In light of the new Chinese film quotas, how can East and West benefit each other?

The recent relaxation of China’s film quota will allow an additional 14 enhanced-format (large-screen or 3D) foreign films into the country’s theatres. While that may seem like a small number, and principally means gains for the US studios, it does signify a willingness on the part of the Chinese authorities to expand the legal market for non-Chinese cinema in what is potentially the world’s biggest cinema-going market.

The steps are small ones, but revenues for foreign film suppliers in China are growing. At a panel I chaired at Filmart in Hong Kong this week, representatives from web platforms such as Qiyi and Youku explained how they are buying large packages of US films and making them available online either on a free-to-consumer, ad-supported basis or on a transactional video-on-demand basis. While the latter will require training a population accustomed to getting its films for free via pirated downloads to pay (only about 75 cents) for its content, it does show a move towards a maturing market with big revenue potential.

If the online access to foreign films appears in contradiction to the strict theatrical quotas, there is fear that the government will clamp down on this online access to foreign entertainment.

So what can the West give to the East in return for the new quotas? However ambitious Chinese production is these days, there is little audience demand outside Asia for historical Chinese epics such as Confucius and White Vengeance. Perhaps, as Motion Picture Association of America chairman Chris Dodd suggests, Hollywood can work with the Chinese industry on fundamentals such as screen storytelling or marketing.

Another panel at Filmart saw US screenwriters explain how China’s industry could benefit from investing in script development so audiences — not just in China — would be more engaged by the stories told on screen and not just by spectacular action or lavish production values.

Can we imagine a time when a Chinese movie opens wide on 5,000 US screens through Fox or Disney? Who knows. Audiences worldwide embrace US entertainment created by a sophisticated industry, but can US and European audiences learn to love another brand of movie from the East and spoken in Mandarin?

Perhaps it’s not such an absurd notion. China is fast to adapt western business models to its culture and once the storytelling gets slicker, the appetite outside China may grow. We have seen occasional glimpses of what can be achieved with Crouching Tiger, Hidden Dragon and Hero and with the rise of names such as Jet Li and Chow Yun Fat.

Cinema is a young industry and there is no guarantee that US popular culture will continue to dominate. Ironically, China’s biggest coup could be enlisting the US system to assist in its own quest for world domination in exchange for access to its massive market of cinemagoers.