Remarks at the U.S.-China Film Summit: STATE DEPARTMENT IS OK WITH CHINA TAKEOVER OF U.S. FILM INDUSTRY WHILE D.O.D. NOT PLEASED WITH FIGHTER JET DESIGN ESPIONAGE
Charles H. Rivkin
Assistant Secretary, Bureau of Economic and Business Affairs
Assistant Secretary, Bureau of Economic and Business Affairs
Asia Society Southern California's U.S.-China Film Summit
Millennium Biltmore Hotel
Los Angeles, CA
November 5, 2014
Thank you all for coming here today tonight. It is great to be back in L.A. and to see so many familiar faces. Before I start, I wanted to give a quick shout out to William Feng, who was so instrumental in setting up a similar event for the State Department and the MPA in Beijing two months ago. Thanks again, William.
I am delighted to speak to you today about strengthening and securing the long-term competitiveness of our collective film industries in America and China. By doing so, we can set a powerful precedent for how our two great countries can come together to inspire whole societies and foster prosperity that will deepen our ties, bolster our economies, and make these industries the envy of the world.
I am a strong believer in the power and influence of movies on so many levels. Not only do they catalyze innovation and technology, GDP and job growth; they also promote culture and improve people’s lives.
I say this as someone who has seen – firsthand – how effectively movie characters and Hollywood icons can move people, change their perspectives, and motivate them in positive directions.
As many of you know, I worked for 20 years in the media industry, managing TV, film and animation companies before joining the State Department. And I had the privilege to work with Jim Henson, the man who created the world famous Muppets.
Jim once said “media – if used properly – can be an enormous source of good in the world.” And he lived that philosophy through the programs that he created during his life.
Characters like Big Bird are known the world over. In China, children still watch him on their television screens and know him as Da Nee yao.
But it was in France that I really saw the power of Hollywood icons. As U.S. Ambassador, I thought that some of America’s best and brightest movie stars and entertainers might be just the people to communicate positive messages about our country to younger audiences in the less affluent neighborhoods of Paris – or as they call them, “les quartiers difficiles.”
I watched as stars like Clint Eastwood, Jodie Foster, Robert Redford, Samuel L. Jackson, and Will.i.am talked about their careers to young people – many of whom had given up hope. These talented stars and artists are the embodiment of the American dream and serve as extraordinary ambassadors of American culture.
Working with these and other iconic American figures, I saw how movies can be a cultural force for good in the world, reaching across borders, and transcending race and language.
But our two film industries are showing how movies can also be an economic force for good, bringing prosperity and growth to both sides of the Pacific.
We each have the chance to maximize those benefits – if we can both operate with the certainty and security that come from strong enforcement of intellectual property rights and protection of investor interests.
I’ve spoken to many business leaders in the U.S. motion picture industry, and I know that they’re truly excited about China’s rise as a film market.
Its box office has grown 300 percent over the last five years. And that growth is rapidly accelerating. Last year, China was operating more than 18,100 screens and its film industry grossed $3.6 billion. This year, it’s projected to reach 25,000 screens for a box office total of $5 billion.
American movie industry leaders are also excited about the international partnerships that can grow from this opportunity – which could potentially generate record profits.
So many companies – Chinese and American – are already working together to make this possible.
Companies like Oriental DreamWorks – an American and Chinese joint venture – who are about to release the third “Kung Fu Panda” film… or Fosun Group’s $200 million investment in Studio 8. In addition, the $5.5 billion investment in Shanghai Disneyland will generate more than 30,000 Chinese jobs.
As I look around this room, I see so many dynamic leaders who are helping to shape this bright future. People who are sharing ideas, combining resources, building partnerships, and forging lasting connections.
They are genuinely excited about investing in the U.S., and spoke with great enthusiasm about the friendly and transparent investment climate that America offers.
As our two countries work together to establish common ground and identify shared objectives on many fronts, economic relations have become the bedrock of our bilateral relationship. What we can achieve together in the film industry is a perfect example.
This is what Secretary Kerry means when he says “Economic policy is foreign policy.”
By working together, we don’t lose ground to each other. We help each other expand our respective economies.
Given strong investor and intellectual property protections, the Chinese film and television business will continue developing into a mature, self-sustaining, economically and creatively successful industry.
And the scale and variety of international partnerships that our governments can foster together – just like the movies we make – are limited only by our imagination.
But there are challenges that can keep us from reaching these dreams. They have to do with the world we live in, where the magic that we create remains vulnerable.
It is critical to protect intellectual property rights and open markets so that both of our film industries thrive.
Making a $200 million dollar bet on a new movie or film technology won’t work if a company cannot adequately protect its intellectual property.
The patents and licenses for break-through technologies, and the trademarks and copyrights vital to creating thrilling and enduring movies, allow rights holders to earn and recoup the cost to develop and commercialize their creative ideas.
And as Assistant Secretary of State for Economic and Business Affairs, safeguarding intellectual property rights is one of my key priorities. I always like to remind people that when we talk about intellectual property rights, we’re not talking about abstractions. We’re talking about real people!
Yes, movies matter to us consumers. But they also matter to the people who develop the ideas, the products, and the technology that make them possible. And not just the ones who create, but the ones who work to make ideas a reality.
There are whole industries of women and men – in both of our countries – who develop, produce, distribute, or promote motion pictures and television programs. And whether they are artists, investors, or technicians, their livelihoods depend on the creation of these films that enrich our lives.
It is my job to think about how governments can help by supporting the people who make movies possible.
We can support investors by fostering open markets that allow entertainment businesses to compete on a transparent, non-discriminatory, and fair basis with companies from any other country.
Governments can help protect the contracts that secure investments and build confidence and trust between partners.
When I am at APEC in Beijing later this week, I’ll convey these – and other – messages to Chinese government officials and top CEOs from Chinese and American companies. We’ll discuss ways that we can drive more two-way investment and innovation in the U.S. and China.
And I’ll underscore the importance of completing our negotiations with China for a Bilateral Investment Treaty – which is a key priority for both of our governments. By completing an ambitious and comprehensive treaty, we will ensure that American and Chinese companies can compete in each other’s economies on a transparent, non-discriminatory, and fair basis.
We will have the confidence to operate as partners, knowing that we are protected by the rule of law…
We will be able to protect the patents and licenses for pioneering new technologies that take the movies to new heights…
Rights holders will be able to protect their inventions and products and recoup the costs to develop and fully commercialize their creative ideas…
And a robust treaty will also support our efforts to combat digital piracy, which threatens U.S. and Chinese creators alike. When digital piracy takes hold – whether it’s people illegally filming movies with camcorders, or everyday consumers downloading “free” movies or using illegal streaming services – it cuts into legitimate markets.
When illegal markets are free to thrive, everybody loses. Exhibitors, like those who run spectacular high-tech movie theaters in China and across the world will stall expansion... Investors – whether they are independents or studio executives – will divert capital to other industries... And most definitely, consumers – who will have fewer and lower quality entertainment options from which to choose.
All of these factors will affect both our cultures and our economies. The American and Chinese film industries have so much to look forward to, but face substantial threats.
Unless companies continue to expand collaboration and governments commit to enforce investor and intellectual property rights, we will never be able to achieve the long-term potential that will provide so much benefit to both of our countries.
On my flight “home” to L.A. yesterday, I was thinking about the first Muppet movie, where Kermit the Frog sings, “Life’s like a movie. Write your own ending.”
Our industry has the potential to do just that – write the ending that we would like to see. What’s truly exciting is, we’re just beginning to write that story now.