A futuristic city is soaring up on China’s coastline, with skyscrapers, landscaped parks, grand boulevards – and even an artificial island reclaimed from the Yellow Sea.
From a rocky hill, a white sign in Chinese commands the view: “Movie Metropolis of the East” – just like the Hollywood sign.
The $8.2 billion Oriental Movie Metropolis in Qingdao will be the world’s biggest movie studio when it is completed in 2018. Wang Jianlin – the tycoon whose Wanda Group is building the complex – makes no secret of his purpose on the venture’s website: “To build a Chinese Hollywood.”
As China builds state-of-the-art movie facilities at home, it has been on a Hollywood shopping spree abroad, with players such as Wanda, Alibaba and Tencent snapping up studios, investing in production companies, creating global distribution chains and bankrolling blockbusters. The dealmaking has stalled in the first half of 2017 – as China’s government reins in capital outflows and looks nervously at corporate debt. But the big picture is one of aggressive long-term expansion – due to the size of China’s entertainment market, the lower cost of Chinese film production (following global trends in cars and smartphones) and, particularly, China’s longing to reclaim its place as a global culture leader.
Today, the Hollywood dreams focus mainly on bringing entertainment to Chinese masses – as China is expected within a few years to overtake the US as the world’s biggest movie market. PwC projects that China’s box office revenue will reach nearly $9 billion by 2019, with a 15.5 per cent compound annual growth rate. China’s entire media and entertainment industry is currently estimated to be worth $180 billion.
Tomorrow, the dream will be to sell Chinese blockbusters to the world. China’s ambition to become Hollywood’s biggest player is part of a soft revolution in global culture that it has the deep pockets and the patience to pursue. For much of its history, China has been accustomed to being the top influencer in its region and beyond – a role it believes to be a kind of birthright. The historical view is what drives Chinese President Xi Jinping’s explicit objective to promote a “global creative industry”.
“Spreading culture abroad, it takes a long time to realize such a goal,” James Wang, CEO of Huayi Brothers Media, a major Chinese studio, told me recently. “In this regard, China needs a really good platform to find a good way to collaborate and co-produce content with international partners.”
Wang Jianlin, the dominant figure in the drive to create a Chinese Hollywood, has not had an easy 2017. Regulatory issues led to the dissolution of a vaunted $1 billion acquisition of Dick Clark Productions (behind the Golden Globes telecast), and he recently halted plans to take on Disney theme parks in China, announcing the sale of his amusement park chain. Legendary Entertainment, the Hollywood studio he bought last year for $3.5 billion, has performed questionably at the box office.
Such setbacks prompted the Los Angeles Times to cast Wang’s Hollywood ambitions as “hubris” (and Sony’s misfortunes in Hollywood, stemming from Japan’s bubble economy, may certainly be seen as a cautionary tale.) But a bad six months will hardly be a deterrent for a businessman who sees his Wanda Group as a “centennial company” based on a hundred-year-plan.
Last year ended with headlines predicting a triumphant Chinese charge into Hollywood. This year’s headlines ponder how all of those ambitions may be vanishing into smoke. But the wild swings in fortune, dictated by the immediate priorities of political and business players in both markets, do not alter the strong fundamentals: there is a compelling investor rationale for betting on Chinawood as an emerging global entertainment giant.