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Chinese reaffirm local focus

Progress slow on distrib'n, piracy fronts

The U.S. majors are keen to negotiate a new contract for the distribution of their films in China this year, and to persuade the Chinese government to clamp down on the piracy of Hollywood product with as much force as it expends on protecting local pics.

But some studio reps are not optimistic of making much progress on either count, particularly after December’s appointment of a new minister atop the powerful State Administration of Radio, Film and Television (Sarft).

A recent speech by Minister Wang Taihua, a former Communist party chief, who also serves as vice-director of the Propaganda Ministry, caused concern among U.S. execs.

Speaking at the Hengdian studios, where Zhang Yimou’s “Hero” was lensed, Wang praised the upturn in the Chinese film industry’s quality and output, and identified film as an important part of the development of the “modern Chinese socialist culture.”

According to one U.S. rep who read a transcript of the speech, Wang said Chinese films had an obligation to “crush the conspiracy of Westernization, differentiation and penetration of Western hostile forces.”

Wang also stressed the need for Chinese films to compete at an international level so that Chinese culture can be promoted globally, and said films must strike a balance between social benefit and financial reward.

“We haven’t seen such an extreme statement from Chinese officials in a public speech since 1989,” that exec told Variety. “It seems Sarft is so excited by the success of local products like ‘House of Flying Daggers,’ ‘World Without Thieves’ and ‘Kung Fu Hustle,’ it is determined to see the market to continue to shift that way.

“Our guess is that the negotiations between the Motion Picture Assn. and Sarft on a master contract won’t be easy this year, and we shouldn’t expect the authorities to make the same efforts to crush piracy of MPA titles as they do for key domestic titles.”

The MPA companies have not finalized their proposals for a new distrib deal but they have long been pushing for a sizable hike in their share of the B.O., which has been stuck at 13% for some years. And they’ve repeatedly asked for an increase in the unofficial import quota of 20 revenue-sharing films per year.

Exhibs in China contend there are not enough U.S. films or homegrown hits such as Sony’s action-comedy “Kung Fu Hustle” (which has minted a socko $19.9 million in six weeks) to sustain their business.

One China Film Group source implied Wang was not signaling any shift in government policy and told Variety he doubted there would be any major changes.

But another U.S. exec declared last week, “There is a real debate now within the top levels of the film hierarchy as to what reforms/changes should be implemented in film distribution in China. At stake is whether the film business in 2005 is an ‘industry’ that should be treated like others in China that have been reformed, depoliticized and subjected to market conditions and realities. Or is it still to be seen as a tool and toy of the propaganda and political hierarchy, which means it will continue to be protected and manipulated for what they describe as social goals and concepts?

“Moves such as implementing a ratings system, changing the levels and structure of film imports, and discussions/negotiations with the MPA on piracy controls and distribution deal terms are being caught up in this internal dialogue and it’s not yet clear how much, if any, progress can be expected in 2005.”

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