebody else who doesn’t have that big of a footprint. Be smart. Don’t pour oil on the fire.”

Wanda is facing political scrutiny at the local level as well. UNITE HERE Local 11 on Thursday filed complaints that Wanda is using foreign money to defeat a Beverly Hills ballot measure.

Lindsay Conner, chair of the media and entertainment group at Manatt, Phelps & Phillips, has worked on a number of deals between China and Hollywood, including slate deals involving Perfect World and Universal Pictures and STX and Huayi Brothers. He said that the blowback reminded him of the furor over Sony’s decision to buy Columbia Pictures  in 1989 and Matsushita’s  purchase of Universal in 1990; moves that triggered alarm about Japanese companies’ designs on the media business. A bruising presidential race between Hillary Clinton and Donald Trump may be stoking these fears, Conner argued.

“Hollywood has welcomed lot of investors from around the globe over the years without serious political interference,” said Conner. “So far, the same is true of the Chinese investment that is being welcomed.”

Conner said the rate of dealmaking hasn’t changed. But the backlash may be building, particularly as  lawmakers find themselves under more public pressure. Richard Berman, a lawyer, public relations executive, and former lobbyist, has launched a campaign called “China Owns Us,” that he believes will draw attention to what he views as a dangerous intimacy between media companies and the communist country. Berman is a controversial figure, having represented alcohol and tobacco companies in the past. Yet, he maintains that he is acting out as a concerned citizen.

“Wanda is not buying all these properties because they like buttered popcorn,” he said. “Something else is going on here.”

Berman tells Variety that the campaign has solicited some donations from a few friends with “security interests,” but that the campaign is mostly self-funded. In addition to a website, he’s put up two billboards in Los Angeles and Kansas City criticizing Wanda’s investment in AMC and has also has employed someone to lobby lawmakers. Berman said he felt that the issue was taking hold on Capital Hill and expects that a number of senators will echo the sentiments raised in the lawmakers’ letter.

“This thing has a life of its own,” he said. “The trajectory of interest is going up at a steep angle.”

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  1. Marie says:

    not really surprised but, I see a lot of people don’t know the difference between liberalism, socialism and communism. again, not really surprised.

    if hollywood was so anti-capitalism, there would be no bullsh-t action series worshiping guns, violence and war. anything starring Tom Cruise, Bruce Willis, Mel Gibson, Vin Diesel, etc. would simply not be.

  2. Donfitness says:

    Hopefully they will only use Chinese actors with English overdubs. Now that would be entertaining.

  3. Rex says:

    Lindsay Conner’s delusional if she thinks today’s China buying the American entertainment industry wholesale (among others drivers of the American economy) — one piece at a time — is ANYTHING like Japanese companies of the 80’s and 90’s purchasing a couple of flailing movie studios. Those companies were not OWNED by a full-blown COMMUNIST government, nor were they RUN by people secretly (and sometimes overtly) loyal to the COMMUNIST government that raised them. And Japan by the late 80’s was an entirely different beast than Mainland China of today. It isn’t just about acquisitions this time around.

  4. Rex says:

    To everyone drawing the laziest of comparisons here, there’s a BIG difference between Hollywood Liberals living in a democracy and Mainland Chinese COMMUNISTS who grew up in a COMMUNIST STATE. Taking over your entertainment industry was the easiest way in, thanks to those very liberals who run the place, but watch how fast they turn when China starts DICTATING what will play in all the American theatres IT OWNS now. And let’s face it, this isn’t just limited to movie studios and theaters; they’ve been buying up corporations and factories for the past decade or more, just like the CCP has encouraged them to do. If Americans could stop shooting each other and living on social media for five minutes, they’d smell the REAL threat taking over right under their friggin’ noses!

  5. apollyon911 says:

    It will be an improvement. (((Hollywood))) has been promoting Leftist propaganda for decades against Whites, Christians, Males, Conservatives, etc.

    The Chinese are decidedly less hostile.

  6. Robert What? says:

    What happened to the “diversity is our strength” message Hollywood have been selling us for many years. Guess it applies to us, not to them?

  7. Joe Smith says:

    lolololol our (((friends))) have been attacking America, her traditions, her people, her faith in ways that bugger belief – frankly we couldn’t possibly have worse “foreign” control if you designed your very own Hollywood (((villain))) to do so.

  8. Ha, that’s special, now they’re worried about propaganda from liberal Hollywood.
    Little late for that folks.

  9. Epaminondas says:

    Commies were hammering at the gates of Hollywood by the late forties. The broke in during the fifties and sixties. By 1980, Hollywood was firmly in the hands of the leftists. When Eastwood dies, there will be no conservatives left.

  10. David says:

    I think they should worry about the propaganda being spewed on NBC, CBS, MSNBC, and FOX first.

  11. All the Hollytards have produced is propaganda. Even now as you celebrate your naked Emperor, he is soon to be disposed to the rubbish bin of history as the most moronic choice a country ever made.

  12. Mike Little says:

    Like the communist didn’t take over Hollywood years ago.

  13. John Charles says:

    We are worried about propaganda? What do they think the Hollywood Progressive/Marxists who control America’s entire entertainment industry have been doing for 50 years? Our threat is not from foreign enemies, but a subversive agenda from within. “Fundamental transformation of the United States of America” – – – remember?

  14. HenryC says:

    I am currently more worried about the current progressive propaganda coming out of Hollywood rather than the off chance of Middle Kingdom propaganda.The relentless progressive cultural attack against the conservative Christian mores which this country maintained for most of its existence and which helped produce a stable wealthy nation.

  15. Ameri-CAN says:

    I, personally, have no desire to “strengthen ties to the Middle Kingdom”. The US is giving up way too much control over American culture to foreign control. Yes, we are a melting pot but THEY are supposed to assimilate HERE, not try to pull us into THEIR culture. We are accused of being “racially insensitive” for the likes of Taco Tuesday!

  16. What about jewish control of Hollywood? Why isn’t Kahngress concerned about THAT?

  17. Paul says:

    Propaganda from Hollywood?????

  18. sjmwilco says:

    so ‘lawmakers’ are worried about hollywierd churning out propaganda. exactly how would that be different than what they do now?

  19. Theosebes Goodfellow says:

    The humor of this cannot be overlooked. Leftist Hollywood is getting in bed with communist China. It will be verboten to show the Chi-comms in a negative light ever again. Geesh, if only the Muslims had figured this out and bought up Tinseltown, we’d never would have had jihadists as bad guys.

    Oh well, at least they’ll still have Christians and conservatives to kick around.

  20. They have witnessed the absolute retardation of our economy and culture thru manipulation via the “idiot rectangle” and want in. Cant say I blame them. Its an obvious progression on a country in regression.

  21. Beth CP says:

    Hollywood will only make a fuss and say “Oh, no! You can’t do that!” when the Chinese government itself wields it’s influence via it’s sheep in wolves clothing front men on actual productions (if they’re not already). Can you imagine the outcry of directors/producers (and the actors themselves), when Bejing decides to step in and have a say as to how a film shall depict violence or sex or censors something they deem unhealthy for consumer consumption……They’re doing it in China proper right now, running films through what is essentially an “approval board”. But entertainment power players see mainly dollar signs. That Hollywood regularly tracks in propaganda is a known quantity. But when they cozy up to the current regime in China, they’ll get a taste of their own bile double fold.

  22. James Walker says:

    Umm…Hollywood has already sold out to China on multiple occasions…and Let’s just ignore the fact US/China relations are soley and completley due to Bush Sr being shortsighted and not understanding who he was letting into the house…and said relations really should have been cutoff after Tiananmen and the fall of the Deng Xiaoping movement/succession

  23. Dave Sharp says:

    Worry about propaganda? Surely it cannot be any worse than the moral and political propaganda we already endure from the Hollywood perspective.

  24. Sigmund says:

    Our politicans are mostly owned by vested interests… Of course Hollywood is.

  25. Carl Quick says:

    The Chinese are your new masters. Get used to it, America. You are no longer policeman of the world. The Roman-British Empire has moved its slave operations, again, this time from USA to China.
    USA still has a chance to escape the slavery, Google Exempt income or Excluded income, find US tax regulation, then obey it by sending them NOTHING.

  26. Richard S Zoppo says:

    This will simply be a meeting of like minds. Communists of a feather will flock together.

  27. WHAT? Congress is worried about propaganda coming out of Hollywood NOW? What about all the propaganda they ave been spreading for the last 50 years?

  28. How much worse can the Chinese propaganda be compared with the rampant Leftist, anti-American politically correct propaganda that already oozes from everything that comes out of Hollywood? So politicians don’t worry about home grown propaganda?

  29. odinsacolyte says:

    You know McCarthy actually did uncover communist agents in Hollywood. Clearly they are still there.
    Their attitudes are the reason so many of us spit on their work and of course their celebrity brings politicians into the sphere in influence. Witness the decline of freedom and the rise of PC and the ‘papers please’ era. The future looks grim if the the people don’t man up and take ’em down. Remind all of them who they really work for. The government is owned by the people who pay their bills. Remind them of it. Make them feel it.

  30. jaz says:

    I actually laughed when I read this article. Hollywood? You’ve been churning out leftist propaganda since the beginning. What are the Chinese going to do? Force you to churn out leftist propaganda?

  31. Veteran and Patriot says:

    So where have you been for the last 50 years? Hollywood has been putting our left wing propaganda as long as I can remember. From cramming homosexuality down our throats to the continual depiction of white men as weak, dangerous, evil, while women and black men are always seen as heroic or balanced characters. Why not Chinese political propaganda? Makes people rich and pushes the anti-traditional points of view. I thought all hollywood backers would be overjoyed.

  32. Joe E in the IE says:

    As opposed to 60 years of slavish obedient service to one American political party.

  33. Brian Gibbs says:

    I’m afraid that “that train left the station” nearly 75 years ago. Even the old Frank Capra movies of the 30’s appealed to the most base instincts of human nature as they “cashed in” on envy. The wealthy, depicted as bankers and businessmen always had nefarious intent and smoked big cigars. While the human race is driven by varying degrees of positive envy (i.e. the motivation to honestly attain that which others have honestly attained) “entertainment” showcased the ugly green kind of envy that made people feel good about the “schmuck” that gets “lucky” and heaping laughable failure and scorn on those that achieved as though finally “one of them” got their’s. It was alright until the academic socialists calling themselves “progressives” brought that foolishness into the universities as the ideology of cultural Marxism. Simply put, the message of Mao has always been safe in Hollywood and those that the emotional basket cases support in politics.

  34. Sylvester Brock says:

    Well, anything would be an improvement.

  35. Mitch Z. says:

    The pretend commies are letting the REAL COMMIES buy them out. But these REAL COMMIES are also a serious enemy. The U.S. China policy is nothing short of masochistic lunacy; we’ve helped create and nurture our own demonic killer!

  36. resistancenow says:

    We already get propaganda from the lunatics running Hollywood,

  37. Koczani says:

    Propaganda? Hollywood has been the propaganda arm of the left for years.

  38. Ban Zan says:

    Too bloody late!!!!!!

  39. says:

    we already are getting propaganda from hollyweird. Just look at their ads against Trump.

  40. atilla thehun says:

    You need to take that thinking 5 more steps and discover the flaws.

  41. atilla thehun says:

    What is new about propaganda in the Hollywood film industry? It’s been the progressives’ MO for 50 years.

  42. Informed_voter says:

    China virtually owns the US in the past few years by having not only loaned America money but bought uo more than 50% of our deficit under Obama. If they call in their loans, America would enter its darkest moment, even worst than our Great Depression.

  43. cleo48 says:

    Bah. It couldn’t get any worse. Americans are already turning away from their sewage in entertainment and media. If the Chinese want to give it a try, go ahead.

  44. Scott Emerson says:

    This comes down to who controls the Hollywood propaganda machine. Now that the liberals fear the loss of control they run to Congress for help.

    Maybe if the Chinese controlled it there might be less “I hate America” themes. It would be interesting to see if there is a difference and what that difference would look like.

  45. wholy1 says:

    DUH! WEIN – What else is new. Sillywood WAS/IS/WILL BE propaganda! LegisTRAITORS just faking concern.

  46. TinCanSailor says:

    Wow, my wife is Jewish and I never realized her actual purpose was world domination… I thought it was just domination of me! Thanks for the anti-Semitic heads-up!

  47. bill1942 says:

    It is somewhat reassuring that something can raise alarms in this Congress. They seem to haven asleep at the wheel for the past 8 years while our country was being driven into the ground.
    Vote for TRUMP in 2016

  48. Paul McFadden says:

    Hollywood has been presenting one sided distorted views for quite a long time. Their objectivity has been tainted with liberalism for years and is now blatantly out in the open. I don’t know why Congress is worried about the Chinese buying into Hollywood and possibly “tainting” or controlling the studio’s message or content. Hell, the US government already let them buy IBM’s PC technology, guided missile technology, numerous US manufacturing businesses and one of the largest US meat suppliers. And of course high tech companies like Apple manufacture in China to cut costs so their technology secrets are no lonerg secret to the Chinese government. Thanks to our watchdogs in Congress and the US government, China already has control of a large part of our business real estate, technology, and food chain supply.
    But now Congress is worried about China taking over control of Hollywood and tainting the content?
    The horse has long been out of the barn with regards to a useless watch dog US government protecting our US interests. The Chinese know that our Congress isn’t going to stop them. They never have, whether it is top secret government or commercial technology, the Chinese can pretty much buy or take whatever they want. Good bye, Hollywood.

  49. Mike Smith says:

    What a crock ! Compared to what we are getting now ? Would be refreshing.

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