China to widen U.S. film imports

Restrictions loosen in major deal late Friday

The U.S. and China have agreed to significantly increase market access to U.S. movies, an effort to resolve a long-lingering trade dispute before the World Trade Organization.

After Vice President Joseph Biden spent Friday with Chinese Vice President Xi Jingping at a series of events in Los Angeles, the White House said that the agreement “will allow significantly more job-supporting U.S. film exports to China and provide fairer compensation to U.S. film producers for the movies being shown there.”

Effective immediately, China will allow an additional 14 “enhanced” films – such as those in IMAX or 3D – to enter the country each year. That adds to the current cap of 20 pics the country lets in annually.

China will also allow U.S. companies to receive 25% of the Chinese box office back on imported films – an increase from the current rate of 13%.

“The agreement with China will make it easier than ever before for U.S. studios and independent filmmakers to reach the fast growing Chinese audience, supporting thousands of American jobs in and around the film industry,” Biden said in a statement.

In 2009, the World Trade Organization ruled against Chinese restrictions on the importation and distribution of films, DVDs, music, books and journals, but little has changed since.

In a statement, U.S. Trade Representative Ron Kirk said the agreement “will help to change that, boosting one of America’s strongest export sectors in one of our largest export markets.”

MPAA chairman Chris Dodd said that the agreement was a “major step forward in spurring the growth of U.S. exports to China.

“This landmark agreement will return a much better share of the U.S. box office revenues to U.S. studios, revising a two-decade-old formula that kept those revenues woefully under normal commercial terms, and it will put into place a mechanism that will allow over 50% more films into the Chinese market.”

Walt Disney Co. CEO Robert Iger said the agreement “represents a significant opportunity to provide Chinese audiences increased access to our films.”

The agreement will be reviewed after 5 years, and the U.S. can return to the WTO to seek relief.

The policy changes cap off a flurry of China-related media news this week, as China’s next leader, VP Xi Jinping, wraps up his visit to the U.S. with a stop in Los Angeles. On Wednesday, news broke that DreamWorks Animation had teamed with Chinese state media groups China Media Capital, Shanghai Media Group and Shanghai Alliance Investment to build a Shanghai-based studio.

Jean Prewitt, CEO of the Independent Film & Television Alliance, said that “for the first time, through this agreement, there is a promise of creating a commercial foundation that will allow independent producers to participate more fully in the Chinese marketplace.”

She added that “China has committed to allowing new local companies to engage in local distribution, to introducing transparency into censorship and importation decisions, and to offering terms and conditions equivalent to comparable markets such as France and Germany.”