The prospects for co-productions between China and the United States are strong but problems remain

Judging by the recent deals signed between major players in the Chinese and US film industries, a match between Hollywood and China would seem to be made in heaven.

The Chinese film market is not only the fastest-growing market in the world, but is also expected to move from No 2 and replace North America as the world's leading market before the end of this decade.

Given the relatively stagnant nature of its own market, Hollywood could no longer ignore China. For those in the Chinese film industry, following their remarkable box office success in their home market over the past year and a half, the time appears ripe to expand overseas. A partnership with Hollywood would provide a variety of benefits, including access to expertise in technology, marketing, story-telling and, arguably most important of all, the ability to bring a positive view of China to the world's screens, hence boosting China's soft power. Despite the recent activity, however, many observers in Hollywood have remained cautious about the prospects for Sino-American co-productions.

The history of Sino-American co-productions reveals the difficulty of any film succeeding in both markets, and the compromises that have been made when co-productions have succeeded. For example, the high tide for co-productions occurred during 2008-10, leading to China's greatest success in marketing its films abroad. The peak year was 2010, when Chinese films abroad made more than 3.5 billion yuan ($560 million; 410 million euros). However, that figure declined by 42.5 percent in 2011 and another 47.5 percent in 2012, when the equivalent figure was 1.63 billion yuan. The clear reason for the decline was the lack of co-productions with Hollywood.

The earlier successes were largely due to a single film each year. For example, in 2009 Mummy 3 made 1.15 billion yuan overseas, constituting as much as 41 percent of the box office of all Chinese films abroad; Red Cliff 2 was a distant second. In 2010, Karate Kid made more than 2.36 billion yuan overseas, making up 67.9 percent of the box office of all Chinese films overseas that year; in second place was Ip Man 2, with only 218 million yuan.

However, one could argue that Mummy 3 and Karate Kid were really Hollywood films disguised as Chinese co-productions, and indeed Chinese micro blogs contained many criticisms of these two films as presenting a poor image of the country to foreigners. Moreover, the Chinese in Karate Kid were far more benign in the version shown only in China, reflecting the problems with co-productions that have to meet the demands of multiple markets.

After 2010, when China began to enforce its strict requirements for co-productions instead of concentrating primarily on overseas box office, there have not been any successes to equal those of previous years. Thus, of the 67 co-productions filmed in 2012, 40 were partnered with Hong Kong and 11 with Taiwan. There were only four co-productions with the United States. Not surprisingly, among all co-productions, those with Hong Kong accounted for nine of the top 10 box office successes, with the remaining successful co-production coming from Taiwan.

Hollywood faces a dilemma in deciding whether to do a co-production, particularly when they are trying to market a global blockbuster. While the market in China can be crucial to a film's success, and the advantages of bypassing the quota system and gaining a 43 percent return from the box office are compelling, they have to consider whether meeting the demands of a Chinese co-production will have a negative impact on success in other markets.

As Zhang Hongsen, then director-general of the Film Bureau under the State Administration of Radio, Film and Television, told an audience at last year's Beijing International Film Festival that "co-productions should show the unique charms of China to audiences worldwide". However, since Hollywood blockbusters are high concept films that must appeal universally, they may consider an overly strong emphasis on "charming" Chinese characteristics to be less marketable elsewhere, and the global market has little recognition of Chinese films and film stars.

What we have seen recently is the attempt to gain some of the benefits of a co-production in terms of mounting a successful marketing campaign within China without the burdens that co-production status requires, including a cast in which one-third of the major actors have to be Chinese and the inclusion of sufficient Chinese cultural content. DMG faced this dilemma in 2013 with Iron Man 3 and opted for the international market over co-production status, yet still managed to succeed both in China and overseas, with additional Chinese scenes shown only in China. Paramount's Transformers 4 is also targeting the China market and has partnered with several Chinese entities, including CCTV-6, and will have four additional speaking roles for Chinese actors, chosen through a reality television show, although only Li Bingbing appears to play a prominent part in the film.

Transformers is already a brand name franchise in China and elsewhere, so the producers do not think it essential to go the official co-production route to succeed. What we are seeing, therefore, is increasing cooperation between Hollywood and China, but not necessarily an increase in Sino-American co-productions. China is an increasingly important market for Hollywood, but Hollywood will try to succeed in China without jeopardizing other markets, placing clear limits on the likelihood of major co-productions.

The author is director of the East Asian Studies Center at University of Southern California's College of Letters, Arts and Sciences.

(China Daily European Weekly 05/30/2014 page9)