- - Monday, October 17, 2016

ANALYSIS/OPINION:

Joseph Stalin once said, “If I could control the medium of the American motion picture, I would need nothing else to convert the entire world to communism.”

The Chinese government is taking those words to heart. China’s Communist Party claims that “efforts should be made to manifest core socialist values in internet publicity, culture, and service.” President Xi Jinping has vowed to “strengthen China’s soft power” and “build its capacity in international communication.” In his words: “The stories of China should be well told, voices of China well spread, and characteristics of China well explained.” The country now spends $10 billion every year on external propaganda.

Chinese officials are intent on spreading favorable spins of the Chinese Communist government — from repression of its citizens to its aggressive foreign policy and military buildup agenda.

How are they doing it? In part by buying U.S. film studios and movie theater chains, which the Government Accountability Office (GAO) recently agreed to review in depth.

It comes at a crucial time. China’s foot soldier is Dalian Wanda, a Chinese firm closely aligned to the Communist Party. In 2012, Wanda bought AMC Entertainment — the second-largest movie theater chain in the country — for $2.6 billion. It purchased Legendary Entertainment — the producer of “The Dark Knight Trilogy” — for an even heftier $3.5 billion in January.

Wanda-owned AMC now plans to buy Carmike Cinemas for $1.2 billion, forming the country’s largest chain with 8,380 screens in more than 600 theaters. The company has also shown interest in buying at least a portion of Lionsgate Corp. and Paramount Pictures — if not some of Hollywood’s “Big Six” studios.

Wanda’s founder and chairman, Wang Jianlin, is not shy about his ambitions — or his ties to the Chinese government. A former Communist deputy and China’s wealthiest man, Mr. Wang strives to turn Wanda into “a juggernaut” in the movie industry through high-dollar mergers and acquisitions that grant him greater control of major production and distribution channels.

Ownership of AMC theaters, for example, will allow Mr. Wang to promote his country’s motion pictures to American moviegoers and to depress viewing of films and treatments he may not want viewed by American audiences. Before Wanda’s takeover, the company’s cinemas showed no Chinese films, yet now put on double-digit productions every year. As Mr. Wang puts it, “[AMC’s] boss is Chinese, so more Chinese films should be in their theaters where possible.”

And he has used the Chinese government’s soft-power policy to his advantage. Calling it “very beneficial” to Wanda’s bottom line, Mr. Wang has steered at least $1.1 billion in government subsidies to Wanda. He has sold company stakes to relatives of some of China’s most powerful politicians and business executives, including the business partner of former Prime Minister Wen Jiabao’s daughter and relatives of two members of the Politburo — the Communist Party’s principal policymaking committee. Qi Qiaoqiao, the elder sister of President Xi Jinping, was also an early Wanda investor. Mr. Wang’s motto says it all: “Stay close to the government and distant from politics.”

The cozy relationship blurs the line between Wanda’s interests and the Communist Party’s. While the company gains greater market share through mergers and acquisitions, it also gains the opportunity to alter movie scripts prerelease and prevent certain films from being shown at Wanda-owned theaters if Chinese officials lobby for it.

It’s not a stretch. “Pixels,” the 2015 action-comedy flick, initially depicted aliens blasting a hole in the Great Wall. The scene was removed entirely from the final version of the movie. Similarly, the 2012 remake of “Red Dawn” originally featured Chinese soldiers invading an American town, but filmmakers changed the invaders into North Koreans without even receiving a formal complaint from Beijing.

Wanda recently bankrolled the $25 million production budget of “Southpaw,” becoming the first Chinese firm to “solely finance an American movie.” And it left fingerprints everywhere. According to David Glasser, who helped produce and market the film, “[Wanda was] involved — it wasn’t just a silent investment.” Mr. Glasser went even further: “They were on the set and involved in production, postproduction, marketing, everything.”

What prevents Mr. Wang’s company from removing a scene critical of China’s aggressive military posturing in the South China Sea? Or keeping such a movie out of its American theaters?

Fortunately, Congress is aware of China’s subtle power play. The promised GAO review came in response to a request from 18 bipartisan members of Congress to investigate Mr. Wang’s dealmaking and the effects of Chinese propagandizing through state-supported companies. Rep. John Culberson, Texas Republican, also asked the Department of Justice to launch a review of the Foreign Agents Registration Act to see if the “foreign propaganda influence over American media” was being sufficiently addressed. Wang Jainlin, the Wanda CEO, will be in Hollywood this week on a public relations tour promoting his government’s offer to subsidize American film making in China.

Congress should heed Stalin’s words. It may be a bridge too far for the Communist Chinese to achieve these control goals. However, there will be a lot of mischief experienced while they try.

Richard Berman is the president of Berman and Company, a public affairs firm in Washington, D.C.

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