MAGIC VS. MIDDLE KINGDOMS DECEMBER 3, 1996 TRANSCRIPT

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The Walt Disney Company has announced that it will distribute a new film about Tibet's spiritual leader, the Dalai Lama, despite warnings of economic retaliation by the People's Republic of China (PRC). The threats put in question a number of extremely lucrative business deals, including a proposed "Disney World" in the PRC.

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A RealAudio version of this NewsHour segment is available. November 26, 1996: Out-going Secretary of State Warren Christopher discusses the U.S./China relationship and other elements of America's foreign policy. November 25, 1996: President Clinton is extending his hand to China's leadership, despite its notorious human rights record. A panel discusses the merits of the president's decision. November 21, 1996: Margaret Warner examines the APEC summit at Manila and the explosive economies of Asia. Browse the Online NewsHour's coverage of Asia.

ELIZABETH FARNSWORTH: The Magic Kingdom stood up to the Middle Kingdom last week. The Walt Disney Company announced it would honor its contract to distribute a new film about the Dalai Lama, Tibet's spiritual leader, in spite of warnings of economic retaliation from China. Disney's "The Lion King" was one of the biggest grossing movies in China last year, and the company had been discussing a wide range of new business deals with leaders in Beijing, including a Disney World type theme park. So, much was at stake in the showdown over the Dalai Lama film which is now being shot in Morocco by director Martin Scorsese.

For some perspective on this story, we turn to Orville Schell, dean of the University of California at Berkeley Journalism School and author of several books about China, including one currently in the works about American perceptions of Tibet; Ya-sheng Huang, professor of China studies at the University of Michigan; and Jim Bates, a business writer who covers the entertainment industry for the Los Angeles Times. Welcome to you all. Jim Bates, fill in the story a bit for us. What do we know about who actually threatened what?

JIM BATES, Los Angeles Times: Well, Disney has been talking for some time to China about ways it can develop its business there, and Chinese government officials recently sent some not- so-subtle signals that they weren't happy with the fact that Disney was distributing this movie in the United States. It's--and Disney's response was finally--when this became public, Disney put out its statement last week that it would, in fact, go ahead and distribute the film. What's unique about this, and kind of unprecedented, is that Disney's agreement is to only distribute the film in the United States, to put it in cineplexes and in Denver, in Minneapolis, and wherever. It's not talking about distributing it in China.

ELIZABETH FARNSWORTH: And just to get the facts straight here, Disney owns the company that's co-producing the film "Touchstone Pictures" and it is only distributing in the United States. A French film will distribute it in Europe and elsewhere, right, but not in China? Okay, Orville Schell, do you have anything to add just to the facts of the case what we know about what threats were made by whom, when?

ORVILLE SCHELL, University of California, Berkeley: Well, I think we may look forward to other films falling under Chinese scrutiny because indeed there's a whole host of them coming out--one by Jean Jacques Aneau, with Brad Pitt, "Seven Years in Tibet," another one by Steven Segal, an action picture about CIA, Tibetan guerrillas in the 50's and 60's, so I think we're sitting really at the edge of Tibet about to enter the popular culture, not simply of the United States, but indeed with Hollywood as a vector into the world.

ELIZABETH FARNSWORTH: Why Tibet? Why is Tibet such a sensitive subject for China?

ORVILLE SCHELL: Well, I think one of the few things the party leaders now still have to legitimize their rule is the notion that they have unified China, which is, of course, an aspiration of every leader, from whatever dynastic period, and I think this is what rates Hong Kong, Taiwan, and Tibet with such enormous significance, because they do have errant tendencies, centrifugal tendencies to stay independent or break loose, and so anything that appears to be a foreign complicity with any of these pieces of errant Chinese real estate, such as the films under discussion, occurs to the Chinese leaders as a great provocation and incitement.

ELIZABETH FARNSWORTH: Ya-Sheng Huang, do you think that it's because of Tibet that this has become an issue, or is this a warning, not only about this film but about other, other potentially charged issues too?

YA-SHENG HUANG, University of Michigan: Well, I think it is Tibet by and large has over-- Tibet has been a very politically sensitive issue in China, because the Dalai Lama enjoys a tremendous international prestige overseas. He won the Nobel Prize for Peace--Nobel Prize for Peace--when China cracked down on the students, and then there is a tremendous support from the Hollywood community for the Tibetan independence movement. I shall add that China two years ago was extremely rudely surprised by the fact that Richard Geer going onto the podium in the live broadcast of the Oscar Award ceremony, denouncing the Chinese government's policy, so there has been a historically, a tense relationship between the Chinese government and some Hollywood community over the issue of Tibet.

ELIZABETH FARNSWORTH: Mr. Huang, do you think that the Chinese government understood that it might not be able to stop this film, that this was meant to warn people about future projects like this?

YA-SHENG HUANG: Well, I think it is less true. It is meant to be a warning to other producers, but, again, as Orville Schell has pointed out, there are some film projects being on the way. Sony Tri-Star pictures is producing a film about Tibet, and also the Chinese government doesn't quite understand that this is a private corporation, that prices of artistic freedom is not very easy to deal with people like Michael or Martin Scorsese, unlike other corporations, such as say Ford or GM. And these are less politically aware, active companies.

ELIZABETH FARNSWORTH: So you think the fact that it's an entertainment--information industry is making a big difference here

YA-SHENG HUANG: It makes a tremendous difference. The Chinese government has traditionally be very sensitive about foreign media for entertainment, and also I should point out that to the Chinese government projecting Mickey Mouse or Donald Duck into the living rooms of the Chinese simply doesn't have the kind of high priority as far as economic development is concerned, as compared with say building a dam or building a highway, so I think the Chinese government is not afraid of offending a corporation such as the Disney Company.

ELIZABETH FARNSWORTH: Jim Bates, explain now. Sent the scene for us so here we have the Disney Company that has all these potential interests. Give us a sense of those interests, faced with this decision, and Martin Scorcese, a very respected director, they'd have to turn him down if they say no-- help us understand the decision they face.

JIM BATES: Well, Disney really didn't have much of a choice. Once this became public, it was very hard for Disney to have cut loose this project and to save any sort of face in Hollywood. And despite whatever aspirations Disney has about how many Dalmatians plush toys, or Toy Story videos that they'd want to sell in China, that's far outweighed by the credibility that they would have among directors in the artistic community and Hollywood, so they really--when it came down to--when this became a public issue, Disney really didn't have a choice.

ELIZABETH FARNSWORTH: And yet, the stake is huge in China for all the film companies, right?

JIM BATES: Hollywood sees China as the biggest untapped potential market that's out there, and it's more than just wanting more revenue. The economics of the film industry are such that movies are extremely expensive these days, 50, 60, 70, 80 million dollar movies are common now when they used to be very rare, stars make a lot of money. And so oftentimes, even though a film may look like a hit here in the United States, whether it becomes profitable or not is often determined by how it does overseas.

So the overseas market is extremely important, and, in fact, represents more than a half the revenue that a film does. So China is this enormous market, and everyone in Hollywood just says, do the numbers, you look at the number of people in China, and even if they just spend a few dollars on their products, it represents a huge amount of revenue, so it's a very sticky issue for everyone in Hollywood when something like this happens.

ELIZABETH FARNSWORTH: Jim Bates, how significant do you think this showdown--that's a bit--word's a bit too strong--but how significant do you think it was?

JIM BATES: I think it was significant in that it drew attention to the potential conflict that not just Disney has but all these companies have. These are large, new multimedia companies that just have enormous--have made very big acquisitions--the way Disney bought ABC, Time- Warner bought Turner, CNN, all these companies have a variety of interests that oftentimes what's going on one hand is in conflict with what's going on in the other hand.

And it really does raise the awareness of it. One of the problems--the question was asked earlier whether this would intimidate people to make these movies, the trouble is you really don't know whether it's a reason or not, and a company can't just shy away from doing these as a preemptive move. They may not even consider a script, or just say, well, we don't think this is very commercial, so you really are not going to know whether these things are happening or not.

ELIZABETH FARNSWORTH: Orville Schell, what do you think is most significant about this?

ORVILLE SCHELL: Well, I think most of the editorials I've read portray this as a sort of Hollywood victory that Mickey Mouse has stood up to Mao, in effect, but I think, in effect, the word has been made quite clear that such projects will earn the disfavor of the Chinese government so in a certain sense, the Chinese have shot themselves in the foot, seeming to have tangled with something maybe too large for themselves. On the other hand, I think they too have won quite a significant victory.

Now, of course, Hollywood is in many ways more powerful than the Pentagon or the State Department, so--and it's also very cantankerous and unpredictable, and it remains to be seen who will win this bout. It's important I think also to recall that China in a way here has stepped outside its traditional bounds, having had quite a bit of success in a very astute foreign policy to bring the United States government around to really its terms for foreign relations. And I think having really brought many American businesses to heal, it now seems to be taking on the king of kings--Hollywood, and it's going to be an interesting bout to follow.

ELIZABETH FARNSWORTH: So you see this as China having tested itself and felt that it won some in former showdowns now testing itself even further?

ORVILLE SCHELL: I think China has been quite successful in a sense manipulating the world to deal on its terms. This is certainly true of business and to some extent foreign policy. I think it wouldn't be too exaggerated to say there's a certain swollen pride there, and maybe pride goes before the fall, but they have now really leapt a firewall into a whole new area whereby they are in essence trying to control somehow what comes out of Hollywood.

That may be more difficult than they imagine. There's a lot of money invested in these films. On the other hand, I think that Mr. Bates is absolutely right. These companies have a clear sense now that if they want to be in that seemingly inexhaustible market of China, it may behoove them not to let such projects even get into the production stage, just table them in the beginning.

ELIZABETH FARNSWORTH: And Mr. Schell, just before I move on to Mr. Huang for comments on what you've just said, why is Tibet suddenly so much in Hollywood's orbit? Why is Hollywood paying so much attention to Tibet?

ORVILLE SCHELL: It's a very interesting question, and I think, you know, the West and America has always had a fascination with Tibet. It is both a place that seems to be a part from all the imperatives of normal industrial life as we live it, but I think a new ingredient has been added since the Chinese occupation in ‘59, and that is the little guy, even though Tibet is as large as western Europe, being kicked around by the big guy, namely China. And that is a very American theme, to root for the underdog, so on top of all the old fascinations with mystery, mountains, remoteness, roof of the world, forbidden kingdom, et cetera, we've added this new dimension which I think makes it a very compelling subject for Americans.

ELIZABETH FARNSWORTH: Mr. Huang, on the point that Mr. Schell made, the Chinese having won some of these battles with other companies and with the U.S. Government, and so now they take on Hollywood, what do you think about that?

YA-SHENG HUANG: I disagree a little bit because Hollywood and media business are traditionally viewed very very differently in China as other corporations.

For one thing, the entertainment firms go into China recently, and they have yet to establish a foothold in China as compared with other corporations which I think are in China and traded with China, and as I said before, China welcomes high tech technology investment, capital investment in China, but to the Chinese government, the Hollywood industry is destroying the national film industry in China--is to some extent polluting the minds of the Chinese youth with images of violence and sex, so to them there is a fundamental incompatibility between what the government tries to project as the values and traditions of the Chinese culture, and what the Hollywood has to offer, so I wouldn't exaggerate the implications of this episode, and I think it's very, very much confined to the entertainment piece of business which shouldn't think that this would have spillover implications for other business concerns.

ELIZABETH FARNSWORTH: Mr. Huang and gentlemen, thank you very much for being with us.

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