Red Star Over Hollywood

China’s communist regime is negotiating private deals with American film studios and financing the purchase of America’s second largest theater chain, leaving experts and human rights activists fearing the spread of dictatorial soft power and censorship to American shores.

“The Chinese Communist party has a program that they call ‘the Great Propaganda,’ and its aim is to export Chinese social power,” said former political prisoner Dr. Yang Jianli. “Cinema is the perfect way to do that.”

The Chinese government is making a push to export its influence overseas by helping companies tap into foreign markets, including the U.S. As part of that mission, it is providing an undisclosed amount of financing to help China’s sixth-wealthiest man, Wang Jianlin, purchase AMC Entertainment, the second largest theater chain in the U.S., for $2.6 billion. The move would make Wang’s Wanda Group the largest chain of movie theaters in the world.

“The Chinese are overpaying, but then again they’re not looking to maximize profits,” said Derek Scissors, a China expert for the conservative Heritage Foundation. “They have a much more complex slate of goals and that is to please the state above all else.”

The steep price for the theater chain does not reflect dwindling movie attendance in the United States, which is at a 16-year low. The acquisition has left observers, including Kelley Currie, a human rights expert for the pro-Democracy Project 2049 Institute, worried about the future of American film companies.

“There are perfectly legitimate business reasons why a company like Wanda would acquire a company like AMC, but you must take them together with concerns over censorship and the political nature of Chinese business,” she said. “Wanda is technically private, but it’s still going to have a party cell in it and a political commissar that makes sure it toes the party line.”

China is making a big “soft power” push to “increase its prestige overseas,” Currie said, and Wang’s expansion into U.S. cinema is only the latest example of the billionaire businessman chasing the state party’s agenda.

Wang, who joined the Communist Party in 1996 and served as a delegate to the 2007 Party Congress, expanded his real estate business from residential to commercial and tourism properties as the government called for improvements in each sector. The purchase of AMC is just another evolution of the Chinese call to “go global.”

“You don’t get to be a billionaire in China without being intertwined with the state,” Scissors said.

Censorship has afflicted America’s most recent blockbuster. The Chinese government censored between three and 13 minutes of Men in Black 3 because a memory-wiping device is used on a group of Asians. Chinese officials saw the scene as a commentary on the regime’s censorship policy, according to the Los Angeles Times.

American filmmakers have also begun to abide by China’s cultural agenda, citing James Cameron’s endorsement of Chinese censorship when Titanic 3D premiered in Beijing in April, Currie said.

“I’m not interested in their reality. My reality is that I’ve made two films in the last 15 years that both have been resounding successes here, and this is an important market for me,” the Academy Award-winning director told the New Yorker. “And so I’m going to do what’s necessary to continue having this be an important market for my films.”

Cameron is just the latest American mogul to fall into line to buy Chinese loyalty, Yang said.

“When businessmen go to China, they have to court the Chinese authorities, and they are either coerced or voluntarily act as Chinese apologists when they come back to L.A. or Washington,” he said.

The film industry is especially susceptible to angering authorities when compared with other Chinese interests, such as manufacturing and natural gas, according to Currie.

“This is going to lead to changes in the values of producers and the movie industry that is tantamount to censorship,” she said. “If you have one of the largest movie distributors in the U.S. under Chinese control, and you are driven by recouping the cost of making movies, you need to make sure whatever you’re making doesn’t offend the Chinese.”

The movie industry has cozied up to the regime in recent years to combat piracy—a pipedream, according to Scissors—and to cut distribution deals.

China allows only a set number of foreign films to enter its market legally each year, which has increased China’s leverage over American media moguls.

“They pit these western studios against each other so they can control the distribution rights and get them to behave,” Currie said. “They’ve increased the incentives for people to make sure their movies make that list.”

Such restrictions have opened the floodgates of corruption, according to Scissors, and aroused suspicion from the Securities and Exchange Commission.

In April, the SEC launched an investigation into accusations that Obama bundler and DreamWorks CEO Jeffrey Katzenberg bribed Chinese officials to obtain distribution rights in the country, as Vice President Joe Biden negotiated a deal to increase film quotas.

“They’re dealing with people vulnerable to bribery already, and when you know those same people may just steal your product, movie executives are willing to cut deals,” Scissors said.

One Hollywood insider, who wished to remain anonymous to avoid blowback from the film industry, said entertainers and film executives have purposefully avoided uncomfortable conversations about China’s history of human rights violations, as well as political corruption and censorship.

“They’re the type of folks who will do good work helping people from Tibet, but they don’t see the big picture that China is the one oppressing Tibet, or they reveal themselves to be just as greedy as the Wall Street guys they hate,” the insider said. “Katzenberg, he’s trying to cut deals to promote his own agenda, and China’s open game to him even if it means promoting its agenda.”

Hollywood interests and Chinese human rights violations clashed in May when a standoff erupted over blind activist Chen Guangcheng’s escape from house arrest outside of Linyi, where Relativity Media was filming the comedy 21 and Over. The studio had heaped praise on the historic city during its shoot, while Guangcheng was held under house arrest nearby.

Activist group Human Rights in China called on the studio to withdraw from filming in the city, saying, “It is a place where the local authorities are responsible for the egregious, ongoing, and widely reported human rights violations against one of the most prominent human rights advocates in China.”

Guangcheng and his family have since escaped China for New York City.

The Obama administration has gone to great lengths to promote American film interests in the Chinese market. Vice President Joe Biden personally negotiated with communist party leaders to raise the quota on foreign films and helped, along with Secretary of State Hillary Clinton, set up the DreamWorks deal.

Those negotiations demonstrate Obama’s interest in narrowing the trade deficit in an attempt to generate job growth in the U.S., said Currie.

“The policy of promoting exports and creating jobs through trade has put a lot of pressure on cutting deals with China,” she said. “This is the kind of debate that used to take place at the State Department, but now it’s coming from the White House in a very direct way.”

Dr. Yang, who spent five years undergoing regular physical and psychological torture for his role in the Tiananmen Square demonstrations and for attempting to promote workers rights at dangerous mines and factories, said the administration’s “soft stance” on China’s human rights abuses will only further increase the trade deficit.

“Obama thinks the U.S. has to cooperate with China because we need China for our economy,” Yang said. “But economic growth is the first and last hope to keep the regime afloat—without it, the regime would collapse tomorrow.”

Yang said the U.S. could regain leverage on Chinese authorities by threatening to withdraw investment or withhold natural resources unless demands to improve workers’ conditions and human rights are met. He has seen it work himself, winning his freedom and returning to the United States in 2007 after Republicans in Congress and the White House pressured Chinese President Hu Jintao to release him.

Currie agrees that the U.S. will only feed a growing trade and influence deficit with China if it does not act to promote human rights.

“We’ve enriched this regime and legitimized this regime because we haven’t held them to any standards,” she said. “And now we are allowing them to engage in norm, institution, and rule shaping to make the environment more amenable to their influence.”