Monday, March 13, 2017

China’s Getting Angry

For me and my fellow U.S.-based entertainment practitioners, we have noticed the less-than-subtle message (based on consistent action) from the People’s Republic; they seem to be saying that they are not going to approve currency transfers from Chinese yuan into dollars that would be deployed to fund American film productions not physically made in China. For Chinese producers, the notion of creating and globally distributing English-language films with powerful Chinese cultural themes, replete with American stars, may have died hard with the abysmal North American performance of Zhang Yimou’s The Great Wall (a $135 million film starring Matt Damon), which our local trade papers suggest will lose a whopping $75 million.
Dalian Wanda’s billion dollar purchase of awards-ceremony producer, Dick Clark Productions, may be delayed or, more likely, terminated, as PRC authorities have so far refused to approve the necessary currency transfer to effect the deal. Wanda Group is one of the world’s largest movie theater owners (e.g., AMC in the United States) and is truly one of China’s largest entertainment companies, whose assets also include theme parks and studios in the PRC.
Strange that most of these disapprovals have come after Donald Trump made a series of anti-PRC statements, and even as he has backed off questioning the “one China” policy, Beijing is making everyone absolutely clear that it is no longer business as usual with the United States. They’re unhappy about potential Trump trade barriers, challenges to their currency practices (which they think the marketplace has already taken into consideration), challenges to their build-up on the Spratly chain of islands, the South Korean deployment of U.S.-controlled THAAD anti-missile platforms (built to counter North Korean threats) which could impact Chinese systems just as easily, etc. They are happily dumping large chunks of their $1.3 trillion U.S. currency reserves (which effectively support the U.S. federal deficit) with sales of that currency to Japan and Russia.
China has gone so far as to pull down South Korean film and television productions, wildly popular with the Chinese people, terminate visas of South Korean nationals performing in local productions (even blurring out faces of Korean performers in some productions), banned the import of South Korean cosmetics and cancelled tours of K-Pop bands scheduled for live performances in the PRC. Harsh stuff when China is South Korea’s largest trading partner. But that’s what South Korea gets for befriending the United States, they feel.
The disconnect, however, appears to be across the board, not just in the entertainment industry. Absent some powerful strategic reason to allow a PRC investment in the United States, moving money from China into the US has pretty much stopped. While that might not impact PRC companies with massive currency already outside of China, it has pretty much put the kibosh on most American companies seeking PRC investments. And as the United States pulls back on foreign aid around the world, China is right there replacing us as fast as we are withdrawing. Pretty clear who will be calling the shots in a very short while.
But China’s anger is also directed inward. ISIS and their ilk have been plastering the Web with a newly-formatted campaign against China with images showing mistreatment and discrimination against local Muslim Uighurs in China’s far western Xinjiang Province. China and its Uighurs have struggled against each other for years, with riots and killings, many imprisoned having become the norm. Uighurs are pretty helpless against a massive military presence, and ISIS is threatening to launch attacks in China and Chinese nationals now. These Uighur images have become fodder for ISIS, but the Chinese are not sitting idly by and taking it. Beijing has held massive military parades and rallies in that province, a show of force with a clear message.
“China is in the midst of what it calls a ‘people's war on terror’ in its far west. What sparked this latest campaign was a knife attack… After five people were killed on 14 February in Xinjiang, home to China's Muslim Uighur minority, Beijing began an ‘all-out offensive.’ It flew in thousands of armed troops to hold mass police rallies and deploy columns of armoured vehicles on city streets.
“Xinjiang's Communist Party boss Chen Quanguo urged these forces to ‘bury the corpses of terrorists in the vast sea of a people's war.’… But the ethnic Uighur population of Xinjiang has no discernible voice. In the midst of an ‘all-out offensive’ it is dangerous for them to speak up, unless to echo the government's message.
“One contact in Kashgar told the BBC that the situation is "hypersensitive", with all business in the city closed down by night. He said members of his family are summoned to weekly meetings to demonstrate political allegiance… ‘We are reliving the Cultural Revolution,’ he said… [T]he state controlled Xinjiang Daily newspaper has urged security forces to prepare ‘for a battle between good and evil, lightness and dark’ and the region's Communist Party boss warned of ‘grim conditions’ in the fight against terrorism.”, March 2nd.
So what’s really going on here? It’s a double whammy, focused inward and outward, for the world to see. Local PRC oligarchs who are too big for their britches are facing Xi Jinping’s mandated corruption probes, and that new kid on the block, Donald Trump who’s feeling his populist oats from his recent victory in the West, is being put in his place from a China that feels its time has come. As America builds its wall with Mexico, as China’s The Great Wall has failed, it seems that China is building another “great” wall, just for us… and that wall might just be holding. They seem to be hell-bent on making China “great again.”
I’m Peter Dekom, and it not fun to watch as the United States, rather dramatically unprepared for the global pushback, is learning that it does not have the power unilaterally to impose new treaty terms on unwilling partners or to force other world powers to accept its mandates and international requirements

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