Hollywood, China & Cold War 2, with The Wall Street Journal’s Erich Scwartzel
On this podcast, we spend a lot of time discussing the rising threat from China and Cold War 2. We’ve hosted Matt Pottinger (episode #28), Josh Rogin (episode #17), and Admiral Stravidis (episode #44). We’ve also done an episode on the future of the movie industry, with John Podhoretz (episode #16).
But what do China – and specifically Cold War II – and Hollywood have to do with one another? You may not have realized it, but when you watch movies like Skyfall, Mission Impossible III and World War Z, to name a few, you are watching a strange relationship at work between the Chinese Communist Party and one of America’s most influential exporters.
It’s the fascinating and richly reported story told by Erich Schwartzel in his new book, Red Carpet: Hollywood, China, and the Global Battle for Cultural Supremacy. Erich has reported on the film industry for the past decade for The Wall Street Journal. He’s based in the Journal’s LA bureau. Previously, he reported for The Pittsburgh Post-Gazette where he wrote extensively on the environment and the burgeoning energy industry there.
Transcript
DISCLAIMER: THIS TRANSCRIPT HAS BEEN CREATED USING AI TECHNOLOGY AND MAY NOT REFLECT 100% ACCURACY.
[00:00:00] That collision of the short term gains and the long term planning is ultimately the humbling of Hollywood here. I have yet to find any executive who has said to me, I'm really disturbed by what's happening and I want to do something about it. Whether it's try to move more of my business away from there, I want to make a movie about it, something that kind of proactive.
I have yet to see on this podcast, we spend a lot of time discussing the rising threat from China and cold war to we've done episodes with Matt Pottinger and Admiral Stravides. We've also had an episode on the future of the movie industry with John pot hordes, but what do China and specifically cold war two and Hollywood have to do with one another?
You may not have realized it, but when you watch movies like [00:01:00] skyfall or mission impossible three or almost a decade ago, world war Z. To name a few, you're watching a strange relationship at work between the Chinese Communist Party and one of America's most influential exporters. It's the fascinating and richly reported story told by Eric Schwartzel in his new book, Red Carpet, Hollywood, China, and the Global Battle for Cultural Supremacy.
Eric has reported on the film industry for the past decade for the Wall Street Journal. He's based in the journal's LA bureau. Previously, he worked for the Pittsburgh Post Gazette where he wrote extensively on the environment and the burgeoning energy industry there. To set this up, the dynamic we have today is that Hollywood often depends on two important inputs for their business model in making blockbuster films.
Capital from China. to finance production of the films and access to audiences in China. Basically, they want to be in Chinese movie theaters. And the Chinese Communist Party [00:02:00] has, shall we say, strong views on the content of these films coming out of Hollywood. And they've been also trying to develop their own.
Domestic moviemaking market as Eric writes in his book China is now home to the number one box office in the world home to grosses that routinely near 1 billion dollars a market that's become too big to ignore and too lucrative to anger That's Eric Schwartzel. This is Call Me Back, and I'm pleased to welcome Eric Schwartzel of the Wall Street Journal and author of the just released red carpet, Hollywood, China, and the Global Battle for Cultural Supremacy to the podcast.
Eric, thanks for joining us. Hi, I'm thrilled to be here. Thank you. So, so I want just, um, for our listeners to just set up the, the, the saga you write about. And, and I want to do that using these, [00:03:00] these two bookends of your story, uh, which you describe in the book. The first is the release of Top Gun. In 1986 by Paramount, which was peak Reagan era America.
I loved it. I loved, I like probably watched it hundreds of times. Uh, during the pandemic, I made my kids watch it. Uh, like I, I was a top guy. I can quote from it extensively and was, was so anticipating with such excitement. Top Gun Two, the sequel that's supposed to be released in May of this year. Uh, Maverick.
And after reading your book, I'm kind of heartbroken, uh, about my, my sort of pathetic anticipation for the sequel to Top Gun. And so, oh, yikes. I've ruined Top Gun for you. You've ruined, you've ruined that in many movies for me, but, but I don't want to digress. I don't wanna hold it against you. So can you explain what happened as it relates [00:04:00] to Hollywood?
And China, between the release of the first Top Gun and the second Top Gun, or the upcoming release of the second Top Gun, not like, just explain the, the Paramount's experience with that movie and dealing with China. Well yeah, and I think the first thing to understand it, as you said, is the first Top Gun comes out in 1986.
It is the ultimate emblem of Reaganism on screen. The script is made with the collaboration of the U. S. Navy. And not only that, but it also is such a symbol of the power of cinema. I mean, Ray Ban sales shoot up after that movie comes out. More men and women enlist in the armed forces after that movie comes out.
It really, I think you wrote that they're like, there are recruiters for the Navy hanging out at movie theaters. Yeah, recruiters would wait outside the theater. So the movie actually was a more successful enlistment campaign than traditional enlistment campaigns were at that time. And, and this is also an era, I [00:05:00] call it the rah rah era of American movies because they were the most powerful medium in the world.
They were making hundreds of millions of dollars for these studios, and they were also presenting a very specific image of America to audiences around the world. And Tom Cruise and Top Gun is the pinnacle of that. Now, cut to 2017, 2018, when Paramount announces that they, like every studio in town, is, are dusting off the library, seeing what they can do to reboot.
Some of these beloved franchises, and they announce a sequel that's also, that's going to star a much older Tom Cruise, to Top Gun. And when promotional material for this new movie came out, people noticed a difference in the jacket that Tom Cruise's character Maverick, the perfectly named Maverick. Wears in this movie because in the original film, the jacket has patches on the back that allude to the tour of the USS Galveston.
And now just explain, [00:06:00] explain what the USS Galveston, the, the, the, the significance of that, that particular, the Galveston as it relates to Pacific countries in the Pacific. Right. So, so, um, it, it sort of has these, these patches that represent its tour, including, its its presence in Japan and Taiwan. Um, and, and whenever Tom Cruise suited up in the original Top Gun, that was, that was not a problem.
However, a very big change had come to Hollywood between that Top Gun and the new Top Gun. And that is the fact that China's box office was growing to become the largest in the world. And in those 20, 25 years, 30 years, China had made it clear that crossing it politically was going to result in economic ramifications.
And so when Tom Cruise suited up a second time in the economic reality of 2018, those patches were removed because there's, as you know, better than pretty much anyone, there are a lot of [00:07:00] territorial issues with Taiwan, and Japan and China have always had Tensions over the past several decades. And so, the Chinese audience might not show up if those patches were there.
The Chinese censors might not let the movie into the country. And the Chinese financing that was funding the new Top Gun. Could also be jeopardized. And so the solution was a bit of an economic no brainer. They took the patches off. And so suddenly you had this movie that, as you said, is this emblem of Americana on screen.
Instead, bowing to the one China policy. So you write, you write in the book, and I quote here, the arc of China's influence is evident in a single Hollywood franchise, Top Gun, in which the geopolitical tension of the next century came to be reflected in a two inch patch sewn onto a movie stars or costume.
Uh, so. [00:08:00] It started with Taiwan, right? The Chinese officials made it clear through, I think, intermediaries that they had a problem with Taiwan, uh, which, you know, being represented as an independent sovereign nation rather than. Reflected of the one China, uh, the one China policy. And then they, and then while they were at it, they're like, you know, we, from time to time, there's tensions between China and Japan.
So it was conveyed. I think through, again, through intermediaries that, you know, it's probably not good to include Japan on there. And they just, it was like, it was like bit by bit. They just, the, the paramount was being dictated to what could and couldn't be in Top Gun, the sequel. Right. I mean, it's like, I guess like, yeah, while you have the sewing machine out.
Let's just take care of anything. And I think, I think it speaks to, um, a reality of working in Hollywood or really, frankly, working in any business today that does work with China, which is the risk assessment, right? There's, there's no edict coming from Beijing to take [00:09:00] these patches off of Tom Cruise's jacket.
But by now, Hollywood has absorbed so many cautionary tales. from other studios that have run into trouble with similar political issues, that a self censorship has taken root. And I also think that the risk assessment with a movie as big as Top Gun and one as expensive as Top Gun, which will cost about 150 million to produce, I'd say probably more than 200.
And then when you add in marketing and advertising, um, it gets It gets probably close to 300 in total expenses and in a movie that big in today's Hollywood. isn't greenlit without an expectation that it will make some money in China. And so you have to protect that, um, that access. Okay. So I want, I want to then move back.
First of all, I just, you and I talked previously about just, I just want to spend a minute on the [00:10:00] role that American film has played in projecting America's story globally. It's that's a it's a big topic, but I just wanted like just do a minute or two just to because I think it's important for some of these films we're going to talk about and then what what what China tried to replicate.
So can you just describe? And this will be familiar to a lot of our listeners, but can you just describe the role that Hollywood plays in the global perception of America? You know, you write about Joe Nye, Joseph Nye, talking about American soft power. Yes, one of my favorite experiences of reporting this book was asking Joe Nye if he has seen a Transformers film.
So, yeah, not a question I think he's ever gotten before. But, um, you're absolutely right, and it's It starts in World War One, um, when European film capitals that until then had been more sophisticated than America's entertainment industry, really had to hit pause because of the fighting that broke out across the continent.
And so during World War One, we saw [00:11:00] America really quickly catch up in terms of the kinds of movies it was able to make. And then Around World War II, you had this shift toward the movie being some kind of, really frankly, being a soft power tool. Because after World War II, with the start of the Marshall Plan, movies were shipped to Europe to either convey the argument for a unified Europe, or to celebrate the glories of capitalism or democracy.
There was this idea that movies could Serve a function beyond entertainment and I think also that is where we really started to Imagine Hollywood as a de facto arm of America and and certainly of course through the 70s with the the rise of the American blockbuster you have an economic domination along with that cultural domination Where no movies globally are [00:12:00] making as much money, no movies are selling as many tickets as something like Jaws or Star Wars is.
And then the 80s is a fascinating time too, because The movies are being shipped around the world. They're selling more tickets than anyone, but they're also being kind of conscripted into broader ideological battles, right? Like remember all of the movies around that time, around the Top Gun time where the Soviet villains were portrayed on screen.
And, and I think Hollywood today is a little out of step with the expectations that were set over the last century, because. When you talk to executives here in Los Angeles today, they see themselves as, frankly, running global companies. Not necessarily running companies that should be doing America's bidding or really that worried about Making sure it's they're presenting America in the best light because the products they're putting out in the global [00:13:00] marketplace Are selling tickets to people around the world But because we have this history especially during wartime of seeing the movies as these soft power Vehicles, I think there's still an expectation and that's why so so often News of like a Top Gun censorship rubs so many people the wrong way because it's not what we've expected the movies to do Yeah, my friend Roger Bennett.
Who's a who's a Sports journalist from England from Liverpool who now lives here in New York, and he he became obsessed He recently came out with a book called Reborn in the USA which came out around July 4th, and he talks about growing up in Liverpool And falling in love with America through like Miami Vice and through, you know, different movies and that became America to him and that, that was part of not, you know, one of the reasons, one of his big motivations for wanting to come here that so many people around the world understood America through this content.
Oh, exactly. It was, uh, I, I, I [00:14:00] think it, I think it's Joseph Nye who coined the phrase an empire by invitation. So I now tell us. Take us to China, uh, during the second half of the 20th century and, and particularly Mao. So Mao Zedong's rise and the way he viewed the role of creative arts in Chinese society.
So he, um, so we see a template set by Mao that is still followed today. And, and this is clearest in a series of lectures that he gave in 1942 where he, In describing his ideal communist state talked about art's role in it. And he said, there is no such thing as art for art's sake. It is art will serve the state.
And so there's even these stories of, um, during the, the, the cultural revolution, if there was a painting of, let's say like a, like a, a pastoral scene, like a rural farm or [00:15:00] something, they would take that off the wall and then paint power lines. atop the scene so that it looked like it was reflecting the the boom times that they were living through and there's this museum I'm, not sure if you've been there.
It's it's quite popular among among visitors, but there's a museum in shanghai of Propaganda art throughout the decades. Yeah, and it is just fascinating because it shows you just how closely State sanctioned art has mirrored Government priorities in China, you know, you can walk through it and it's it's all laid out chronologically.
So You know, during the, the civil rights unrest of the 60s, all of this Chinese art is produced highlighting the inequities in America for African Americans as a way, as a sort of veiled commentary on how messy that system is compared to the egalitarian American. Communist system. Um, you know, in the, in the [00:16:00] 80s and 90s, when China wants to bolster its space program, there are suddenly posters everywhere of people zipping through the stars.
I mean, there really has always been, like, two sides of the same coin. I remember, and, and so, this was very helpful for me because I started to see it in the movies that China was making as well. I have a A story in the book about going to Shanghai in the summer of 2019 and staying in a hotel that would get, uh, copies of People's Daily, the state, uh, state media outlet.
And I was reading it over breakfast one morning, and there was a little feature about Xi Jinping, uh, about Vladimir Putin sending Xi Jinping ice cream for his birthday. And later that night, I went to a party for a movie that was coming out. There was going to be the first ever Russia China co production and it was about how the two countries worked together on screen.
So we started to see on screen a reflection of the kind of the bilateral agreements or the government priorities that China was [00:17:00] curating off screen as well. And so after, after the cultural revolution, we start to see an intrusion because in the nineties, as China's economy starts to open up more generally, and you have, um, you have sort of the post Mao era, the Deng Xiaoping era of like opening up to the world, Hollywood starts to come in and suddenly this, there is no such thing as art for art's model has to contend.
With the appeal and competition of this American medium that over a hundred years has become so culturally dominant. And I think you say that up until 1994, their, their Chinese movie theaters were largely closed off to American films. Right. And there were very few, I mean, it's hard to imagine given the population, but it was a dramatically underscreened market too.
And, and, and today China's is largest. box office in the world for U. S. [00:18:00] films, right? It is. Oh, not for, well, I don't know. I guess it would be for U. S. films in COVID times. It's the, they sell more tickets and make more money on ticket sales than any country in the world. And they have more screens now as well.
Okay. So now I want to fast forward to 2008. Which seems like a key moment. It's weeks after the 2008 Summer Olympics, uh, which is timely because here we are now back in the Olympics in China, uh, while we're recording this. So it's 2008, it's just after the 2008 Summer Olympics. Chinese officials Hollywood.
And this is, as I said, it's a pivotal moment in your book. Tell us why they came to Hollywood and what they were trying to accomplish. I couldn't believe this when I found it. So in, in 2008, I'd say the Chinese box office has shown some real promise. We've seen movies like Titanic come out and do really well there.
And it doesn't take a Harvard MBA to see that there's a lot of growth there. [00:19:00] Um, And so, and China's obviously pounding its chest with the, the Summer Olympics, and there's just really, they're just sort of meeting a moment in history there. And, sort of happening out of sight, in a classroom at UCLA, a group of Chinese, Officials and entertainment executives travel to Los Angeles and literally sit in a classroom as studio executives, agents, and producers come through to tell them how the Hollywood system is set up and how it works.
And one element that you hear a lot whenever you're talking about U. S. China economic ties is this concept of technology transfer. And the Requirement that access to the Chinese market or financing from Chinese firms is going to require kind of handing over of technology and know how, and it's very easy to understand when you're talking about Boeing, how that how that works.
But a question I always [00:20:00] had is, well, what? How do you transfer the technology of storytelling and the appeal of hearts and minds campaigns? How does that work? And here you had it. Chinese officials sitting in a classroom taking notes on how movies are put together and how studio systems work, how they release the films into theaters, how they market the films.
And it's really the start of a decade of technology transfer that we start to see where, in exchange for access to the Chinese market or the Chinese financing, or frankly just like a real, a giant payday in China, Hollywood. Screenwriters, directors, producers, fight choreographers, special effects folks.
They're going and working in China and helping China build a competitor to America. Right. I mean, it's like they're, Hollywood was giving China like a masterclass on, on how [00:21:00] to eat our lunch with this, uh, with this amazing American export. Okay. So now. Uh, let's, let's go back farther to the mid nineties, uh, and the significance of the Disney movie.
Kundan. Is that how you pronounce it? Kundan? Mm hmm. Kundan. Yes. The, the, so the, the release of the Disney movie Kundan. So this film caused huge heartache between, uh, China, but between the Chinese communist party, Chinese government. Hollywood and specifically Disney. So explain what was going on. This is while China was, you know, in its campaign to join the WTO, China was.
Was trying to modernize to integrate into the world. And there's this huge confrontation, this huge blow up between China and Disney. That's right. And so this is 1997. So Hollywood [00:22:00] films have been exported to China at this point for three years. They, they send about 10 titles a year and 3 million is like a record setting gross.
I mean, this is not a market that any studio chief. is paying attention to, really. Um, and Disney, through some machinations, inherits this movie that Martin Scorsese is making about a young Dalai Lama in, in Tibet. And it is shooting for one day when an official from the Chinese embassy calls Disney's general line and is directed to the C suite.
And this official informs The Disney executive on the line that this is going to be a major problem because China does not want to see an American movie valorize the Dalai Lama. They do not want to see a movie that explores that chapter in Chinese history or portrays it in a way that they wouldn't approve of.[00:23:00]
And, and this catches the executives off guard because this is not, first of all, it's just not a market they think about when they're greenlighting movies. And this is, even if it was on their mind, this is not a movie they would think would go to China. And so they think they're in the clear, but There are larger issues.
So you might think like, well, what, why can't they just make, say, you know, buzz off and make the movie? Well, there are larger issues at play because Disney at this time is trying to get a TV channel into China. They They know that it is, that there is, as one person put it, there's a lot of money under the mattress over there.
And they're also already in talks about a potential theme park on the mainland. And so this is And Disney, according to your reporting, Disney at the time had viewed China's one child policy Actually, as a, as a big economic, a big market opportunity [00:24:00] for, for Disney, because people had more money because they weren't having a lot of kids and kids were at home alone, needing to be entertained, right?
And they had, you know, to every child had two sets of grandparents. There was all this focus that people could put on on one child. And also, I mean, there was a middle class that there that didn't exist. You know, several years prior, and, and so, but what was so fascinating is it was very clear from that phone call that the making of this movie, Kundin, jeopardized all of it.
So here you have this conglomerate worth billions of dollars and nestled deep, deep, deep inside it is this contaminant that is just going to grow like a crack on a windshield and potentially threaten all of that promise. And Disney's in a tough spot because it's Martin Scorsese. If they just cancel the film, they'll be tarred as, you know, [00:25:00] squelching free speech and free expression in Hollywood.
But they also know they have to maintain warm relations with this country that they know in 10 or 20 years is going to be this massive opportunity for them. And so, this executive I spoke to calls the man they happen to have on retainer for such issues, who is Henry Kissinger. And he and Henry Kissinger fly to DC to meet with embassy officials and explain to them why it would be bad for this movie to just be cancelled or to be, to be buried.
And also that there would be a bit of a Streisand effect, right? Like, you would just end up, more people would be talking about it than, than, than would otherwise. And so the movie comes out, Disney intentionally buries it. They release it on very few screens and then use that low, that low performance to justify not expanding it further.
And still nonetheless, Disney is banned in the country for making it at [00:26:00] all. No, no. Yeah, go ahead. And so, and so, um, it's not until more than a year later that the CEO, Michael Eisner, has to, has to fly over. So Michael Eisner, 98, goes to China, and he thinks he's gonna clean the whole thing up, right? And he thinks the fact that they, that they, that they released this film without a lot of fanfare, which meant that, in Eisner's view, no one really saw it, so like, hey, we're all good now, right?
Right, he says, there's a transcript of it that is, It's really eye opening and he says, um, you know, the bad news is we made this movie. The good news is nobody saw it. I mean, it's really, it's incredible. He really just throws the company's entire creative ethos under the bus. And, um, and at the same time, the, the Chinese official he's meeting with, Xu Rongji, he is also trying to use the situation.
And he's the mayor of, he's the mayor of Shenzhen or [00:27:00] Shanghai? He was the mayor of Shanghai. He had a higher, he had been elevated to a higher role by the time Eisner went to meet with him. I see. And, and, and he himself was using that meeting for his own leverage because China at this time, if you can believe it, was desperate to get a Disney theme park.
They thought the Disney theme park would be the ultimate emblem of their economic miracle. And so he, in this meeting, is advocating for a Disney theme park while Eisner's trying to get back into the country at all. And eventually, Disney obviously is allowed back into the country. And lo and behold, some 15, 16 years later, Shanghai Disneyland opens.
So, you, I, I, I, speaking of this transcript of this meeting, so there's this amazing quote you have in the book where, where Zhu, the Chinese official, says to Eisner, quote, I very much admire your courage in correcting mistakes and the efforts you've made to promote the Chinese American friendship. This also proves that you're a very farsighted [00:28:00] businessman, and it's also an important factor in ensuring the success of the Disney company.
And then you, you put in your own words, effectively what Zhu was saying to Eisner is nice company you've got there. Shame if something happened to it. Yeah, we, we see even back then, I mean, and this is, and this is, this would have been pre WTO, we see China understanding the economic leverage it has. over all of these companies.
That's what I'm struck by is how, um, how self confident the Chinese official is in his community, you know, conversation with an extremely influential senior, uh, American slash global media executive. Right. Oh, absolutely. I mean, I think at some point Eisner is trying to explain why a theme park doesn't make sense at the moment because A Disney theme park only works if you've introduced children to the characters, and you've kind of seeded affection for them over time.
[00:29:00] And the Chinese official says, oh, but we've got like a billion people, like someone will show up, you know? I mean, there's just this, there's just this consumer force behind all of these decisions that even today, and this is, I mean, I think this is why in many ways, Hollywood is It's an early student to what the NBA, Tesla, H& M, Intel, Nike, all these companies and sectors have had to learn, which is there's, there's an, there's a consumer base there too lucrative to give up.
So, and then you also write about two other films that were released right around there, Seven Years in Tibet. And, uh, the other one was Red Corner, Richard Gere's Red Corner. So can you just briefly just describe the significance of those two films? You know that that and the role they played while this was happening during this period, right?
I mean, it's it's insane that three these three movies were all coming out the same year but um Seven [00:30:00] years in tibet was being released by sony which ran into very similar issues where it was not a matter of this movie Not getting into china or showing in china, but it was about china's potential at disrupting its larger electronics Business and its supply chain issues.
I mean, this is something that I think today like apple Would have to think quite a bit about right? Um, those companies that not only have a consumer base to worry about but just a supply chain manufacturing Arm to worry about. And, and, um, and so that Sony also had to do its part to try and get back into the Chinese good graces.
Um, interestingly enough, it required buying a lot of gifts at Tiffany's in Beverly Hills and give it presenting them to the, to the local consulate and then red corner, which was a movie released by MGM. was, was not about the Dalai Lama, but it starred Richard Gere, who, um, even then was probably Hollywood's most famous and vocal critic of the Chinese regime [00:31:00] because he was such a proponent of Buddhism and a close friend to the Dalai Lama.
And so, whenever he was on his publicity campaign for this movie, which is about an American executive who goes to China and kind of gets wrapped up in this awful legal horror, Um, he would be, he was very vocal about the regime and what he considered the horrendous human rights abuses. And he was, just to be clear, he was doing this while, again, there was the 90s.
I mean, people forget now because the relationship between China and the U. S. has gotten so tense. But at the period at this time, there's a lot of excitement about China joining the WTO. You know, President Jiang Zemin, you know, visited Washington. Clinton hosted him. Bill, President Clinton hosted him.
First time a Chinese leader had visited the U. S. since You know, Deng Xiaoping, Xi Jinping had come in 1979. It was like this, there was, there was, there was just, I was working in Washington at the time on Capitol Hill. Uh, there was, there was, in the 90s, there was a lot of excitement about, [00:32:00] uh, I think misplaced, but there was a lot of excitement about China's, um, integration.
Into the world global economy and it's and locking arms with with Washington. Oh, yeah Richard Gere was like the skunk the garden party. Oh, yeah. Yeah. He kept bursting the bubble I mean, I think at the state dinner from the at the visit you referenced he held a quote stateless dinner across the street Where he was trying to bring attention you're right That was and it was one thing and this is why in some circles it's considered like one of the biggest foreign policy blunders in recent history was there was this incredible sense of optimism and this hope among you know from everyone everyone from Bill Clinton to Rupert Murdoch that this kind of entry into the WTO would usher in a more democratic And, and certainly the movies were seen as a potential tool in that campaign, that, that getting Hollywood films into China [00:33:00] would sell America or sell democracy or sell the West as well as anything could.
And at the same, or in the last couple of decades, we've also seen these These Chinese films. So like you talk about how the business model was such that, you know, initially that, that these us films didn't depend on the Chinese audience, the Chinese market, and then, and then you write about how these tentpole films became so expensive to produce that they needed other sources of capital.
So they needed capital from China and they needed access to this growing Chinese market. But at the same time, as you talk about. That meeting, you know, the, the crash course after the 2008 Olympics where the Chinese are learning how to do Hollywood, suddenly there's this flourishing Chinese movie scene in Chinese movie theaters to the point that they don't need American films anymore.
The Wolf Warrior film that there's all these films. Being made. So that's, that's its own, that's its own thing going on. And this is just becomes, there's this flourishing over the last couple of decades, Chinese movie making [00:34:00] scene. Yeah, exactly. I mean, uh, whenever Hollywood films were first coming into China, they were considered so much better than Chinese movies that the government had to put all these controls.
on their distribution to make sure that at the end of the year, Chinese movies always made more than American movies. So, so one of the like, one of the big priorities of the Communist Party was like always making it seem like given the choice, Chinese audiences would flock to Chinese movies. Sooner than they would American movies.
So they would have blackout dates. They still do. They have blackout dates where if there's like a popular week of movie going, there's no imported films, so only Chinese markets get the run of the, of the multiplex. They also will sometimes, um, stack movie releases. So if there are two or three major Hollywood films coming out, they'll cannibalize one another's grosses.
And so at the end of the [00:35:00] year, lo and behold, Oh, look, you know, Chinese movies accounted for 51 percent of grosses this year. China remains the dominant film industry in its home country. Um, but over time, the Chinese movies got better and better. And more and more commercial. And you still had the medicinal propaganda films, but you also had Movies that I think of as kind of like our Amblin films, like the films of the 80s, um, you know, lighter comedies, or domestic dramas, or coming of age stories.
These movies started to get more and more sophisticated in China, and understandably, Chinese audiences started to prefer them. I mean, I always ask people, you know, like, How often, I mean, do we expect American moviegoers to go see a Chinese version of Davy Crockett? You know, like, they, it makes sense that they would want to see their stories, their stars, their myths and legends.
And as the movies got better, there was a [00:36:00] shift toward those films. We're now regularly Chinese movies will gross 500, 600, 700 million dollars in their home market alone. And Hollywood movies, when they are allowed in by the officials, still prove popular. But there's no question that the, at the end of every year, the top 10 highest grossing films are mostly Chinese titles at this point.
And are, is it their hope that they, these, these, uh, films will also begin to have, at some point, the global reach that, so not just domestic reach, but global reach, domestic meaning in China, but, but also global reach films like the success that Korea has had, for instance, with, you know, Parasite and Squid Game, that actually China becomes associated with these.
Brand names, he's brand titles globally, not just servicing the massive audience inside China. Oh yeah. And I think, I mean, the, the example of Korea right now is, is [00:37:00] particularly relevant. I think Korea has at this moment what China wants and, and it's the final leg of the campaign, which is making movies that it can export around the world.
And, and frankly, just sort of fulfilling that last element of Hollywood. Soft power playbook, which is selling China to the world through movies and TV shows And and so I think sometimes in Hollywood I run into executives who are very complacent because they say probably accurately Chinese movies are never going to catch on in America and and and partially that's true because American audiences have traditionally been resistant to foreign entertainment.
I mean Parasite only happens once every Decade or so, right? Um, but there are other parts of the world, particularly where China's influence and presence has accelerated in recent years through the Belt and Road Initiative, where that's not the case. And so I spent some time in Kenya, where [00:38:00] there's, I mean, obviously, well documented Chinese train stations going up and new roads and You know, you, you drive around Nairobi and suddenly you end up at the Great Wall Apartments and you can stay at a hotel that prints receipts in, in Mandarin.
I mean, the Chinese presence is just everywhere. Um, but there is a soft power compliment to that campaign. That is, I think, underappreciated, and it mostly, I'll keep this to Africa, it's happening elsewhere, but in Africa, there's an initiative known as the 10, 000 Villages Project, which is operated through a Chinese satellite dish company called Star Times, and it is setting out to wire 10, 000 African villages with low cost satellite dishes.
that pipe in Chinese movies and TV shows. So, I have to say, the most memorable moment of this entire reporting process was walking in to an apartment in Suswa, Kenya, which is [00:39:00] two hours northwest of Nairobi. Rural inner Kenya. And seeing a family pass the afternoon by watching a Chinese soap opera. And, I would say, there, there wasn't necessarily a wholesale replacement of American entertainment with Chinese entertainment.
I think it was best characterized by this young 4 or 5 year old boy I met, who, whose hero was the Monkey King. But his other hero was the rock so there's so there's a bit of a coexistence right now Yeah, but then when you talk to Kenyan officials It becomes about a much broader conversation about what superpower are we going to align with.
And this was in 2000, this was in early, early 2020. Um, I was there, I think the first time Trump was being impeached. And when you talk to the officials, there was the sort of like the, the, the [00:40:00] conversations we have in foreign policy circles about democracy versus authoritarianism. were happening in a very literal way and in a very kind of grounded way in these offices because they had CNN on TV and they were watching Trump be impeached and Looking to me the American reporter and asking if that looked like the best system Wow Okay, I want to go to the story of Chloe Zhao who what is an American?
I think she immigrated to the US from China as when she was very young as a kid, and she ultimately was nominated for best director for Nomadland, uh, last year. Um, can you, can you tell us her story and, and where it fits into your story? Sure. So she, she's this, the daughter of a, um, of a Chinese industrialist who was educated largely in the West.
Um, and, and as you said, really found quick critical acclaim in Hollywood. And Yeah, [00:41:00] it was, uh, last year, she was nominated and the clear frontrunner for Best Director at the Oscars for, for Nomadland. Fascinatingly, a movie about how America doesn't take care of its, you know, most vulnerable people. Yeah, I mean, it's the global financial crisis story, I mean, according to these screenwriters, uh, of, of America, of the part of America left behind.
Yes. After the global 2008 crisis. I mean, I think they even leave a town called Empire. Something, you know, there's something like that. Something, something like that. And so, um, and so Chloe Zhao at one point, you know, this was China's ultimate entertainment goal was getting an Oscar and and getting an Oscar and getting you know a Chinese presence at the Academy Awards and whenever her nominations were first announced the state media took her up as a cause and said You know, she is the pride of China.
And then, comments that Chloe Zhao made [00:42:00] in 2012, so Almost a decade earlier, unsurfaced, and it was, there were comments she made in a Q& A with a, frankly, a relatively obscure industry publication about how growing up in China, I believe the quote was that it was a place with lies everywhere, and she was critical of China.
And these comments spread through Chinese social media. I think there's, like, one thing that explains a lot of these Um, you know, sort of company, uh, the furious backpedaling you see a lot of companies do right now is the, are the nationalist mobs on Chinese social media that can be activated by these kinds of things and Chloe Zhao became a target of these online mobs, some of whom seem to be supported by or amplified by the government, some of whom seem to be So, um, a good thing.
You know, just general nationalists, and the entire presence of Chloe Zhao was essentially scrubbed [00:43:00] from the Chinese internet. And when she did eventually win the Oscar, no one in China, looking through official channels, even knew about it. And it's this fascinating example of a Chinese woman leaving China, coming to Los Angeles, reaching the pinnacle of her field, and yet still having to answer to Beijing rules.
Uh, so close you out. My understanding. So the, the, the Quote where the the article that had this quote was you said it's an obscure, um, industry rag called I think it's called filmmaker Yes, and it doesn't have a big online presence. Really? I mean this this article you couldn't find online and there were these stories about Like the remaining hard copies of the of the of the issue that had the article that had her quote critical of China were being Like people are scouring to get them and there is, there is reporting that it was Disney that was trying to do it because Disney had signed Chloe Zhao to [00:44:00] work on the Eternals.
Right. So what, like, and so, and do you think Disney, again, coming back to your earlier story about Disney, I mean, do you think Disney was, was hiring her as a director in part because they thought, oh my gosh, we're gonna, I mean, before the, these, this quote surfaced, they, they hired, they hired her for the direct script.
Right. Right. Uh, the Eternals, because they thought, oh, well, this will help us in China. Oh, absolutely. I'm sorry. Yeah, absolutely. I mean, and I think, and, um, same goes for the Marvel movie that preceded that, Shang Chi and the Legend of the Ten Rings. That movie was certainly greenlit with an expectation that it would do well in China, that it would help its play in China.
Ironically, Shang Chi did not get into China, and the Eternals never played in China either. Um, so we're at a moment right now, especially as tensions are so high between the two countries where it just feels like any effort to [00:45:00] appeal to the market ends up backfiring. Um, and, and, and it's, and it's so interesting because I remember whenever, whenever the Chloe Zhao Oscar, um, controversy was happening, really the stakes were much higher because she had this Marvel movie.
Coming it was it was it was another case of you know It would be one thing if Chloe Zhao wanted to stay an independent director making movies like Nomadland She might be able to speak out a little bit more. Um, she wouldn't be able to work with major studios because those comments would just essentially turn her radioactive.
So just closing things out here, in the last several years, the plight of the Uyghur Muslims in Xinjiang province Uh, and the, and the labor camps, concentration camps that exist to, to brutally [00:46:00] repress this, this Muslim minority in China have become a front and center story, which really whatever was going on was not a front and center story when, uh, during the episodes that you're, you know, that you're reporting on.
Obviously there was. Tibet, I mean, Tibet as a, as a crisis goes back, you know, all the way to, you know, what, 19, 1949. Right. But, but, uh, and, and you had the Chinese army going into Tibet and, you know, at that time and, and rounding up, uh, what rounding up people, putting them in Tibetans, putting them in, um, reeducation camps, but, but for that, and then, you know, which, which, Has been well studied and then obviously Tiananmen Square 89 well studied until you had the Uyghur Muslims You didn't have enormous focus as much as it warranted on Human rights issues in China at the same time as you write about that Hollywood becomes so dependent on China.
[00:47:00] So when you talk now to Hollywood executives, both for your reporting and then for the book and for your reporting generally, does this make them uncomfortable? Like do they realize now that they just can't kind of look the other way? I don't think so. I think that I think that the answer remains, you know, it's a global market.
Um, it's not my job to police human rights abuses. in foreign countries. Um, and if I started to have moral qualms about where we release movies, I'd have a very, very small footprint. Um, I will say I do notice a difference. I wouldn't say it's quite Jekyll and Hyde, but I do notice a difference with those who have been out of the studio system for a while.
I have talked to several former high ranking executives who I think a com have a [00:48:00] combination of sort of moral weariness, and also just a sense that they got played. And, that what had worked in the short term, and what had maybe helped them win the quarter, is ultimately planted a bit of a poison pill.
In the industry at large and, um, and so, so I think that I think there's a frustration there to, um, that they were put in a position to think on a quarter by quarter basis while working with a country that very casually talks about 5000 years of history and, um, that collision of the short term gains and the long term planning.
Is ultimately been the downfall, really the humbling of Hollywood here and and so I, but, but, but to be honest, I, I have yet to find any executive who has said to me, I'm really disturbed by what's happening and [00:49:00] I want to do something about it, whether it's, I want to try to move more of my business away from there.
I want to make a movie about it, something that kind of proactive. I want to Um, I have yet to see. And lastly, you talk about what a number of these executives say now that they're learning what it means to really do business with China. Even though they, you know, Hollywood tends to be a pretty partisan town, uh, whose politics are pretty liberal, they will quietly or, you know, um, anonymously say that they thought that Trump, for all his flaws, uh, was onto something.
In terms of heightening, sharpening the differences with China. Oh, that's right. Yeah, that is I would say that is the one thing most people in Hollywood Give, uh, President Trump credit on is, uh, a lot of them just because they, by the time Trump took office had, had been for more than a decade dealing with the lopsided [00:50:00] deals, the, the, the requirements, the, the provisions to have state backed partners to never allow majority ownership, all of those issues that the broader business community has complained about.
Recently, Hollywood has had to deal with as well, and, and I do think, um, that is one thing that, that folks out here in, in liberal Hollywood would concede, it, they, they think Trump was Right about and what's been interesting is that since Biden took office, Biden, who played a significant role in expanding Hollywood's access to China, right?
Wasn't he when he was vice president, he was responsible for negotiating the quota. He did. He did. So he and and Xi Jinping, who was then his counterpart, who is not yet. President, um, got together in 2012 and personally negotiated an expansion to the number of movies that China was the would allow into the country.
And that is essentially what allowed every studio to [00:51:00] guarantee that all of their major releases would get into the country. And so Biden had this has a history with this topic. But since he's taken office, I think in part because The studios during the Trump years just tried to duck and cover. They didn't, they did not want to be swept up in the broader trade issue.
Um, but since Biden has taken office, it has been very quiet. And what's, and, but it'll be interesting because it's not really tenable because for the past year or so, Dan, one major movie after another has been rejected by Chinese officials and the studios right now, are looking at some really glaring gaps in their balance sheets about what they expected to get out of the Chinese box office and what they're actually getting.
And if that doesn't change, it's going to force a real reckoning on how exactly their business plans are drawn up and whether they continue to keep trying to get [00:52:00] these movies into China. This Spider Man movie that's made a gazillion dollars this year was absolutely greenlit with the intention of playing in China and it's never screened there.
And it's grossed something like, you know, one and a half. Billion dollars or something. So it's done just fine. But you're right that they had, they had penciled in generating a few hundred million dollars in China and they still can't figure out Marvel, whomever, like the studio, they can't figure out why they don't have access on Spider Man.
Right. And they, and they, and they don't really have recourse either. And, and because when, when a decision is made, you know, Not to allow a movie and it's not like a memo goes out saying, and here's why, um, you know, for years now, Hollywood has kind of had to cobble together its own rule book just by looking at decisions that are made and trying to divine and back channeling to officials who they know on the ground, but really just trying to divine.
[00:53:00] What the officials are thinking in that moment. And right now there's nothing they can really do. And if you're a studio that eventually wants to get a movie into China, you're not gonna be the one that says, Hey, what's going on here, Eric? We will leave it at that, but we're gonna have to have you on.
'cause as I've mentioned to you, the, the story of your book Will is interesting. It's very, it's very interesting. But Will, will, will only be more interesting is the reaction to the story of your book, which I think will be its own story. 'cause I think it's, um. It'll hopefully be a catalyst for a lot of important conversations.
Uh, so, so we're going to need you back on this podcast. Anytime you're out there with the book for a while. Anytime we can have a group viewing of Top Gun or something like that. Yes, sounds great. All right. Uh, the book is red carpet, Hollywood, China, and the global battle for cultural supremacy. Eric, thank you so much for joining the podcast.
We'll post a link. to the book, uh, and the show notes. Great [00:54:00] having you. My pleasure.
That's our show for today. To follow Eric Schwartzel, you can find him at WSJ. com, all his reporting at the Wall Street Journal. And then also you can Follow him on Twitter at Eric Schwartzel, E R I C H S C H W A R T Z E L. And of course you can purchase Red Carpet, which I strongly encourage you to do at your favorite independent bookseller or at barnesandnoble.
com or that e commerce site that I think they are calling these days, Amazon. Call Me Back is produced by Ilan Benatar. Until next time, I'm your host, Dan Senor.[00:55:00]