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 Many films have been banned with little or no explanation, others have been withdrawn from screens at a moment’s notice.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
'Banksy Does New York' Film - 2014

Art Somebody is going around telling people he's Banksy - but it isn't the street artist

Arts and Entertainment
Woody Allen and Placido Domingo will work together on Puccini's Schicchi

Theatre

Arts and Entertainment
The sixteen celebrities taking part in The Jump 2015

TV

Arts and Entertainment
British author Helen Macdonald, pictured with Costa book of the year, 'H is for Hawk'
booksPanel hail Helen Macdonald's 'brilliantly written, muscular prose' in memoir of a grief-stricken daughter who became obsessed with training a goshawk
Arts and Entertainment
Tom DeLonge has announced his departure from Blink-182

music
PROMOTED VIDEO
Arts and Entertainment
In the picture: Anthony LaPaglia and Martin Freeman in 'The Eichmann Show'

tv
Arts and Entertainment
Anne Kirkbride and Bill Roache as Deirdre and Ken Barlow in Coronation Street

tvThe actress has died aged 60
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
Arts and Entertainment
Marianne Jean-Baptiste defends Joe Miller in Broadchurch series two

tv
Arts and Entertainment
The frill of it all: Hattie Morahan in 'The Changeling'

theatre
Arts and Entertainment
Gillian Anderson and David Duchovny may reunite for The X Files

tv
Arts and Entertainment
Jeremy Clarkson, left, and Richard Hammond upset the locals in South America
TV
News
A young woman punched a police officer after attending a gig by US rapper Snoop Dogg
people
Arts and Entertainment
Reese Witherspoon starring in 'Wild'

It's hard not to warm to Reese Witherspoon's heroismfilm
Arts and Entertainment
Word up: Robbie Coltrane as dictionary guru Doctor Johnson in the classic sitcom Blackadder the Third
books

Arts and Entertainment
The Oscar nominations are due to be announced today

Oscars 2015
Arts and Entertainment
Hacked off: Maisie Williams in ‘Cyberbully’

Maisie Williams single-handedly rises to the challenge

TV
Arts and Entertainment
Eddie Redmayne in The Theory of Everything and Benedict Cumberbatch in The Imitation Game are both nominated at the Bafta Film Awards
Arts and Entertainment

Academy criticised after no non-white actors nominated

Arts and Entertainment
Damian Lewis shooting a scene as Henry VIII in Wolf Hall
TV

Arts and Entertainment
A history of violence: ‘Angry, White and Proud’ looked at the rise of far-right groups

tv

An expose of hooliganism masquerading as an ideological battle

Arts and Entertainment

art

Lee Hadwin can't draw when he's awake, but by night he's an artist

Arts and Entertainment

TV

Arts and Entertainment
Michael Keaton in the 1998 Beetlejuice original

film

Arts and Entertainment
Olivia Colman and David Tennant star in 'Broadchurch'

TV

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.

    Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

    Greece elections

    In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
    Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

    Holocaust Memorial Day

    Nazi victims remembered as spectre of prejudice reappears over Europe
    Fortitude and the Arctic attraction: Our fascination with the last great wilderness

    Magnetic north

    The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
    Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

    Homeless Veterans appeal

    Homeless in Wales can find inspiration from Daniel’s story
    Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

    Front National family feud?

    Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
    Pot of gold: tasting the world’s most expensive tea

    Pot of gold

    Tasting the world’s most expensive tea
    10 best wildlife-watching experiences: From hen harriers to porpoises

    From hen harriers to porpoises: 10 best wildlife-watching experiences

    While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching
    Nick Easter: 'I don’t want just to hold tackle bags, I want to be out there'

    'I don’t want just to hold tackle bags, I want to be out there'

    Nick Easter targeting World Cup place after England recall
    DSK, Dodo the Pimp, and the Carlton Hotel

    The inside track on France's trial of the year

    Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
    As provocative now as they ever were

    Sarah Kane season

    Why her plays are as provocative now as when they were written
    Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

    Murder of Japanese hostage has grim echoes of another killing

    Japanese mood was against what was seen as irresponsible trips to a vicious war zone
    Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

    Celebrities call on David Cameron to take more Syrian refugees

    One young mother tells of torture by Assad regime
    The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

    The enemy within

    People who hear voices in their heads are being encouraged to talk back
    'In Auschwitz you got used to anything'

    'In Auschwitz you got used to anything'

    Survivors of the Nazi concentration camp remember its horror, 70 years on
    Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

    Autumn/winter menswear 2015

    The uniforms that make up modern life come to the fore