helps Stanley Tucci beat someone up.

That guy? Turns out he's a Chinese boxer, Zou Shiming - a world champion & gold medalist.

Elsewhere in the movie, you’ll see a Chinese milk box, and even a Chinese bank ATM in Texas

of all places.

If you didn't recognize these references, that's because they weren't meant for you.

The growth of China’s middle class has created a massive new market for the entertainment

industry.

Next year China’s box office revenue will likely surpass the US, making it the largest

movie market in the world.

China has built 27 new cinema screens per day on average this year, and as of November

2016, the country has more screens in total than the US.

Obviously, the movie makers in Hollywood want to reach those customers. Transformers 4,

a movie criticized for making literally no sense at all, was the only film in 2014 to

collect over 1 billion dollars worldwide at the box office, thanks to Chinese viewers.

The problem is the Chinese government only allows a certain number of foreign films into

the country each year.

And each one has to pass through the government’s censorship agency.

There's kind of contradictory impulses. On the one hand, China wants to be the best at

everything. They want to succeed. On the other hand, they want to promote what the leader

is promoting. Chinese propaganda and socialist core values.

Before the 1990s, very few Hollywood movies made it to Chinese audiences.

The Chinese government had its own film industry to distribute propaganda, but it was failing.

In 1979 $23.9 billion tickets were purchased in 1993 that dropped to $9.5 billion.

In 1994 things started to change. The Fugitive became the first new American film set for

a general release to the Chinese public.

It was so popular that scalpers outside theaters were getting double the price of the ticket.

One dollar and twenty-five cents. Ten foreign movies were allowed in 1994. Since

then, Hollywood has pushed the U.S. government to continually negotiate for higher quotas.

These days, a U.S. film typically makes it into a Chinese movie theater in one of three

ways.

Through revenue-sharing, co-producing with a Chinese company, or through a flat fee.

The most common is the revenue-sharing model where the studio gets 25% of the revenue.

But only 34 foreign films per year are allowed.

Over the last 10 years American films have strategically incorporated positive Chinese

story elements to bolster their chances of being one of the films selected.

In Red Dawn, the enemy was originally China but was changed to North Korea in post production.

In the film 2012 Oliver Platt says

praising China for building arks in advance.

World War Z the book had the virus start in china due to illegal organ trade that’s

not the case in the movie.

In the Martian, the Chinese space industry saves the day. The Chinese based Bona Film

Group invested millions in the film.

It’s important to note though that studios don’t have to do this. Harry Potter is great

example.

If you look at the regulations in a very strict sense, theoretically something like a Harry

Potter film should not be shown because you're not supposed to have superstition and wizards

and things like that. But it's very hard to deny the Chinese audience Harry Potter.

There are two ways to get around the 34-film limit.

The least popular among big Hollywood studios today is the flat-fee model because they’re

selling the film at fraction of the cost and China gets 100% of the ticket sales.

The other option is co-producing the movie with a Chinese company so that it’s not

technically a foreign film. But co-productions are the most tightly regulated, with strict

guidelines on things like the film’s shooting location and its finances. It also has to

have at least a third of the cast be Chinese. In short, China somehow has to play a significant

role in the film, and it can’t be as the villain!

Drop your weapons! Or I kill the man!

Before Looper was released its director and studio partnered with DMG, a Chinese based

entertainment company to help adapt the film to a Chinese audience. DMG invested 40% in

the film too. The script was re-written to take place in Shanghai rather than its original

location, Paris.

But ultimately, separate American and Chinese versions of Looper were released because the

Chinese scenes in the film didn’t resonate with U.S. and other international markets

audiences.

That’s always the issue when you’re dealing with China and deciding on a co-production.

As important as the China market is, it’s not the only market.

Ultimately China wants their own films to outnumber and outplay their foreign competitors

so they’re building their own Hollywood.

It’s an $8.2 billion dollar investment slated to open it’s doors in April 2017 from the

same company that bought AMC in 2012 and subsequently doubled their ticket sales.

Sure, China will share their facilities with U.S. studios but their doors are still only

half open. That film quota that has held the US at bay for the last two decades will also

apply to Hollywood studios vying to book the state of the art facilities.