U.S. trade talks with China should pay off for Hollywood, a think tank analyst told the South China Morning Post in a report today.
Under an agreement set in 2012, the quota on imported films in China is set at a floor of 34. Researcher Mei Xinyu of the Ministry of Commerce’s Chinese Academy of International Trade and Economic Cooperation suggested today that is likely to rise following President Trump’s Florida meeting last week with China’s President Xi Jinping.
Last year already, 38 movies came into the market under the 25% revenue share established in 2012. Many saw that as an attempt by China to increase box office in what was a dramatically slowed year of growth. The studios are understood to be mixed on raising the quota.
The five-year arrangements are being reviewed. Talks involve the number of films allowed into China, but importantly also involve percentage of theatrical rentals and tapping into other markets in the country. This is happening in conjunction with other trade terms affecting agriculture, energy and finance.
Concessions in film and other industries “are relatively easy for China to make,” the researcher says. They “would enable Trump to claim quick achievements and in exchange China can ask for bigger market access in the U.S.”
The president has said that he wants to reduce the U.S. trade deficit with China.
Chinese ticket buyers spent $6.6 billion last year, making the country the No. 2 theatrical market after North America, the MPAA reported last month. But that was down nearly 3% from 2015, which the film trade group attributed to China’s slowing growth as well as weakening value of the yuan vs the U.S. dollar.
If the currency had held constant, then sales for imported films increased more than 12% in 2016.