Hollywood’s in need of a superhero - to recover its money from China

Beijing accused of taking box office receipts from American studios

Los Angeles

China is likely to become the world’s biggest film market within the next five years, making it a potential source of vast profits for Hollywood studios – but only if the Chinese decide to pay them. And, according to reports this week in the US trade papers Variety and The Hollywood Reporter, China stopped paying Hollywood for its movies months ago.

Remarkably, it seems that the studios have continued to send their big releases to Chinese cinemas, despite not having received a penny of their box-office takings since the end of last year. In several cases, the withheld payments are thought to total tens of millions of dollars, and all because of a dispute over a new tax.

Last year, the US Vice-President Joe Biden and China’s then Vice-President Xi Jinping, who has  since become the country’s President, negotiated a landmark World Trade Organisation deal, relaxing strict restrictions on foreign film releases in China.

Under the agreement, Beijing agreed to allow more overseas movies to be screened in Chinese cinemas than in previous years, and raised to 25 per cent the share of box-office takings to be returned to US studios.

Towards the end of 2012, however, the state-run China Film Group told studios that it intended to levy a 2 per cent value-added tax on each film  release. Studios are refusing to pay the VAT, claiming it breaches the WTO deal. The ongoing dispute means Western studios have seen none of their agreed 25 per cent of Chinese box-office earnings for some of this year’s biggest releases.

Warner Brothers is probably owed more than $31m (£20m) for blockbusters including Man Of Steel and The Hobbit, while Sony has supposedly seen nothing for its James Bond movie Skyfall. Disney could be more than $30m out of pocket for Iron Man 3 alone, which made more than $121m in China, and 20th Century Fox has said it is still waiting for an estimated $23m return on its Chinese success with Life Of Pi.

Historically, dealing with China has been difficult for Hollywood film-makers, who must contend with the whims of Chinese censors. Many films have been banned with little or no explanation, others have been withdrawn from screens at a moment’s notice. Yet Chinese audiences are fast becoming so crucial that US studios are more anxious than ever to please them, and the censors who control what they see. Several Hollywood blockbusters, including Iron Man 3, specifically altered their content to make them more attractive to the Chinese market.

Chris Dodd, a former US Senator who now chairs the Motion Picture Association of America (MPAA), is working to resolve the dispute, which has reportedly reached the US Trade Representative. A source at the USTR told Variety that the agency was working with the MPAA and “counterparts within the Chinese government to resolve the issue”.

Arts and Entertainment
BBC Three was launched a little over five years ago with the slogan: “Three, is a magic number, yes it is.”

BBC Trust agrees to axe channel from TV in favour of digital move

TV
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer

film
Arts and Entertainment

books
Arts and Entertainment
Armie Hammer in the new film of ‘The Lone Ranger’

TV
Arts and Entertainment

festivals
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
Arts and Entertainment
Buying a stairway to Hubbard: the Scientology centre in Los Angeles
film review Chilling inside views on a secretive church
Arts and Entertainment
Jason Williamson, left, and Andrew Fearn of Sleaford Mods
musicYou are nobody in public life until you have been soundly insulted by Sleaford Mods
Arts and Entertainment
Natalie Dew (Jess) in Bend It Like Beckham The Musical
theatreReview: Bend It Like Beckham hits back of the net on opening night
Arts and Entertainment
The young sea-faring Charles Darwin – seen here in an 1809 portrait – is to be portrayed as an Indiana Jones-style adventurer
film
Arts and Entertainment
The audience aimed thousands of Apple’s product units at Taylor Swift throughout the show
musicReview: On stage her manner is natural, her command of space masterful
Arts and Entertainment
Channel 4 is reviving its Chris Evans-hosted Nineties hit TFI Friday

TV
Arts and Entertainment
Harrison Ford plays Indiana Jones in The Last Crusade (1989)

film
Arts and Entertainment

music
Arts and Entertainment
A Glastonbury reveller hides under an umbrella at the festival last year

Glastonbury
Arts and Entertainment

music
Arts and Entertainment
Miles Morales is to replace Peter Parker as the new Spider-Man

comics
Arts and Entertainment
The sequel to 1993's Jurassic Park, Jurassic World, has stormed into the global record books to score the highest worldwide opening weekend in history.

film
Arts and Entertainment
Odi (Will Tudor)
tvReview: Humans, episode 2
Arts and Entertainment
Can't cope with a Port-A-loo? We've got the solution for you

FestivalsFive ways to avoid the portable toilets

Arts and Entertainment
Some zookeepers have been braver than others in the #jurassiczoo trend

Jurassic WorldThe results are completely brilliant

Arts and Entertainment
An original Miffy illustration
art
Arts and Entertainment
Man of mystery: Ian McKellen as an ageing Sherlock Holmes
film review
Arts and Entertainment
Kitchen set: Yvette Fielding, Patricia Potter, Chesney Hawkes, Sarah Harding and Sheree Murphy
TV review
Arts and Entertainment
Chris Evans has been confirmed as the new host of Top Gear
TV
Arts and Entertainment
Top of the class: Iggy Azalea and the catchy ‘Fancy’
music
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

    How to stop an asteroid hitting Earth

    Would people cooperate to face a global peril?
    Just one day to find €1.6bn: Greece edges nearer euro exit

    One day to find €1.6bn

    Greece is edging inexorably towards an exit from the euro
    New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

    'Iron Man' augmented reality technology could become reality

    Holographic projections would provide extra information on objects in a person's visual field in real time
    Sugary drinks 'are killing 184,000 adults around the world every year'

    Sugary drinks are killing 184,000 adults around the world every year

    The drinks that should be eliminated from people's diets
    Pride of Place: Historians map out untold LGBT histories of locations throughout UK

    Historians map out untold LGBT histories

    Public are being asked to help improve the map
    Lionel, Patti, Burt and The Who rock Glasto

    Lionel, Patti, Burt and The Who rock Glasto

    This was the year of 24-carat Golden Oldies
    Paris Fashion Week

    Paris Fashion Week

    Thom Browne's scarecrows offer a rare beacon in commercial offerings
    A year of the caliphate:

    Isis, a year of the caliphate

    Who can defeat the so-called 'Islamic State' – and how?
    Marks and Spencer: Can a new team of designers put the spark back into the high-street brand?

    Marks and Spencer

    Can a new team of designers put the spark back into the high-street brand?
    'We haven't invaded France': Italy's Prime Minister 'reclaims' Europe's highest peak

    'We haven't invaded France'

    Italy's Prime Minister 'reclaims' Europe's highest peak
    Isis in Kobani: Why we ignore the worst of the massacres

    Why do we ignore the worst of the massacres?

    The West’s determination not to offend its Sunni allies helps Isis and puts us all at risk, says Patrick Cockburn
    7/7 bombings 10 years on: Four emergency workers who saved lives recall the shocking day that 52 people were killed

    Remembering 7/7 ten years on

    Four emergency workers recall their memories of that day – and reveal how it's affected them ever since
    Humans: Are the scientists developing robots in danger of replicating the hit Channel 4 drama?

    They’re here to help

    We want robots to do our drudge work, and to look enough like us for comfort. But are the scientists developing artificial intelligence in danger of replicating the TV drama Humans?
    Time to lay these myths about the Deep South to rest

    Time to lay these myths about the Deep South to rest

    'Heritage' is a loaded word in the Dixie, but the Charleston killings show how dangerous it is to cling to a deadly past, says Rupert Cornwell
    What exactly does 'one' mean? Court of Appeal passes judgement on thorny mathematical issue

    What exactly does 'one' mean?

    Court of Appeal passes judgement on thorny mathematical issue