China’s Wanda & Hollywood: Questions and Skepticism

October 1, 2013

There’s a saying I often hear when it comes to big business in China: The bigger the announcement, the less real the deal. So it’s no wonder that when Dalian Wanda Group‘s Wang Jianlin said he was going to buy AMC in 2012, folks were skeptical. And then, $2.6B later, he became the world’s largest movie theater owner last September. Now, the Wanda boss has unveiled even more ambitious plans to bring Hollywood closer to China when, surrounded by a Hollywood’s who’s who, he broke ground on the $8.2B Qingdao Oriental Movie Metropolis complex this weekend. Wanda separately unveiled plans to build a $4.9B Cultural Tourism City in Wuxi with theme park and movie elements. Now, it’s important to balance the hoopla with the understanding that Wang Jianlin’s core business is real estate. In China, access to prime property is overseen by a government which wants to see development. That’s why some see this as a land grab wrapped in a Hollywood story.

Wang Jianlin, China's richest man, Chairman of the Dalian Wanda Group, one of China's largest real estate developers, and also the world's largest operator of movie theaters after the purchase of AMC Entertainment Holdings for US$ 2.6 billion in 2013.

Wang Jianlin, China’s richest man, Chairman of the Dalian Wanda Group, one of China’s largest real estate developers, and also the world’s largest operator of movie theaters after the purchase of AMC Entertainment Holdings for US$ 2.6 billion in 2013.

Hollywood turned out in force for the unveiling of the Movie Metropolis complex, with moguls like Harvey Weinsten and Patrick Wachsberger, and stars from Nicole Kidman to Leonardo DiCaprio and John Travolta rubbing elbows with China’s richest man (rumors that talent was paid 7-figure appearance fees were refuted). Even AMPAS president Cheryl Boone-Isaacs was there, on the heels of a $20M donation from Wanda. The Movie Metropolis complex will create 10,000 square meters of studios, a film museum, movie theaters, resort hotels and other “cultural tourism projects.” It will open in June 2016 and be fully operational in 2017. Wanda also announced plans to bring in over 50 domestic production companies to make 100 films and TV shows per year, with another 30 foreign movies expected to be made in China, which was a reason that some talent agency honchos made the long trip; as well as to support talent and see the level of Wanda’s commitment. Among those present was UTA CEO Jeremy Zimmer.

Part of the blueprint for the proposed Qingdao Oriental Movie Metropolis complex.

Part of the blueprint for the proposed Qingdao Oriental Movie Metropolis complex.

Many came away from the spectacle feeling Wanda has a chance to pull off its grand plans, based on its track record for follow through. But no one forgets that Reliance had the same rep and a giant Bollywood business behind it when it stepped up in Hollywood, made pricey first look deals with the biggest stars and directors, and five years later has nothing to show for it. The investment in Chinese infrastructure, some said, gives Hollywood an opportunity to get a foothold, helping China gain experience in making big movies.

The carrot for Hollywood has always been obvious: the Chinese movie market is the largest underserved audience in the world. Cinemas are being built at a breakneck pace and the country’s annual box office receipts are expected to overtake North America’s by 2018. It will double U.S. results by 2023. “The future of the development of the world film market is right here in China,” said Wanda in a statement.

Hollywood wants a piece of the action, but already there are growing pains that will continue to make studio executives question what they are getting into. After all of the recent reportage on how Hollywood softened messages in movies to appease the Nazis in the run-up to WWII so Hollywood films could be shown in Germany, will studios shy from hot button topics for fear they will be locked out of China? In addition, a deal to loosen restrictions on foreign imports hasn’t stopped the state authority from issuing unofficial blackout periods, cannibalizing U.S. business by pitting event movies against one another, and censoring or yanking movies from theaters with little explanation. These moves are in part attributed to a desire to give the upper hand to local language product.

Wanda’s move into Hollywood production begins with Keanu Reeves’ directorial debut Man Of Tai Chi and some wonder if the corporation’s clout could lead to a slew of co-productions in hopes of circumventing governmental red tape. The local authority SAPPRFT is the gatekeeper and answers to the highest echelons of China’s government. “Wanda has to play like everybody else,” an exec says.

“What’s interesting and useful is that Wang Jianlin is one of the most powerful men in China and he’s deeply committed to making China’s presence in the world market more significant,” said an executive.

A lot of rough spots have to be smoothed before Hollywood studios head for the Far East. Few would go without the co-production status that gives films a shot at the lucrative Chinese market. China has no subsidies or tax breaks like in Europe and while labor is cheaper, crews and equipment aren’t as good.

As for the potential of self-censorship by pandering studios, former AMPAS president and Jiaflix chairman Sid Ganis — working with Paramount on Transformers 4 in China — said that “No filmmaker I know of would do it that way. They might very well try to accommodate the needs of SARFT (now SAPPRFT) and those who judge, but a filmmaker is going to do it with integrity or he or she shouldn’t be filmmakers.” Another person says, “People cut films for China all the time. I’m not sure what they cut makes it worse for the West… I don’t think of it as watered down, I think of it as global.”

Ganis says what Wanda is trying to do “seems to make sense… Wang has deep pockets and his incredibly successful Wanda has the means to do things in a big, grand way… They are to be taken seriously.”

In a particularly notable soundbyte, Wang commented on China’s place at the center of the global movie business on Sunday, saying, “Those in the world film industry who realize this first and are among the first to cooperate with China will be the first to reap the benefits.”

(By NANCY TARTAGLIONE, International Editor of, 25 September 2013)