Chinese investors ‘dig gold’ at Oscars

Attendees dressed in cosplay costumes pose at Perfect World’s stand during ChinaJoy 2016. File photo: IC

Beijing-based gaming giant Perfect World seems to be the biggest domestic winner at this year’s Academy Awards, with two films it co-produced with Universal Pictures under a slate financing contract – Darkest Hour and Phantom Thread – scooping up three Oscars.

Some industry insiders said such cooperation with Hollywood studios provides a shortcut for domestic investors to gain international recognition at the Oscars, while also boosting their credentials and making it easier for them to expand abroad. But others have questioned whether Chinese players can maximize their benefits, as they are not actually involved in movie production under slate financing contracts.

For Chinese film investors, this year marks an Oscar award milestone – Hollywood’s highest honor.

At the 90th Academy Awards last week, two movies that Chinese film company Perfect World co-produced with US-based Universal Pictures – Darkest Hour and Phantom Thread – scooped up three Oscars.

Darkest Hour won the award for Best Actor as well as Best Makeup and Hairstyling, while Phantom Thread won the Best Costume Design award. Together, the two films were nominated for 12 awards across nine categories.

The two films are part of a $500 million deal Perfect World reached with Universal Pictures in 2016, a spokesperson for Perfect World told the Global Times on Monday.

Under the deal, Perfect World will co-finance the production of at least 50 films in collaboration with Universal Pictures over five years, with its ratio of fund contribution standing at about 25 percent on average for each movie. In return, Perfect World will gain access to each film’s global equities based on its investment ratio, not only in global box-office sales, but also DVD sales, media distribution profits as well as the authorization of movie derivatives.

But Perfect World is certainly not the only domestic investor that is digging for Oscar gold.

Last year, box-office hit La La Land, which was co-financed by Chinese broadcaster Hunan TV and Hollywood producer Lions Gate Film under a $1.5 billion three-year slate financing pact, took home six Oscars.

Zhu Ying, founder of Beijing-based Brand and Entertainment China Group Co, told the Global Times that slate financing has gradually become a common cooperation model between domestic and Hollywood film producers in recent years. She explained that this model involves Chinese investors acting as slate financiers, as opposed to being involved in production, and cherry-picking a specific number of studio films from dozens of pictures.

“Compared with other options such as investing in a single movie or directly acquiring foreign film producers, slate financing is a relatively safe way to recover investment because it spreads the risk across a slew of quality films over a prolonged time,” Zhu explained. “It’s like putting your eggs in different baskets.”

Reaping the benefits

Some analysts noted that for domestic film investors, slate financing, to some extent, maybe a good bargaining model for “mining real gold” and gaining a global reputation at the Oscars, especially at this early stage when Chinese filmmakers are just starting to knock on Hollywood’s door.

Such way of investment has provided a shortcut for domestic investors to enter the Oscars world, which has been an elusive prize for Chinese filmmakers, Chen Changye, an independent industry analyst, told the Global Times.

“The Oscar success is a great lift for Chinese investors’ credentials and brand value. They have gained footholds in the global movie-making industry and will increasingly become recognized at home and abroad,” Chen said. “Also, in the future, they will have more marketable cachets in order to [successfully] negotiate with film producers.”

The spokesperson from Perfect World also noted that winning three Oscar statuettes is “a great opening” for the company’s expansion in the global movie industry.

“Thanks to the marriages with prestigious Hollywood producers, we can promote the growth of our international business in the future, snap up global shares and acquire big global IP rights,” he said, adding that through this experience, Perfect World has also been given the chance to develop a deep understanding of how a typical Hollywood film is prepared, produced, marketed and distributed.

Another rationale behind the ambition to cooperate with Hollywood producers is the rising unpredictability of the domestic box office, Su Mu, a professor at the Beijing Film Academy, told the Global Times over the weekend.

“China’s movie sales are like gambling, sometimes, even with mega movie stars and big IP rights, box-office performance is meager. But in Hollywood, where film production and marketing has matured, such thing won’t happen,” Su noted.

Worth the investment?

However, some analysts have questioned whether Chinese investors can reap maximum profits based on the popular slate financing model.

“The Hollywood movie is like a Boeing aircraft, everyone knows it’s good and safe and wants to take the flight… Chinese players are paying to get a ride,” Su said.

And because of the strict control over content and copyrights at Hollywood studios, domestic investors won’t be able to have a word on movie content and production, analysts noted, with the largest source of revenue likely coming from domestic box-office sales.

But the problem lies in whether Chinese audiences will buy into such Oscar-awarded movies, as most of their favorite genres so far have been literary films targeted at a specific group, Zhu noted. Also, it’s worth noting that there is a quota for the number of foreign films allowed to enter the Chinese mainland market every year.

Furthermore, it appears that some of this year’s Oscar movies are not big winners at the box office. So far, neither Darkest Hour nor Phantom Thread have been big blockbuster hits in the global market. International box-office numbers for each film stood at $136 million and $20.12 million as of the end of February, respectively, according to data from ticketing website Maoyan.

In the domestic market specifically, Darkest Hour, which premiered in December 2017, grossed only 36.96 million yuan ($5.85 million) at the box office, data from industry website 58921.com shows, despite a relatively high rating of 8.7 out of 10 on Chinese media review platform Douban.

However, the Oscars are creating a bunch of opportunities for domestic online video media platforms to capitalize on award-winning movies.

For example, iqiyi.com has acquired the online copyrights of six Oscar movies in China through cooperating with 20th Century Fox Film Corp, according to a statement the company sent to the Global Times on Tuesday.

The company is also considering further cooperation with 20th Century Fox Film Corp in the virtual reality and gaming spheres for the future, the statement noted.

Source: Global Times

Countries saying no to trade and openness will fail: Tim Cook

Countries saying no to trade and openness will fail, said Apple CEO Tim Cook, calling for China and the U.S to embrace openness, trade and diversity and believing that the pie gets larger if relevant sides work together.

Different from being a major maker of international trade rules, the U.S. has become an obvious breaker of them, experts and entrepreneurs from home and abroad said at a forum, warning the U.S. to stop the unreasonable decision and bring China-US economic and trade ties back to normal.

On March 22, US President Donald Trump incited a trade war by signing a memorandum that could impose tariffs on up to $60 billion of imports from China and restrictions on Chinese investment in the United States.

The memorandum is based on the so-called Section 301 investigation into so-called Chinese intellectual property theft launched by the Trump administration in August 2017.

The investigation, based on U.S. domestic laws, went against the international trade rules, said Wang Yiming, deputy director of the Development Research Center of the State Council.

Wang said the logic behind the U.S. trade moves was rough and outdated, and the results of the investigation were not objective.

“The measures taken by the Trump Administration were disappointing,” said Nicholas Stern, professor of the London School of Economics and Political Science and president of the Royal Economic Society.

The US has adopted a very inappropriate way to address the U.S-China trade deficit, which does not come from the U.S’s foreign trade with a specific country, it comes from the imbalance between its own fiscal revenue and expenditure, the professor pointed out.

Zhu Min, head of the National Institute of Financial Research at Tsinghua University said that once a trade war starts, the cost, price and flow of commodities will all change. The U.S. was a major maker of international trade rules, but what it is doing is obviously sabotaging the rules, Zhu added.

On March 23, China’s Ministry of Commerce announced that it planned to impose tariffs on $3 billion worth of American-produced goods. According to Zhu, China’s response once again called for rational and careful decisions by the U.S.

China and the U.S. are economically interrelated, and a longer period of dialogue is needed to solve their dispute, said Charles-Edouard Bouee, CEO of international consulting firm Roland Berger, who added that China has expressed its clear stance that this is not a unilateral dialogue and the U.S. should also be engaged in this.

An important cause of the trade imbalance is the fact that U.S. goods are less competitive in the Chinese market, said Long Guoqiang, deputy director of the Development Research Center of the State Council. “Solutions to the U.S-China trade deficit do not come from cutting exports from China, but from U.S. enterprises making their products more competitive,” he pointed out.

Lawrence Summers, a Harvard economics professor said a trade war will never help to achieve win-win results. Former World Trade Organization Director-General Pascal Lamy said that instead of trade protectionism, negotiation and cooperation is the only way to solve trade frictions.

‘Made in China 2025’ open to all

China will further open up its massive manufacturing sector to foreign investors and favorable policies under the country’s ambitious “Made in China 2025” initiative will also apply to foreign companies operating in China, the industry and information technology minister said on Monday.

The comments came amid rising trade tensions between China and the US, with the latter having announced a slew of measures against Chinese technology products and consumer electronics, reportedly trying to counter the “Made in China 2025” plan. Some foreign officials and companies have also raised concerns that the industrial upgrade plan could favor Chinese firms over their foreign competitors.

“All the policies and measures that support ‘Made in China 2025’ will be applicable to all types of enterprises in China, and domestic and foreign companies will be treated equally,” Miao Wei, head of the Ministry of Industry and Information Technology, told a panel at the China Development Forum on Monday in Beijing. “We will further open up the manufacturing industry and offer foreign firms more investment opportunities.”

Launched in 2015, “Made in China 2025” is a policy initiative that aims to spearhead the upgrading and modernization of China’s manufacturing sector and help the country to become a global manufacturing powerhouse.

But the initiative is open to participation from all, Miao said. “[We] encourage and support more countries, companies and institutions to participate in the implementation of ‘Made in China 2025’ and seek common development and promote the high-quality development of China’s manufacturing industry,” he noted.

Western worries

The “Made in China 2025” program has sparked concerns among some Western officials, particularly in the US, that China is aiming to dominate key manufacturing sectors such as new-energy and self-driving cars, information technology and aerospace equipment.

While US officials have maintained in public that their recent decision to slap tariffs on $60 billion-worth of Chinese imports was intended to punish China’s alleged theft of US intellectual property, some US media reports said that the tariffs are aimed at countering the “Made in China 2025” initiative.

Liu Xuezhi, an expert on macroeconomics at Bank of Communications, pointed out that such concerns are mostly held by traditional manufacturing powers such as the US and Germany, and their “hostile attitude” toward “Made in China 2025” is based on political and competitive considerations.

“‘Made in China 2025’ does not restrict the participation of foreign companies,” Liu told the Global Times. “There are certain restrictions in some areas, but the overall direction is that China will open up more sectors.”

In the Government Work Report delivered to this year’s two sessions, China vowed to “fully open” the general manufacturing sector and expand the opening-up in sectors such as telecoms, healthcare, education, elderly care and new-energy cars.

In a speech to the China Development Forum on Sunday, Vice Commerce Minister Wang Shouwen said China would soon release a timetable and road map for opening-up in sectors such as finance and new-energy autos.

Tian Yun, director of the China Society of Macroeconomics Research Center, said that China’s opening-up policy has not and will not change and there are many areas in which China can still open up more.

“The Chinese market is big enough that there would be no problem to further ease market access for foreign companies and we can share development in some areas with foreign partners,” Tian told the Global Times on Monday, pointing to the development of China’s domestically developed passenger jet, the C919.

“The development of big planes is a great model of cooperation between China, the US and other countries. The plane was designed and developed in China, but some parts are imported from the US and Europe,” Tian said.

However, Tian noted, there will always be competition in the development of key technologies that are essential to national security. “Let’s face it, no country would want to share its key technologies with others.”

At Monday’s panel, several foreign executives showed great interest in participating in the “Made in China 2025” program.

“We will further cooperate with China in the future because China has huge market potential for us. We have consumers who are very willing to accept new technologies and China has the right government policies to help our industry develop,” said Dieter Zetsche, chairman of German carmaker Daimler AG, according to a Chinese transcript of his speech.

Source: Global Times

In pics: ‘farmer ski team’ in Yanqing, host district of Beijing 2022

Lang Enge, the team leader, is in training.

The Haituo Mountain in Yanqing district of Beijing will be the location at which alpine skiing and bobsled competitions will be held when the 2022 Beijing Winter Olympics start. In July 2017, young villagers there established the first ever “farmer ski team” to promote winter sports among local residents.

The “farmer ski team” consists of 18 local villagers living in Zhangshanying Town of Yanqing. Before the team was established, Lang Enge, now the team leader, gave up his sheep caretaker occupation for fear of its bad impact on the environment.

Though they are young, all the 18 villagers have around 10 years of skiing experience. To promote the sport, they have so far trained 5,000 individuals since last winter. “Beijing 2022 will be held on our home soil, so we want to do something for the Olympics,” Lang said.

Members of the ski team promotes skiiing in a primary school in Yanqing.

China’s effort to regulate drone flights takes effect

Thanks to the efforts to regulate drone flights, incidents of drones interrupting civil aviation have been declining by month, and the frequency has changed from “frequent” to “occasional”, according to an international unmanned aircraft forum held in Beijing, Chinanews.com reported on March 22.

According to statistics, the number of qualified drone aircraft pilots in China rose from 214 in 2014 to 14,152 in 2017, an annual increase of 200 percent, and by March 22, that number passed 24,000. On the other hand, the number of registered drones has come to 180,000.

Illegal drone flights at Chinese airports last year affected multiple flights, and therefore also delaying the flights of many passengers.

To change this, the Civil Aviation Administration of China (CAAC) launched a special campaign to regulate illegal drone flights, implemented real-name registration of drones, improved the general management of drone pilots, and defined the scale and area of non-flight space restricted areas at 173 civil airports to protect normal airline flights.

An annual report regarding the management of unmanned aircraft compiled in 2017 under the leadership of the CAAC has found that as the supervision on drone flights tightened, incidents of drones interrupting civil aviation have been declining sharply to a steady low level this year, from the peak period in May 2017.

For the next step, officials with the CAAC disclosed that they will further improve rules and regulations on drone flights and proceed with the construction of an unmanned aircraft operation management platform.

China might target Boeing

China is preparing new countermeasures against the recently announced US tariffs and one possible target is aircraft firm Boeing, the US’ largest manufacturing exporter, according to former Chinese trade officials and experts.

If the US were to go ahead with the plan to impose tariffs on $60 billion-worth of Chinese goods, China would hit back where it would hurt the US the most and Boeing, one of the largest beneficiaries of the massive Chinese market, could be singled out, despite the potential negative impact on Chinese companies.

“After announcing the first list of [US] products for which tariff deductions would be suspended, China is currently studying a second and a third list, including products such as aircraft and chips,” Wei Jianguo, former Chinese vice commerce minister, said in an article he sent to the Global Times on Saturday.

China’s Ministry of Commerce on Friday released a list of 128 US products that will face new tariffs, in retaliation against the US’ decision to impose tariffs on Chinese steel and aluminum exports.

Chinese officials vowed to fight back against the US measures, but did not initially announce specific actions.

Wei, who is now deputy director of the Beijing-based think tank China Center for International Economic Exchanges, said that China is fully prepared to respond to the US measures and that the US “needs to come back from the precipice” or China will follow up with further countermeasures.

In a speech at the China Development Forum on Saturday, former Finance Minister Lou Jiwei also suggested that China target the US aircraft sector.

“I think the measures mentioned by the Chinese Commerce Ministry are weak and haven’t hit at where [the US] would feel pain,” Lou said.

“If I were in the government, I would first target soybeans, then cars and then aircraft.”

While neither Wei nor Lou mentioned Boeing by name, others have specifically singled out the US firm as a potential target for China’s countermeasures.

In an article on Saturday, People’s Daily said that US companies such as Apple, Boeing and Intel have made massive profits in the Chinese market over the years. If the US “insists on a trade war, China will fight to the end and let’s see who will last longer,” the article read.

Targeting Boeing

Boeing has been mentioned in discussions of a potential trade war between China and the US because of its high visibility and importance in the US economy. It is also one of the country’s largest employers and contributors of tax revenue.

Boeing, which reportedly employs 137,000 people in the US, has seen a period of prosperity since US President Donald Trump took office, with its shares having soared and earnings and cash flow hitting a record high in 2017. On March 14, Trump visited a Boeing plant in the state of Missouri where he touted the benefits of a tax reform bill he signed into law.

The company has also benefited massively from the Chinese market. Boeing said that one out of every four jetliners it produces is being delivered to Chinese customers and that Chinese demand would further increase.

As recently as Wednesday, Boeing announced that it had signed a deal to sell 30 jets to China’s Xiamen Airlines for more than $3 billion. The company has sold 1,720 jetliners to China as of Saturday, 331 of which have not yet been delivered, according to a report on domestic news website thepaper.cn on Saturday.

Some Chinese experts have suggested that China cancel deals that have not yet been finalized with the US firm and require Chinese companies not to place future orders with Boeing.

“If China were to impose tariffs on Boeing aircraft, Chinese companies would definitely not put in new orders for them,” Lin Zhijie, an independent civil aviation industry expert, told the Global Times on Sunday.

“Generally speaking, there are no significant differences between Boeing and Airbus aircraft in terms of performance and cost. [Chinese companies] don’t have to buy from Boeing.”

Source: Global Times

50-60 million Chinese troubled by sleep disorder: reports

About 50 t0 60 million Chinese are troubled by sleep disorders, and less than 2% receive treatment, said two reports on Chinese people’s sleep quality issued on Mar. 17, just four days ahead of this year’s World Sleep Day.

People enter a deep state of relaxation to release stress while under the guidance of professional hypnotists in Taiyuan, North China’s Shanxi province, March 21, 2018. [Photo/Chinanews.com]

The report said that 56% of Chinese internet users think they have sleep issues, such as few dreams and light sleep.

According to Han Fang, chairman of the Chinese Sleep Research Society, there are only 5.8 beds available for every one million Chinese with sleep disorders in China’s more than 2,000 sleep clinics.

“China lacks sleep specialists, while the US has thousands of Registered Sleep Technologists,” Han noted.

People born in the 1990s accounted for over 60% of the group troubled by sleep issues, making the largest contribution to online consumption of sleep aids. Blindfolds, earplugs and foot pads were the top 3 most popular sleep aid products in 2017 in China.

Sleep disorders may cause dementia which could further trigger the Alzheimer’s disease, said Ye Jingying, director of the Chinese Medical Doctor Association Sleep Medicine Specialized Committee. Sufficient sleep will protect the brain and reduce the risks of developing the Alzheimer’s disease, she added.

Young people in Beijing sleep the shortest time, which is less than 7 hours per day, due to high work pressure. Furthermore, employees in finance and service industries, as well as government officials have the worst sleep quality, according to the reports.

Nearly 90% of Chinese internet users stare at their smart phones before sleep, spending an average of 65 minutes doing so. 58% of the people born after 1995 may even spend 80 minutes.

Experts said that the blue rays emitted by devices such as cell phones and computers will increase people’s level of alertness and excitability. Using cell phones before bed will reduce the time of rapid eye movement (REM) sleep which is a key process of mental recovery.

They suggested that people maintain a healthy routine and never stay up to guarantee enough sleep time.

China will take counteractions if US keeps provoking trade war: expert

Though China does not want a trade war, it will firmly confront the challenge if the US keeps provoking one, said Bai Ming, deputy director of China’s Ministry of Commerce’s International Market Research Institute in an interview with ThePaper.cn.

Earlier on Thursday, US President Donald Trump signed a memorandum that could impose tariffs on up to $60 billion worth of imports from China and propose restrictions on Chinese investment in the United States. It is the latest unilateral move by the US that would pose a threat to global trade.

The memorandum is based on a so-called Section 301 investigation into alleged Chinese intellectual property and technology transfer practices, launched by the Trump administration in August 2017.

The tariffs will target 100 imported Chinese goods in as many as 100 categories, hitting everything from shoes and clothing to consumer electronics.

“We want no trade war with anyone, but if our hands are forced, we will not quail nor recoil from it,” said Hua Chunying, spokesperson of China’s Ministry of Foreign Affairs, on Wednesday.

According to Bai, China made important initial progress in carrying out the 100-day action plan with the US during 2017, and companies from both countries signed deals worth more than $250 billion dollars during Trump’s state visit to China. These are practical and sincere actions taken by China, he added.

“If the US is not seeing our good intentions and on the other hand making further provocations, we will definitely fight back, with necessary countermeasures,” Bai noted.

The tariffs are placed under the banner of China’s “unfair practices”, but what lies under the tariffs is a protectionist approach, the deputy director explained.

Associate researcher Su Qingyi of the Institute of World Economy and Politics under Chinese Academy of Social Sciences told ThePaper.cn that the tariff will definitely bring about negative impacts on Chinese export industry.

But it will not be able to narrow the trade balance between China and the US in a way that will be detrimental to China, Su added, saying that in such a case more Chinese enterprises may choose to shift their markets to other countries.

Experts analyzed that China would probably take counteractions by imposing high tariffs on the US products that are exported in high volumes to China, for example, soybeans, automobiles and planes.

The range is smaller than that of the US, but it centers on agriculture, an industry that has a big influence on the US politics, said Alec Philips, chief US political economist for Goldman Sachs Research.

The US has the demand for Chinese imports, but it doesn’t manufacture these products, said Cao Dewang, founder and head of the world’s top auto glass manufacturer Fuyao Glass, adding that it is the source of the trade balance between the two countries.

He believes that the increase in tariffs is not a solution as long as there’s demand

Chinese students lead world in learning time: report

A report said Chinese primary and secondary school students spend more time on excessive homework inside and outside of school as well as for extracurricular tutoring than their peers in other countries, the China Youth Daily reported on March 22.

The average time spent on extracurricular courses on weekdays was 0.8 hours in 2015, and 2.1 hours on weekends, doubling and tripling that of 10 years ago, respectively, according to the 21st Century Education Research Institute.

These excessive burdens take away from their time to sleep and do sports resulting in more nearsighted and obese students and adding mental as well as financial pressure to the students and their families.

Han Ping, deputy director of the Education Department of Zhejiang province, said this year’s report on the work of the government draws attention regarding the problem of heavy extracurricular burdens on primary and secondary school students.

Fair and high-quality education results from widespread demand for better living standards. Therein, heavy schooling and extracurricular burdens on primary and secondary school students are specifically a reflection of unbalanced and inadequate developments in the education sector, Han said.

A report shows that in 2016, the market value of extracurricular training classes for primary and secondary school students in China exceeded 800 billion yuan, with 137 million students being involved.

To cool down the overheated extracurricular training market, education experts and officials suggest that schools step up scientific management to convey to teachers that lessons and instructions should be based merely on the curriculum.

Furthermore, a scientific system to evaluate students should be developed to make sure that school admission will not be based on exam scores at the compulsory education stage, Han said.

School tutoring classes should also be regulated, and it should be made sure that they do not disturb the original education order. In addition, vicious links between some school teachers and private training centers should be cut.

Soybeans trade likely to become China’s first retaliation to U.S. tariffs: expert

Experts say China is likely to adopt measures on soybean imports from the U.S. as its first move in retaliation to the latter’s increasing tariffs on imports from China, Thepaper.cn reported on March 22.

China’s market receives the largest number of US planes and soybeans. Statistics show that 62% of US soybeans ended up in China. On the other hand, what China exports to the US is mostly something they have no comparative advantage in making or do not make at all, said Hua Chunying, spokesperson for the Ministry of Foreign Affairs, during a press briefing on Wednesday.

The US is on the one hand urging China to buy what it wants to sell, while refusing to sell what China wants to buy, Hua noted.

She called on the two sides to calm down and have constructive dialogues and consultations in the spirit of equality, and furthermore to consider mutual benefits and mutual respect for the purpose of seeking out a win-win solution.

The U.S. President Donald Trump signed on Thursday a memorandum that could impose tariffs on up to 60 billion U.S. dollars of imports from China, despite strong warnings from business groups and trade experts.

The American Soybean Association (ASA) expressed concerns about a potential trade war that may inflict heavy losses on the U.S. soybean industry following the U.S. decision to hike tariffs on China’s steel and aluminum imports, the Financial Times reported.

ASA President John Heisdorffer noted that China is the largest buyer of U.S. soybeans in the world. Global competitors in the soybean industry like Brazil and Argentina will be alternatives for China. Also, the potential tariffs would bring US soybean growers a tough life.

ASA’s worry is not groundless. Nearly 62 percent of U.S. soybeans are exported to China, indicating the U.S. soybean industry will be greatly impaired if China sets a trade barrier on soybeans imported from the U.S.

Moreover, soybeans from the U.S. are not irreplaceable to China, as China has been strengthening cooperation with big soybean exporters in South America.

For example, China recently increased its purchasing volume of soybeans in Brazil.

Chi Jingtao, CEO of COFCO, China’s leading foodstuffs conglomerate, noted that the company is to raise its purchasing amount of soybeans from 4 to 7.2 million tons from Mato Grosso each year, according to Reuters in November 2017. The Chinese enterprise is also planning to invest $459 million to build 30 grain barns in Brazil.

In addition, Chinese enterprises are helping Brazil with infrastructure construction to help the country improve its export capability of soybeans.