Matthew Garrahan
China has agreed to lift some of its restrictions on US-made films in a landmark deal that will boost Hollywood?s efforts to expand in the world?s fastest- growing media market.
Beijing caps the number of foreign films it allows to be screened in its cinemas at 20, but has agreed to exempt from the quota an extra 14 ?premium format films?, shot in 3D or using the big-screen Imax format.
The move was immediately welcomed by Hollywood studios.
?China is one of the most populous countries in the world and this agreement represents a significant opportunity to provide Chinese audiences increased access to our films,? said Bob Iger, chief executive of Walt Disney.
The deal comes three years after the World Trade Organisation criticised China for restricting market access. China promised to comply with the WTO by March 2011 but missed the deadline and has worked with the US on a compromise since then.
The new agreement follows the endorsement by Xi Jinping, China?s vice-president and presumptive next leader, of a significant tie-up between DreamWorks Animation and three state-owned Chinese media groups.
That deal gives DWA a foothold in China and a route around the existing quota restrictions because it will have created a new, China-based company – Oriental DreamWorks – with its partners. DWA is run by Jeffrey Katzenberg, one of Barack Obama?s biggest fundraisers and supporters.
Ron Kirk, the US Trade Representative, said: ?US studios and independent filmmakers cite China as one of their most important world markets, but barriers imposed by China and challenged by the US in the WTO have artificially reduced the revenue US film producers received from their movies in the Chinese market.?
The new agreement would boost ?one of America?s strongest export sectors in one of our largest export markets?, Mr Kirk added. Film generates an annual trade surplus of about $12bn for the US.
The White House?s role in negotiating the new deal could boost Mr Obama?s backing in Hollywood.
The Chinese cinema market is growing fast, with total box- office revenues increasing from $1.6bn in 2010 to $2.1bn in 2011. Much of that increase has been driven by 3D films.