How Matt Damon may kickstart China‘s global movie ambitions

LOS ANGELES (AP) -- China has a new ally in its campaign to turn itself into a global cultural superpower: Matt Damon. And, behind him, a good chunk of Hollywood as well.

Chinese leaders have long sought international cultural influence, aka "soft power," commensurate with the nation's economic might. That’s brought us official Confucian institutes scattered across the world, billions of dollars in development aid and awe-inspiring Olympic ceremonies. But China's own film industry remains a mere flicker on the global screen.

Which is where Damon comes in. Early next year, the star of "The Martian" will headline "The Great Wall," a historical epic filmed in China with Chinese and American stars, a famous Chinese director, a cast and crew of roughly 1,300, a $150 million budget and some nasty monsters. (Not to mention the support of the Chinese government.) If all goes according to plan, the film could be China’s first international blockbuster -- one that might presage a wave of similar films intended to present a new face of China to the world.

That's a lot to expect from a decidedly unusual action flick. In "The Great Wall," Damon plays a wandering European mercenary in the pre-gunpowder era who stumbles across the titular structure and learns what it’s really for. (Hint: Those monsters might be involved.)

But film-industry types on both sides of the Pacific believe this kind of joint venture could open huge new opportunities for all sides. For Hollywood, it's about expanding markets and investment; for the Chinese government and private companies alike, it’s about harnessing American stars and storytelling to help movies based on Chinese history, myths and cultural icons break out onto a global stage.

Chinese authorities "have not made any secret of their desire to spread and to encourage and to develop soft power," says Rance Pow, president of Artisan Gateway, a Shanghai-based research firm that tracks the Chinese box office. Regaling the world with made-in-China blockbusters, he says, is one way to do so.

Hollywood naturally welcomes Chinese investment to help fuel its voracious movie-making machine. One Chinese company -- conglomerate Dalian Wanda Group -- snapped up an entire Hollywood studio, Legendary Entertainment, for $3.5 billion. Legendary just happens to be the studio behind "The Great Wall."

Working with Chinese partners also offers a shortcut past rules that limit the distribution of foreign movies in China's booming film market. That could open up a vast new territory to U.S. studios -- at least so long as they play by China’s rules.

"For U.S. industry, these concessions are really about market access," says Thilo Hanemann, an economist with Rhodium Group, a research firm focused on global trade flows and government policies.

Of course, plenty could still go wrong. There's no guarantee that either "The Great Wall" or another half-dozen or so would-be Chinese blockbusters will wow either Chinese or global audiences. Some previous efforts along these lines have been global flops.

This time, both Chinese and American movie executives think they’ve got the formula right. The most successful attempt so far is "Kung Fu Panda 3," which has pulled in $314 million, including an outsized $149 million in China. Unlike its predecessors, the third movie in the series was produced by a joint venture between the series' original studio, DreamWorks Animation and Chinese investors, including state-backed China Media Capital.

The biggest draw for Tinseltown is China’s huge and expanding film market. Cinema attendance in the U.S. and Canada has been flat for a decade, but Chinese moviegoers are on a tear, snapping up tickets worth $6.8 billion in 2015, up nearly 50 percent from a year earlier. At that pace, China could eclipse the U.S. as the world's largest film market as early as next year.

But tapping that market has been a challenge. Chinese regulators allow no more than 34 foreign films to screen in China every year -- far fewer than filmmakers release in the U.S. every month -- and impose multiple "blackout" periods during which none at all can be shown. Regulators vary the length of the blackouts so that Chinese-made films eke out a majority of the market every year, Artisan Gateway’s Pow says.

Films like "Kung Fu Panda 3" and "The Great Wall," however, get ushered to the front of the line. Because of their Chinese backers, the films qualify for prime release dates. Their backers also get to keep a bigger share of the box office than they ordinarily would.

So Hollywood has eagerly welcomed Chinese partners. From 2000 to 2015, Chinese direct investment in U.S. entertainment firms amounted to $4 billion, according to Rhodium Group. That pace then skyrocketed in January with Wanda‘s purchase of Legendary, which almost doubled that total by itself.

Chinese studios and investors have pledged another several hundred million dollars for Hollywood film slates. Warner Bros., DreamWorks Animation and Universal have linked up with state-owned enterprises and private companies such as electronics maker LeEco and Internet giants Alibaba and Tencent.

That flood of Chinese cash makes possible epic films like "The Great Wall," helmed by internationally acclaimed director Zhang Yimou and filmed at a multi-billion-dollar production facility still under construction in Qingdao on China’s eastern seaboard. Legendary plans eight more Chinese-themed projects with similar budgets, says Peter Loehr, CEO of Legendary's wholly owned subsidiary Legendary East.

"We’re hoping this is a model that works and that we can recreate it often," he says.

But the Western appetite for China-centric films remains uncertain. Consider "The Flowers of War," a 2011 film about the Japanese army's vicious 1937 sack of Nanking. Despite star Christian Bale and a $94 million budget, the movie pulled in less than $500,000 in the U.S., according to Box Office Mojo.

The brutality portrayed in the film turned off foreign audiences as a "kind of propaganda," says Peter Li, managing director of CMC Capital Partners, a unit of China Media Capital.

Foreign co-productions could suffer a similar fate if they grow too heavy handed in an attempt to satisfy Chinese censors, who oversee all films released domestically. "If you promote socialist core values, you’re not going to succeed overseas," says Stan Rosen, a University of Southern California political scientist.