How The Chinese Put the Squeeze On Hollywood

In his blockbuster new book ”Red Carpet,” the Wall Street Journal’s Eric Schwartzel documents the shocking compromises American movie studios make with Chinese censors in order to reach the country’s billions of moviegoers
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Hollywood’s fraught relationship with China—once centered on the country’s brazen flouting of intellectual property law—has evolved over the past decade into a more pernicious and pervasive co-dependency in which Western filmmakers self-censor to appease China’s unpredictable cultural taboos in exchange for access to its $3.4 billion film market, which is expected to quadruple by 2026.

So reports the Wall Street Journal’s Eric Schwartzel in his entertaining and impeccably researched new book Red Carpet: Hollywood, China, and the Global Cultural Supremacy, which debuted to rapturous reviews this month.

Schwartzel, a longtime entertainment industry reporter, detailed the ways in which Hollywood executives routinely bow to the whims of China’s film censors in an era when a $100 million tentpole won’t clear its costs without a theatrical release in the country. The result are Hollywood films that increasingly advance China’s cultural agenda, or at least whitewash the parts the Chinese government wants to suppress. Meanwhile, China’s own burgeoning film industry requires its few international stars, such as Jackie Chan, to appear in propaganda films that constitute the majority of its domestic movie output. Dissenters from the party line are quickly disappeared.

Los Angeles editor-in-chief Maer Roshan interviewed Schwartzel about his blockbuster new book at an event hosted by L.A.’s Book Soup.

Maer Roshan: Your book investigates how China has used its growing economic might to force Hollywood to make troubling compromises while using its own film industry to expand its own global influence.  When did you first start noticing this? 

Erich Schwartzel: In 2013 and 2014 I was covering the film industry for The Wall Street Journal and noticed that there was a flood of Chinese financing coming in and backing some big Hollywood productions— either the budgets or the companies themselves. And at first there was a sense in here that this might just be another round of dumb money. This was China’s chance to lose its shirt in Hollywood, as other countries and wealthy people have done since the movie business started.

But then it became clear that there was actually a political motivation to this effort too, and it was not just the dumb money but something that the Chinese government was prioritizing. And so you started to see that even as China became more and more aggressive on the world stage—whether it was infrastructure or aid or military might—there was also this soft power component: it was trying to use Hollywood and movies as this kind of proxy battleground for the broader U.S.-China rivalry.

Why was the rest of the media so slow to pick up on this?

I think tensions between the two countries really weren’t that high, so it largely flew under the radar. There were stories about movies being changed and censored by Chinese authorities, but at the time, while the Chinese box office was big and growing, it was nowhere as big as it is today. There was a sense—especially back in 2013, 2014—that China might be on the road to reform. So I think a lot of people in Hollywood saw it as just another market.

Even today, a lot of executives will say, “We edit and censor movies for every country. We edit and censor movies for airplanes. Why is this any different?” Well, it’s different for two reasons, one of which is China is operating on a scale that no other country is operating on. And second, we aren’t in an ideological battle with other countries the way we are with China right now.

Before 1994, there weren’t any Hollywood movies allowed into China. And for a long time after, the Chinese allowed in just a handful—about ten a year. Ever since Mao, the Chinese government denounced movies as dangerous Western propaganda. What made them change their mind?

For a long time, China was really opposed to any Western cultural imperialism or “pollution,” as they called it. Before 1994, only occasionally would a Hollywood movie get in. They let in the Christopher Reeve Superman, but then it was kicked out because authorities said that Superman was a narcotic that the capital classes used to forget their troubles and the troubles with their system.

So in 1994, Hollywood just followed a lot of other industries into China. This is in the years before China joined the WTO and started to work its way into other countries’ economies. Hollywood went in not long after Boeing did. But, really, the only reason they were there was not to make money but to try to wean Chinese people off piracy, because of pirated tapes and DVDs that were available for sale. So Hollywood companies thought, “Well, maybe we can introduce a culture of moviegoing that will cause the piracy to wane,” not necessarily thinking that this would be a source of revenue on its own. 

The first movie that was let in was The Fugitive with Harrison Ford. It was 1994, and I think it made $3 million, which was a record. I mean, that was an insane amount of money for the Chinese market. But it wasn’t for another ten years or so that the Chinese box office was going to be worth paying attention to.

Was there a Chinese film industry before that?

There was, but it was it was rather medicinal. Mao would give these speeches where he would say there is no such thing as art for art’s sake—art must serve the State. So you can imagine how good the movies that that kind of system produces would be; it was a lot of propaganda films about the glories of Mao, and a lot of grim documentaries. There was not necessarily a commercial show business.

But then, starting in the ’80s, you had the largest internal migration in human history—hundreds of millions of Chinese people moving from rural areas to the city.

And when they would arrive in the city, they would need grocery stores, shopping malls, and movie theaters. The government planned for that. That’s what really spurred the growth in movie theaters that then allowed Hollywood to move in. And then Hollywood essentially became this really amazing economic tool for those new theaters, because it got the Hollywood movies, got people to show up, and then supported the development of that real estate.

Today, producers are submitting hundreds of movies to Chinese authorities in the hope that a few dozen will gain access to billions of Chinese moviegoers. How are those movies chosen and who does the choosing?

In order to gain access to movie theaters in China, every movie has to be approved by Chinese censors. It’s usually a mix of bureaucrats who have worked their way through the system. Film Studies professors have been known to sit in and try to examine the films for deeper undercurrents that might prove problematic.

Now, most of the time, the movies that are going into China are the big blockbusters—the Marvel movies, the Jurassic worlds. Those are the kind of titles that typically get sent to China. Usually PG-13-type films that aren’t going to wade into waters that trouble the authorities too greatly.

Movies like The Ten Commandments, Brokeback Mountain, Babe and Nomadland have all run afoul of censors there. 

And they have become lessons that every studio soon absorbed. Because whenever a movie is accepted or rejected by China, it’s not like you get a memo from Beijing saying, “Oh, we didn’t accept your movie, and here’s why.” You have to look at what has been accepted and what hasn’t, try to define any patterns about why a movie might not get in, and then change your own script accordingly—which gives them more power.

Right. Because then you’re self-censoring.

Exactly.

Your book makes clear that a lot of this is driven by simple economics. A hit movie in China can earn like $700 million right off the bat. That’s typically more than most movies make in the U.S.

Well, let’s take, for example, one of these blockbusters Marvel superhero movies. In the U.S., it might take in $300 million or $400 million. It’s not uncommon for that same movie to make $200 million or $300 million in China. But the key difference is that in China, it’s almost pure profit because there are far lower marketing expenses, and there’s not much that a studio has to do other than send a copy to the censors and get it approved. And so over time, these movies have gotten more and more important to the studios, because, basically, the main thing you have to think about are these major tentpole releases that lift your entire balance sheet.

These big tentpole movies are being greenlit at $200 million and $250 million budgets. And when you’re investing that much money, you need a Chinese release to turn a profit. Oftentimes, the difference between profit and loss—even on these movies that are making a billion dollars worldwide—is release in China. So if you’re a studio executive, you quickly figure out that when you’re reading a script that’s going to cost $200 million to make, you examine it for anything that might be a problem getting it into China and you scrub it from the script at a time when American audiences are dwindling and Chinese audiences are only growing.

What was an early warning sign of China’s growing dominance over Hollywood?

So there was this movie that came out in 1997—Kundun. It was directed by Martin Scorsese and released by Disney. And it was a movie about the young Dalai Lama and his exile from China to Tibet. And so it has a couple trip wires. It’s about someone who is all but a State enemy of China. And it also portrays Mao as this evil figure and presents an unvarnished look at history that China would rather not see on screen.

How did it get greenlit in the first place?

Well, it was being made in 1997, when no one in Hollywood was thinking about the Chinese box office. Disney, though, was already thinking about a theme park in China and getting the Disney Channel on Chinese airwaves. So they had all these ambitious plans for China down the road. They can see its middle-class growing. You have, like, a billion families with only children. For Disney, this is a goldmine. But then on the very first day that filming starts, a phone call is made from the Chinese Embassy in DC to an executive in Burbank saying, “You have just started filming a movie about the young Dalai Lama—we’re not going to show it in China. That’s never going to happen. And it’s going to be a problem for all of the other billions of dollars you’re planning to invest in this country.”

And this executive, Peter Murphy, he actually had Henry Kissinger on retainer for such things. So he and Henry Kissinger had to fly to DC and meet with Chinese authorities and explain to them the tricky balancing act that they would have to strike, because they knew that if they canceled this film  they would be tarred in Hollywood as squelching free expression and silencing the legendary Martin Scorsese. But Disney also knew that if the movie came out and made a big fuss, it threatened all of these other plans they had for China. So they decided to find a middle way, which was to release the film but bury it. And so they released Kundun on Christmas Day on four screens. And then when it didn’t do well, they used that lousy performance to justify not expanding it further.

A Chinese-style catch and kill.

Yes! Nonetheless, despite Disney’s attempts at damage control, the company was banned in the market. So Michael Eisner, who was then Disney’s CEO, had to fly over and meet with officials. There’s a transcript of his meeting with a Chinese official that is just remarkable. He’s not there to defend the movie. He tells the Chinese, “The bad news is that the movie was made. The good news is that nobody saw it!” He apologizes for making the film and says it won’t happen again.

But he doesn’t leave empty-handed, right?

No. After his visit, China allows Disney to get back into China and then eventually build its theme park and invest billions of dollars in the market. But it was all threatened by this movie that was made by a subdivision of a subdivision of a subdivision.

So in the end, it was Michael Eisner’s diplomacy, not Henry Kissinger’s, that got Disney back on track there. Did anyone in those early days take that as a signal of how troublesome things were about to to become?

I think as the market grew bigger these examples took on an almost educational quality. There’s a dialectic in Chinese that translates roughly to “Kill the chicken to scare the monkeys”—make a public example out of something because it teaches everyone a lesson. And so there have been a couple of cases where a movie will anger Chinese authorities and cause a big political stink that then tells every studio in town to be cautious about messing with them.

This is why when an actor or actress gets in political hot water in China, they have to quickly apologize and make amends. Everyone knows the drill. Last year, John Cena gave an interview when he was promoting a movie in which he implied that Taiwan was its own country. And he had to immediately film what appears to be a hostage video apologizing in Mandarin for his slipup.

And the other thing that I learned is that when actors and actresses go to China, they are often sent with binders with notes on what topics they can talk about, what topics to avoid, and if certain topics come up, how to answer those questions. Because they’ve seen that even just a slipup like John Cena’s can mean the next six movies don’t get released in China.

But it’s not just people who are directly involved in a particular movie that can arouse the ire of Chinese authorities.

It all started a couple of years ago when a general manager for an NBA team tweeted support for demonstrators in Hong Kong. Somehow it caught the attention of Chinese authorities and they were not pleased. It started a whole crisis that got NBA games banned in China and essentially jeopardized the league’s entire business in the country. The NBA, much like Hollywood, had spent years investing in the market and trying to cultivate a fanbase there.

And all of those efforts were jeopardized by this random GM’s tweet. It’s only still relatively recently that we’re seeing the NBA trying to make inroads back into China. I mean, it really took quite a long time. More people ended up hearing about this this tweet because of China’s response than they ever would have otherwise. But that aggression and asymmetrical response is the point, because it shows everyone where the line is when it comes to what Beijing will consider acceptable discourse.

To me, the Red Dawn example in your book was the most amazing example of this.

In 2009, MGM thought that they should reboot Red Dawn, which was released in the 1980s.

It’s a very plausible story about a group of teenagers who have to defend their hometown against invading Soviets—sort of the ultimate example of a Cold War film. And MGM wanted to reboot this and they knew that Russia no longer made any sense as the villain. But China kind of did, because there was a sense that China’s military was modernizing. There was already some public polling that showed that there was American anxiety around China’s rise. In terms of B-movie logic, it felt like the right choice. So MGM shot a remake of Red Dawn starring Liam Hemsworth and featuring a Chinese invasion of the U.S. 

Then, just as it was being prepared for release, Chinese State media got wind of it and started publishing editorials about the tempers that would flare if this movie were released and this portrayal of China was shown on screen. It’s important to remember that this was not a movie being made for release in the Chinese market—it was just a movie being made here.

I think that distinction gets lost. The Chinese government is not just trying to censor movies shown in China—they’re trying to censor movies that are shown to Americans.

China didn’t want any movie that cast it in that role being shown anywhere in the world. And so if you can influence those films, you influence your image everywhere. So MGM was really in a bind, because they knew that if they released this movie, it could be a disaster for them. So they did something extraordinary: they hired a visual effects firm in Burbank to go in and, frame by frame, change the flags, the dialogue, any insignia, from Chinese to North Korean. And they released the film as the story of a North Korean invasion and not a Chinese one.

Nonetheless, the movie did come out. But critics were very quick to point out that a North Korean invasion of the U.S. didn’t make a lot of sense. So the movie came and went. But it was kind of interesting, because in 2012 the Chinese market was still relatively small. It really wasn’t cited as an example of Hollywood bending to China or the Communist Party until 2018 and 2019, when Mike Pence and Mike Pompeo brought it up in criticism of how Hollywood had fueled China’s rise. Before that, the only example I could find criticizing the change was a group of Michigan militia members.

But it’s not all so dramatic. Often the Chinese influence is much more subtle, like product placement just to placate and ensure that their movie is one of the 34 let in.

Once you start to notice it, you’ll see it everywhere. Examples like Red Dawn were teaching Hollywood what to avoid. But then there was also this logic that followed that was like, “Wait. What can we do to appeal to Chinese audiences?” That’s when you started to see Chinese actresses get small roles in Hollywood movies. It was really a bait and switch where they would cast a famous Chinese actress in one scene and then make it look like she was a big part of the movie when it was released in China.

Chinese audiences are far savvier than Hollywood gives them credit for. And they started calling them “flower faces,” because they said they were just hired to stand there. So that that fell out of fashion relatively fast. But then product placement ended up working for two reasons. One was that Hollywood studios thought audiences might feel warmer toward a film if they saw products they knew. But studios also were able to make some real money from these deals, too, because the Chinese companies wanted to be in these Hollywood movies. But it got really silly, really fast. For example, in one these Transformer movies, one of the strategies was this product placement. So they stuffed as many Chinese elements into this movie as possible. And so there’s this scene where Mark Wahlberg is in Chicago using Chinese protein powder. And another scene in the middle of Texas, it’s a Chinese ATM. And audiences in China would laugh when they saw it.

When it became clear that you could really make some money at the Chinese box office, producers would read scripts and be like, “Can this girl be Chinese?” But a lot of casting agents I talked to said that it got very hard to find Chinese actors who could come here for long enough and spoke English well enough to really have significant roles. So that’s why you would see these parts that were just like, blink and you miss them. There was this one example that was just frankly cruel, where a Chinese actress in an X-Men movie had one line: “Time’s up.”

One interesting takeaway from your book was how, at a certain point, China sent in their own film people to learn Hollywood techniques—because the party’s new leadership had come to appreciate the power of Hollywood.

As China started to exert more and more of a presence overseas, I think they saw just how much Hollywood had helped America do the same. In the words of one political scientist, “Hollywood and other forms of soft power helped America become an empire by invitation.”

So there was an effort to learn from Hollywood. But then they molded that to fit the Chinese system, which dictates that art exists to serve the State. So in some cases, they literally will hire Hollywood directors to come over and shoot movies there. Oftentimes, they aren’t exactly able to hire the Spike Lees of the world, but if there’s if there’s a director who’s down on his luck, he or she might get a call to go to Beijing.

One of those directors is Renny Harlin, right?

Yes. Renny Harlin, who was very big in the ’80s and ’90s. And Arnold Schwarzenegger, our former governor, is still quite famous and popular. It’s not uncommon to see his face on the posters of Chinese movies you’ve never heard of. When I was in Shanghai in the summer of 2019, I went to a party for a Russia-Chinese coproduction that had just been announced, starring Arnold Schwarzenegger. So out of sight of most Americans, people like that are flying to China, working for a day or two, getting a million bucks a day, and then flying home.

China also uses its power to stamp its values on American movies that are primarily distributed domestically. They take a dim view of religion and  homosexuality. What else do Chinese censors object to?

I think homosexuality is a good example, where movies that are released in one form in the U.S. often have to see certain things removed before they can screen for Chinese audiences. One prominent example was the movie about Queen, Bohemian Rhapsody, which was already criticized in the U.S. whitewashing Freddie Mercury’s homosexuality. But in China, Freddie was all but a ladies man—they don’t really acknowledge his gay relationships. There were even reports that in some theaters, in the scene when Freddie Mercury announces that he has AIDS, the sound just dropped out and no one in the audience knew what he was saying.

So then you can imagine what Chinese movies are allowed to explore. And so when Chinese movies are produced and then exported around the world, they, like American movies before them, are reflecting a certain set of values. The Chinese version of Brokeback Mountain? That really is a film about a great friendship.

So is there a home-grown Chinese film industry? Do they have the same worship of celebrity? What are their stars like and how are they chosen?

Over the past ten or 15 years, there’s definitely been a celebrity class that’s taken shape and that’s obviously always going to be at odds with a communist system. How do you how does a celebrity work in a communist regime? What a lot of the most skilled actors and actresses do is balance commercial pursuits with political work.

So what you’ll often find is that the people who have really risen to the top of the A-list in China are able to constantly make sure that their political currency is in check. So there can be a “One for you, one for me” model, where they might go make a big science-fiction movie or a big family comedy but then come back and star in a propaganda movie that’s made by the Chinese authorities. That allows them to accrue some political capital that they go spend by making a more commercial movie. Interestingly enough, the person who has really handled this perfectly is Jackie Chan. Americans remember him because of his fame in the U.S., but in China, he’s really known an agent of the State because he stars in so many movies that are government priorities.

Then there’s someone like Chloe Zhao, who also was a favorite daughter of the Chinese film industry and ran afoul of it. How did that happen?

She’s the daughter of a Chinese industrialist who was was largely educated in the West. And then after graduating from NYU film school, she started working in independent film and last year made Nomadland, which very early in the Oscar race was the favorite to win Best Director and Best Picture. At first, Chinese State media was very quick to embrace her. They called her “The pride of China.” And this was actually seen as a potential soft-power victory for China, because they were expecting photos of a Chinese-born director accepting Hollywood’s top prize.

But then somewhere along the way, comments that she had made a decade earlier to an obscure entertainment magazine—where she had said that growing up in China was growing up in a place where there were lies everywhere—these comments spread through Chinese social media, which is often a place for really nationalist sentiment. There’s quite a robust nationalist movement in China that targets these kinds of remarks, and Chloe Zhao essentially disappeared from the Chinese internet. And if you were using the Chinese internet, you would have never known that she won the Oscar; you would have never known that her movie came out.

Her next movie was a big Marvel movie that did not get released in China. It essentially seems as though these comments she had made a decade earlier are going to cost her any visibility in her home country. So it’s really a drastic case study in how someone can leave China but then still find themselves having to play by its rules.

What other kind of infractions do you have to commit to be erased in China?

The most the most prominent example is a Chinese actress named Phan Bing Bing who disappeared for several weeks when she was busted for tax evasion; she was reporting one salary to the authorities and actually pocketing a much bigger one. And she disappeared. It was another example of Hollywood getting caught in the middle, because at the time of her disappearance, Phan Bing Bing was supposed to be in Europe filming a movie with Jessica Chastain and Penelope Cruz—The Three-Five-Five. (It came out a couple of weeks ago—I think me and like 14 other people saw it.) It was this big international spectacle about these female spies that Phan Bing Bing was supposed to be in, and then obviously she couldn’t show up to set because no one knew where she was. She was somewhere in government custody. Eventually she reemerged, and when she did—per our earlier point—she started making propaganda movies and really accruing that political capital she had lost.

What was fascinating, though, is that she still was expected to be in this movie that Universal was making with Jessica Chastain. So they had to fly her to Los Angeles and film her scenes in front of a green screen that were then inserted into the film.

We talked about China importing its culture to Africa. To what extent is that also true in other Asian countries? Or in Europe or Australia? Have they had similar success anywhere else?

Not as much. But there is a big wide world out there, and there are a lot of other audiences that Chinese entertainment could reach. In Africa, specifically, there’s been quite a bit of ink spilled on all of the investment that China is making into the continent. I was fascinated by what China was doing to try and win African people over culturally. The main system that the government is using is this initiative called the 10,000 Villages Project, which distributes low-cost satellite dishes that carry Chinese movies and TV shows to African villages. I went to Nairobi and drove about two-and-a-half hours —so really inner Kenya—and would walk into apartments in the middle of the day and see families watching Chinese soap operas.

But remember that all this is not happening in a vacuum. This is happening as China is also trying to, in the eyes of Kenyan leaders, become the superpower benefactor. As the U.S. becomes more isolationist, China is trying to step in and fill that power vacuum. When I was there, I actually had a meeting with a Kenyan official in Nairobi the day that Donald Trump was being impeached for the first time, and he had CNN on in his office while we were meeting. And he looked to me, the American reporter, and said, “You know, if you were in my shoes, does this really look like the cleanest system?”

Does it drive the Chinese crazy to see their Asian neighbor eat their lunch?

Well, South Korea right now certainly is accomplishing what China would love to have accomplished. I mean, the Squid Game and going back to Parasite winning Best Picture at the Oscars and even the popularity of K-Pop, is just the kind of cultural exporting that China is trying to do. But the Achilles’ heel is that Chinese authorities would never allow the production of a Squid Game.

Have have you heard anything about China’s reaction to the book?

The short answer is no, I haven’t heard too much from folks in China. They can’t be happy. But one thing that I always keep in mind is that while a lot of times these conversations focus on China’s ambitions and Chinese censorship of Hollywood, there is also quite a bit of pride in China and in Chinese entertainment for what the country has managed to pull off—how quickly it has built this entertainment industry and the economic and political power they’ve been able to accrue in a short amount of time. So I think there is a world where parts of the Chinese government think it’s great that I’ve written a book about how powerful they are.


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