Axios China

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January 18, 2022

Welcome back to Axios China. Today we look at China's growing movie empire, an Olympic boycott map, a new book about Hong Kong, and lots more.

Today's newsletter is 1,796 words, a 7-minute read.

1 big thing: China builds a movie empire

Illustration of a director's chair with a chinese flag
Illustration: Sarah Grillo/Axios

China blocked all four of Disney's Marvel movies from being released in its theaters last year, a grim sign for U.S. film giants being squeezed out of the world's fastest-growing box office, my Axios colleague Sara Fischer and I write.

Why it matters: The Chinese Communist Party is using domestic films as a key conduit for mass messaging aimed at achieving political goals, leaving little room for foreign views.

  • "It's a real turning away from the global entertainment industry," said Rebecca Davis, China bureau chief for Variety.

What's happening: The pandemic is ushering in a new era of unpredictability for Western entertainment companies that operate in China.

  • "The pandemic put China in a better position to control releases," said Comscore senior media analyst Paul Dergarabedian.
  • Despite Disney's best efforts to court Chinese officials to ensure its films are welcome to the region, its highest-grossing films last year — all Marvel titles — were blocked reportedly for character portrayals or concerns about comments made by filmmakers, directors or actors in the films.
  • "Marvel films are typically very lucrative there, but the political aspects in blocking those films took precedence for the Chinese government over the positive box office economic impact they likely would have had," said Shawn Robbins, chief analyst at Boxoffice Pro.
Data: Gower Street; Chart: Kavya Beheraj/Axios

It wasn't just Marvel films that were affected. Revenue for U.S. films in China fell across the board, while Chinese films dominated the box office, Variety reports.

  • Of the foreign films that did play in Chinese theaters last year, just 28% were 2021 titles; most were older films.

The big picture: China's leaders have set a goal for China to become a "strong film power" by 2035, Aynne Kokas, assistant professor of media studies at the University of Virginia, told Axios.

  • China already surpassed the U.S. as the world's largest theatrical market for the first time in 2020 and beat it again in 2021, in large part because of its reliance on local films, per Comscore. Chinese regulators typically allow about 34 foreign films to be shown per year.
  • Beijing's desire to establish a powerful domestic film industry isn't to rival the soft cultural power that America has enjoyed through the global dominance of Hollywood, but to create and then manipulate a powerful platform to disseminate party messages, per Davis.

The impact: The highest-grossing film in the Chinese box office in 2021 — and in Chinese cinematic history — was "Battle for Lake Changjin," a propaganda war film glorifying the Chinese army's fight against the American military during the Korean War.

  • The timing of the film's release came as China's leaders are mobilizing the country for extended rivalry with the United States.
  • Another recent film, "Embrace Again," uses China's most popular movie stars to amplify Beijing's preferred narrative of the pandemic — as a heartwarming struggle of a people against a virus — while erasing the government failures that allowed the initial outbreak to become a pandemic. The film dominated the New Year's box office.
  • "The story of the pandemic in China is in part being written by the state-backed films that have all the technical elements of a Hollywood blockbuster," Davis said.

What to watch: "It's in a state of limbo right now, one that may shift Hollywood's near-future global strategies as well as what China itself needs to continue supporting in its own theatrical market growth in the long term," Robbins said.

Go deeper: China is censoring Hollywood's imagination

2. A Hong Kong exile's manifesto for freedom

Image credit: The Experiment.
Photo: The Experiment

In a new book, former Hong Kong lawmaker Nathan Law connects his experiences as a pro-democracy activist in Hong Kong with China's attempts to curb freedoms around the world.

Why it matters: "It’s really important that we see Hong Kong as part of the puzzle in a bigger picture of democratic recession, so we can equip ourselves more as China expands its authoritarianism around the world," Law told Axios in an interview.

In "Freedom: How We Lose It and How We Fight Back," Law describes how Beijing was able to subvert Hong Kong's traditional freedoms and how the CCP uses doublespeak to rob democratic values and institutions of their true meaning.

  • "The fear of living in an unfree city may not be physically constraining in the way a prison is, but it is no less restricting to the mind," Law writes.
  • "When the lines around what constitutes a crime begin to blur, your imagination becomes your own worst enemy."

The backstory: Law narrates how his family originally came from rural Guangdong province, immigrating to Hong Kong when he was 6 years old in search of economic opportunity and freedom from communist restrictions.

  • In 2016, Law became the youngest person to be elected to Hong Kong's representative body, but he was removed several months later after he made a subtle protest of Beijing during his oath. In 2017, he spent several months in jail for his role in a 2014 protest.
  • After Beijing forced a national security law on the city in 2020, a final blow in a series of growing restrictions on democratic life in the city, Law found himself making the same journey as his parents, but this time from Hong Kong to London, where he was granted asylum.
  • "By bringing out my personal story, you can see that people who protest in Hong Kong aren’t anti-China in a cultural sense, but are fighting a brutal authoritarian regime," Law told Axios.

"Freedom, in practice, is never absolute. But we shouldn't confuse freedom with having a seeming abundance of choice," Law writes.

  • He gives the example of China's more than 2,000 television channels, which feature many different topics but all conform to a single ideological narrative.
  • Different societies make different decisions about when to restrict freedoms and for what purpose, but that doesn't mean freedom is relative. In a free society, "freedom is restricted only to protect, and not to empower authority," Law writes.
  • The true meaning of freedom is "the ability to hold values and make choices that the ruling party does not like."

The bottom line: "Where economic leverage had once been the means by which Hong Kong's limited freedoms were meant to be protected, today trade is used by China to apply pressure to reshape freedom around the world," Law writes.

3. Catch up quick

1. China's birth rate fell to its lowest in modern history, the Wall Street Journal reports.

2. The Dutch Olympic Committee will equip athletes with burner phones to protect them from surveillance in Beijing, Reuters reports.

3. Federal prosecutors have recommended dropping charges against MIT scientist Gang Chen, WSJ reports.

4. China's economic growth slowed amid COVID restrictions, the BBC reports.

5. China hosted a string of Gulf officials in a sign of Beijing's growing influence in the Middle East. Go deeper.

6. ICYMI: France's cybersecurity agency warned about Alibaba's contract to provide cloud services for the 2024 summer Olympics in Paris, AFP reports.

4. More governments join Beijing Olympic boycott

Data: Axios research; Map: Kavya Beheraj/Axios

A growing number of governments are saying they will not send a delegation of officials to the Winter Olympics in Beijing next month due to concerns over human rights in the country.

Driving the news: Denmark and the Netherlands announced last week they would also decline to send government officials to the Games.

State of play: So far, the U.S., Canada, U.K., Australia, Denmark, the Netherlands, Lithuania and Japan have said they will not be sending government delegations because of human rights concerns. Their athletic teams will still attend.

  • New Zealand stated it would not be sending ministerial-level officials to Beijing due to COVID-19 considerations.
  • German Foreign Minister Annalena Baerbock said she would not attend the Games, though she stated this was her personal decision.

5. Scoop: Lawmakers warn of states using risky Chinese tech

U.S. Representative John Katko in front of a microphone
Rep. John Katko. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

Two lawmakers are urging the federal government to ensure state governments are not procuring telecommunications equipment from Chinese companies deemed a security risk, according to a letter viewed by Axios.

The big picture: Governments around the world are struggling to determine which Chinese tech companies may pose security risks, and how to extricate those products and services from sensitive telecommunications infrastructure.

Details: In a letter dated Jan. 12, Rep. John Katko (R-N.Y.), ranking member on the House Homeland Security Committee, and Rep. Andrew Garbarino (R-N.Y.) asked Homeland Security Secretary Alejandro Mayorkas and Commerce Secretary Gina Raimondo to ensure that all telecommunications equipment used by government agencies is secure.

What they're saying: "We remain concerned about the purchase and use of telecommunications equipment and devices that have ties to the Chinese military, or that engage in unfair practices supported by the Chinese Communist Party," the lawmakers wrote.

  • They called for coordination with the Federal Acquisition Security Council to "support States to ensure they are not unwittingly procuring products that will create vulnerabilities at the State level which could expose the Federal telecommunications infrastructure and supply chain to greater risks."

State of play: State-level procurement of tech represents an area of vulnerability. One March 2020 report found that states such as Florida continue to purchase equipment made by Chinese-owned firms Lenovo and Lexmark, which aren't blacklisted but some say still pose risks.

  • “If you are a state chief information officer, there is no place to go in the federal government to really understand the threats you face and what you should do to ensure security. At the federal level we could definitely do more to help empower the many state actors,” report author Roslyn Layton has said.

Context: The U.S. has blacklisted numerous Chinese tech firms due to their ties with China's military, their complicity in human rights abuses, and concerns their technology would be used for Chinese government surveillance.

Go deeper: Defense Department produces list of Chinese military-linked companies

6. What I'm reading

Fashion slave: This clothing company has close ties to Xinjiang, where forced labor is rampant (BuzzFeed)

  • This investigation from a Pulitzer Prize-winning reporting duo reveals how Hugo Boss is still sourcing cotton from Chinese factories working directly with Xinjiang facilities. Clothing items are being sold in the U.S. and on Amazon.
  • The Chinese intermediary company involved is Esquel, which launched a U.S. lobbying effort I wrote about last year.

Digital sleuthing: Open source (The Wire China)

  • "With China’s political repression silencing sources ... and pandemic-related travel restrictions, which make on-the-ground information gathering nearly impossible, many researchers are turning to open source methods to keep tabs on what is happening inside of China."

State of the world: World Report 2022 (Human Rights Watch)

  • Autocracy may not be as ascendant as some fear, writes HRW's executive director Kenneth Roth, in his introduction to the annual human rights report.
  • But "if democracies are to prevail in the global contest with autocracy, their leaders must do more than spotlight the autocrats’ inevitable shortcomings. They need to make a stronger, positive case for democratic rule."

7. 1 photo thing: The first full moon of 2022

The moon sets behind the Dingdu Peak pavilion in the early morning in Beijing, China
Photo: Yang Wei/VCG via Getty Images

This image captures the moon setting behind Dingdu Pavilion in the western outskirts of Beijing, early in the morning on Jan. 17.