The rise of Chinese investment in Hollywood is raising alarms in Congress, which could complicate studios’ ambitions to strengthen ties to the Middle Kingdom.
The latest salvo came in a letter from 16 members of Congress last week, which called for closer scrutiny of Chinese investment in the U.S. entertainment and media sectors. The letter cited the Dalian Wanda Group’s acquisitions of Legendary Entertainment, AMC and Carmike Cinemas, and warned of “growing concerns” of Chinese efforts to exert “propaganda controls on American media.”
Wanda has been on a buying spree, of late, announcing a merger between AMC and Carmike that would make it the largest exhibitor in the world. Earlier this week, news broke that Wanda plans to form a multi-picture alliance with Sony Pictures.
Rep. Chris Smith, a Republican from New Jersey, warned that growing Chinese investment could raise strategic concerns.
“Would we raise questions if Russia or Iran was buying large parts of U.S. media and entertainment companies? Of course we would,” Smith said in a statement to Variety. “Raising questions about Chinese investment is no different.”
The principal author of the letter is Rep. Robert Pettinger, R-North Carolina, who has been outspoken in the past about various Chinese acquisitions in other sectors. Two Democrats joined 14 Republicans in signing the letter, which seeks a review from the Government Accountability Office of existing regulations. Under current law, foreign deals that may pose national security concerns go before the Committee on Foreign Investment in the U.S., a body made up of various administration agencies. The letter also warns of foreign investments in agribusiness and telecommunications, and includes some pointed commentary about the level of overseas money in the media business.
“Should the definition of national security be broadened to address concerns about propaganda and control of the media and ‘soft power’ institutions?” the letter writers ask at one point.
Derek Scissors, a scholar at the American Enterprise Institute, said that with China breaking records for U.S. investment it was inevitable that Congress would get involved.
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