China's New Parochialism

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Illustration by Oliver Munday for TIME

On any particularly hot day this month, people around the world will do what they have done for decades: go to an air-conditioned movie theater and watch a summertime blockbuster. The latest, biggest movie is Transformers: Dark of the Moon, which has broken box-office records in the U.S. and in many of the 110 other countries in which it has been released. Except in the world's fastest-growing economy and movie market — China. The Chinese people will not get to see Transformers, nor the eagerly awaited new Harry Potter movie, nor any other Hollywood production. At least not yet. Gao Jun, the deputy general manager of Beijing's New Film Association, explained that no foreign movie would be allowed into China until the Chinese film Beginning of the Great Revival made 800 million yuan, or $124 million, which would be an all-time record for a Chinese movie.

Beginning of the Great Revival is a two-hour tale of the rise of China's Communist Party — released on the occasion of its 90th anniversary — and its heroic leader, Mao Zedong, who is played by a young Chinese heartthrob. The movie features a cast of hundreds of major Chinese actors, including Chow Yun Fat, with impressive sets and design, all at record cost. It has been released in 6,000 theaters across the country. But it doesn't seem to be winning hearts and minds. Despite many mass ticket giveaways, cinema houses are reported to be empty. A barrage of negative reviews on the Internet have been censored. On VeryCD, a pirated-film website, more than 90% of users described the film as "trash."

On one level, this is just a crude propaganda effort by a Chinese regime seeking legitimacy. But there is another aspect to this story. China is going through an internal struggle over whether it needs to borrow more ideas from the West or follow its own particular course. The question of how to handle Western films is becoming part of a much larger debate.

China is on course to become the largest movie market in the world. It has more than 6,200 movie theaters and is adding to them at the astonishing pace of three new theaters a day. But the government seems determined to keep Western movies at bay. There is a strict quota of 20 foreign movies imported every year. Those movies are censored and tightly restricted to a limited number of theaters. Hollywood studios receive only 13% of the ticket price, about half what they get everywhere else in the world. The DVDs are pirated within days, and the government makes no effort to stem this criminal activity. The result is that Hollywood, America's largest export industry, makes very little money in China.

And Hollywood isn't alone. The CEO of General Electric, Jeff Immelt, told the Financial Times earlier this year that it appeared that China did not want Western companies to succeed in that country anymore; he was voicing the feelings of many foreign CEOs. There is growing evidence in many areas that Beijing is favoring locals over Western companies, even violating the rules of market access and trade. The World Trade Organization ruled recently that China's regulations on foreign movies were a form of illegal protectionism and had to end. So far, Beijing has done nothing to abide by that ruling, though it is likely to expand its quotas to mollify the WTO.

Countries play trade games all the time, but this is different. Over the past few years, a new Chinese parochialism has been gaining strength in the Communist Party. Best symbolized by the senior party leader, Bo Xilai, it includes a romantic revival of Maoism, harking back to a time when the Chinese were more unified and more isolated from the rest of the world. It is a reaction to the rampant marketization and Westernization of China over the past 10 years. Bo, who has organized mass rallies to sing old Maoist songs and routinely quotes Mao aphorisms, might well ascend to the Standing Committee of China's Politburo next year on the strength of this new populism.

After centuries of isolation, China has grown in power and strength because it opened itself to the world, learned from the West and allowed its industries and society to borrow from and compete against the world's best. It allowed for an ongoing modernization of its economic structures and possibly its political institutions as well. Its leaders Deng Xiaoping and Jiang Zemin understood that this openness was key to China's success. A new generation of Chinese leaders might decide they have learned enough and that it is time to turn inward and celebrate China's unique ways. If that happens, the world will confront a very different China over the next few decades.