Trump Threatens Hollywood's Growth in China
Bloomberg Businessweek|February 13 - February 19, 2017

"There is a disconnect between what Trump ... might want to do and what Hollywood wants.”

Jeanne Yang
Trump Threatens Hollywood's Growth in China

During a visit to Los Angeles five years ago this month, China’s Xi Jinping gave Hollywood a much-needed shot in the arm. The incoming Chinese leader agreed to ease an almost 20-year-old quota on American films, nearly doubling both the number of U.S. movies imported to China and Hollywood studios’ share of the box office receipts—a deal that temporarily settled a World Trade Organization case the U.S. brought against China.

There was an understanding that in 2017 the two nations would return to the table to increase the compensation to U.S. movie makers and for China to open its market further. But now President Trump’s rhetoric on China’s trade practices has some executives worried that the film industry won’t get its happy ending after all.

The Trump administration is creating uncertainty and “making everybody very, very nervous,” says Geetha Ranganathan, an analyst at Bloomberg Intelligence. The renegotiation “could be a casualty if he really wants to come down hard on it.”

That would be bad news for movie companies on both sides of the Pacific, which have become increasingly interdependent since the 2012 accord. Chinese money has financed Hollywood blockbusters including installments of the Transformers, Mission: Impossible, and Fast & Furious franchises. Chinese conglomerate Dalian Wanda Group went on a buying spree to become the largest theater operator in the U.S. and also paid $3.5 billion for its own American film production house, Legendary Entertainment. And while the U.S. box office is stagnating, China’s market has been growing at an unparalleled rate—boosting global receipts for the small number of American films shown there.

This story is from the February 13 - February 19, 2017 edition of Bloomberg Businessweek.

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This story is from the February 13 - February 19, 2017 edition of Bloomberg Businessweek.

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