Hollywood Faces Problems in the Chinese Market

Hollywood faces two problems when it comes to tapping the Chinese market.  First, it faces increasing homegrown competition.  China has begun to produce its own blockbusters, such as Lost in Thailand and Painted Skin: the Resurrection, which to date have grossed over $202 million and $113 million, respectively.   

Second, according to several reports over the last year, the Justice Department and the Securities and Exchange Commission may be scrutinizing American filmmakers’ dealings in China for violations of the Foreign Corrupt Practices Act (FCPA).  The FCPA prohibits Americans from bribing foreign officials to gain or retain business.  China imposes various restrictions on foreign films, including a quota on the number which may be shown in China.  In an attempt to circumvent these restrictions, American film companies may be taking actions that violate the FCPA.  In light of increasing Chinese competition and the scrutiny from the U.S. government, Hollywood faces an uncertain future in China.