Communist Mole

Jack Ma, China’s Richest Man, Belongs to the Communist Party. Of Course.
By Li Yuan

Jack Ma, China’s richest man and co-founder of the e-commerce giant Alibaba, in Shanghai this month. He was identified as a member of the Chinese Communist Party by its official newspaper.
HONG KONG — Jack Ma, China’s richest man and the guiding force behind its biggest e-commerce company, belongs to an elite club of power brokers, 89 million strong: the Chinese Communist Party.
The party’s official People’s Daily newspaper included Ma, executive chairman of the Alibaba Group and the country’s most prominent capitalist, in a list it published on Monday of 100 Chinese people who had made extraordinary contributions to the country’s development over the last 40 years. 

The entry for Ma identified him as a party member.
It may sound contradictory that the wealthy Ma belongs to an organization that got its start calling for the empowerment of the proletariat. 

But Ma’s political affiliation came as no surprise to many Chinese and China watchers. 

Though it still publicly extols the principles of Karl Marx, the Chinese Communist Party largely abandoned collectivist doctrine in the post-Mao era, freeing private entrepreneurs to help build the world’s second-largest economy after the United States.
In fact, the disclosure reveals a party that is eager to prove its legitimacy by affiliating itself with capitalist success stories. 

Ma is a tech rock star in China, and his membership in the party could prod others to follow his lead.
“Even Jack Ma is a party member,” said Kellee Tsai, dean of humanities and social science at the Hong Kong University of Science and Technology, referring to the party’s pitch. 

“Doesn’t it make you want to join the party, too?”
Alibaba declined to comment on the matter. 

The Hurun Report, a research organization in Shanghai that tracks the wealthy in China, estimates Ma and his family’s net worth at 270 billion renminbi, or $39 billion.

Today’s party isn’t exactly exclusive. 

Its members represent nearly 7 percent of China’s population. 

Its ranks include government officials, businesspeople and even dissidents. 

Being a member often suggests a desire to network and get ahead rather than express one’s political views.
For businesspeople in particular, membership is more often a matter of expediency. 

Party membership provides a layer of protection in a country where private ownership protections are often haphazardly enforced or ignored entirely.
Though its constitution still describes members as “vanguard fighters of the Chinese working class imbued with communist consciousness,” the party has veered away from its communist roots and welcomed private entrepreneurs since 2001. 

Some of the richest men in China are party members, including Wang Jianlin of the Dalian Wanda Group, a property and entertainment conglomerate, and Xu Jiayin of the Evergrande Group, a property developer.
It is unclear when Ma joined the party or how much he pays in dues. 

The party sets dues at 2 percent of monthly salary for higher-income members.
The star power of the Chinese entrepreneur class has dimmed since Xi Jinping became the country’s top leader in 2012. 

Under Xi, the Communist Party plays a bigger role in not only Chinese politics but also the economy and everyday life. 

Any entity with more than three party members is required to set up a party cell. 

Some three-quarters of private enterprises, or 1.9 million, had done so in 2017, according to official data.
Companies say they face much greater pressure to set up the cells than in the past. 

Even some of the coolest start-ups in tech-savvy Beijing have designated party-building spaces.
The disclosure of Ma’s membership reflects the thinking that the party controls the economy and society, said Guo Yuhua, a sociology professor at Tsinghua University in Beijing and a critic of the party.
“It’s going backward from the Deng Xiaoping era, when the party advocated the separation of the party and the government,” she said, referring to the party leader who ultimately governed China during its early years of reform in the 1970s and ’80s.
The disclosure also drew attention because Ma had in the past tried to keep his distance from the government. 

But as Xi tightens ideological controls and the power of the state grows, many successful entrepreneurs have made a point of showing their party loyalty.
Ma visited Yan’an, the city often considered the birthplace of the Chinese Communist Revolution, in 2015, according to the Chinese news media. 

Pony Ma, who is chief executive of the internet giant Tencent Holdings, showed up in Yan’an as well this year, wearing a Red Army uniform. 

Yan’an is also where Xi spent much of his teenage years.
In recent weeks, amid signs of a slowing economy and an intensifying trade war with the United States, China’s leaders have taken a softer tone toward private enterprise, making supportive remarks and promising tax cuts.
Making it clear that Ma, the most successful businessman in China, is a member could strengthen the party’s legitimacy.
“Above all,” said Tsai of the Hong Kong University of Science and Technology, “the party is quite open about the fact that it wants to survive.”

Massive Chinese Fifth Column

The Gulag Aperture: Hollywood Becomes Handmaiden To China's Communist Party

By Capital Flows

Wang Jianlin arrives before the company’s IPO at the Hong Kong Stock Exchange on December 23, 2014.

On New Year’s Day, China Central Television (CCTV) unveiled its newest “soft power” entertainment media venture, whose purpose is to extend China’s global media influence. 

Xi Jinping said that the overriding directive of this new collection of television stations and news agencies will be to “follow the party line and promote ‘positive propaganda as the main theme.’”
The CCTV announcement compounds the growing risk that increased Chinese investment will entice Hollywood into volunteering itself as a propaganda division of the Communist Party of China (CPC). 

And if these trends continue, the Western world’s outlet for Chinese dissenters will be closed.
China’s film industry has in recent years grown approximately 34% annually and generated $6.8 billion in 2015. 

While many applaud the very modest political reforms that sometimes complement China’s market liberalization, one should be wary of the country’s iron grip on its entertainment industry.

China’s industry players are inextricably bound to the CPC, as evidenced by the ascent of Wang Jianlin, China’s richest man. 

Jianlin’s successes are a product of quid pro quo arrangements between himself and the CPC’s top officials. 

Further, Jianlin is a delegate to the CPC congress and was a high-level advisor in China’s faux legislature from 2008 to 2013. 

Today, CPC delegate Jianlin can count several American awards shows, including the Golden Globes, the Billboard and American Music Awards, and even AMC Theaters as part of his recently accrued collection.
One may argue that the influence of China’s propaganda machine is overstated. 

After all, Russia has been doing the same thing for years through its RT media network. Economically though, Russia is little more than “Upper Volta with missiles.” 

The Russian Bear simply can’t wield a cudgel or dangle a financial carrot the way the Red Dragon can. 

If Putin threatened to remove Russian funding from Western media, it would be like threatening to remove a bucket of water from the ocean.
Jianlin, on the other hand, has made clear exactly what would happen if President Trump followed up on the U.S.-China Economic Security Review Commission’s recommendation to ban China’s state-owned companies from buying American ones: “Tell Mr. Trump that I have $10 billion of investments in the United States and more than 20,000 employees there who wouldn’t have anything to eat should things be handled poorly.”
Jianlin demands American compliance with Chinese propaganda prerogatives, all while U.S. film investments are barred from the Chinese market. 

It’s no wonder the Justice Department and Congress have begun to look askance at this exclusively CPC-friendly arrangement.
The U.S.-China Economic and Security Review Commission issued a report in October 2015 detailing the consequences of China’s far-reaching propaganda efforts. 

The Commission noted that the chilling influence of Chinese media propagandists is already felt, that it is a “truism” that Hollywood won’t make a film “that the Chinese would reject for social or political reasons.”
The Commission elaborated by explaining that “Hollywood confronts broad consequences when it does not appease Chinese regulators: Captain Phillips found itself $9 million short of its anticipated revenue after finding itself unable to distribute in China [due to censorship].”
Seeds have now been sewn for an American entertainment industry financially beholden to Chinese investors whose purpose and direction begins and ends with the CPC.
The entwining of Hollywood’s and the CPC’s dual fates, and so Hollywood’s complicity in pitching communist propaganda, will persist so long as China continues its aggressive courtship. 

An announced production and distribution partnership between China Film Co. and Paramount Pictures, as well as the $100 million establishment of a U.S.-China cooperative film fund by China Film Co., proves as much.
Is it even possible for the mission of Chinese film and television projects to diverge from the mission of the CPC? 

The evidence isn’t heartening.
China Film Co. is state-owned, meaning that the creative direction of Chinese filmmakers following, say, a $610 million share flotation, will be influenced by the CPC, as will the aforementioned partnership with Paramount. 

Who would believe that this influence doesn’t spill over into Hollywood, when it’s been said that La Peikang, the head of China Film, is the “man to whom Hollywood now goes [to], cap in hand”? Regarding television, the head of CCTV is also the television industry’s chief regulator.
Private companies should be wary of playing devil’s handmaiden to China’s communist propagandists. 

American social media has already proved itself willing to help China’s state apparatus surveil Chinese citizens. 

If the American film and television industry joined in this promiscuous courting of CPC largesse, the net effect might be too great to overcome. 

The CPC’s agitprop would echo across continents.

Chinese Peril

• China’s Dalian Wanda Group faces renewed scrutiny
• Top Senate Democrat Chuck Schumer raises concerns over Chinese conglomerate’s Hollywood takeovers

By ERICH SCHWARTZEL in Los Angeles and SIOBHAN HUGHES in Washington

Incoming Senate Minority Leader Chuck Schumer sent a letter Wednesday calling for further scrutiny of Chinese deals.
A top Senate Democrat is calling for increased scrutiny of China’s ambitions in Hollywood and other sectors, lending a critical new voice to a cause championed by President Donald Trump.
In a letter sent Wednesday, incoming Senate Minority Leader Chuck Schumer said the takeovers of U.S. companies by China’s Dalian Wanda Group Co. and others warrant further scrutiny to determine whether they are being orchestrated by Chinese government interests—leaving U.S. companies to compete on an uneven playing field. 

The move increases the likelihood of a re-examination of how the U.S. allows Chinese to invest in American companies.
“I am concerned that these acquisitions reflect the strategic goals of China’s government,” he told Treasury Secretary Jack Lew and U.S. Trade Representative Michael Froman in the letter, a copy of which was seen by The Wall Street Journal.
Wanda and its U.S.-based holdings have completed several entertainment acquisitions this year, and the conglomerate has a pending deal to buy Dick Clark Productions for $1 billion.
Mr. Trump, who has indicated his administration will also take a closer look at such deals, was copied on the letter.
If the president-elect follows through on promises to scrutinize such deals more closely, Mr. Schumer’s letter could signal a shift for U.S. policy toward China. 

For decades, some lawmakers on both sides of the aisle have been unhappy with the White House, both under George W. Bush and Barack Obama, whom they saw as timid about confronting China, the biggest holder of U.S. debt.
Now, a senior Democratic lawmaker and the incoming Republican U.S. president could be on the same side of the issue, potentially shaking up the landscape. 

Congressional backlash to Chinese investments have lately focused on flashy Hollywood deals, but the outcry could have sweeping ramifications across other sectors of the economy.

Beijing stooge Wang Jianlin

“You can be certain that the new Congress in 2017 will work on legislation to further expand CFIUS oversight authority,” Mr. Schumer wrote, referring to the Treasury Department’s Committee on Foreign Investment in the U.S., which examines foreign deals seen as potential threats to national security. 

CFIUS reviews have traditionally concerned sectors like aerospace.
Wanda has previously responded to similar calls for scrutiny by saying the company “has and will continue to comply with all applicable U.S. law in connection with its media and entertainment investments in the United States, including without limitation making the appropriate filings with the Federal Trade Commission and the Department of Justice.” 

The company declined to comment on Mr. Schumer’s letter.
Mr. Schumer’s stance aligns the Democrat on one issue with the President-elect. 

A document circulated by Mr. Trump’s transition team stated that the administration would ask CFIUS to review foreign transactions that couldn’t be replicated by a U.S. entity. 

That could cover Chinese investment far beyond Hollywood, since Chinese companies can become majority owners of U.S. assets but China doesn’t allow U.S. companies to do the same.
Mr. Schumer said the ability for Chinese companies to take a majority stake in U.S. assets, often backed by state officials and China’s sovereign-wealth funds, is unfair considering stateside companies are handicapped from doing similar deals in China. 

U.S. companies hoping to do business in China usually have to form a joint venture that often includes the sharing of intellectual property—an arrangement that Mr. Schumer called a “pay to play system.”
“While China’s government has aggressively pursued policies that encourage strategic acquisition in the U.S., U.S. companies continue to face steep barriers to market access in China,” he wrote. 

Mr. Schumer said Chinese acquisitions across multiple sectors—information technology, transportation, manufacturing and agriculture, among others—are often supported by Chinese government subsidies designed to encourage global expansion.
Like several politicians before him, Mr. Schumer set his sights on Wanda, whose chairman, Wang Jianlin, is China’s richest man, according to Forbes. 

Wanda’s acquisitions in Hollywood have raised concerns among politicians and some entertainment executives that they are “soft power” plays designed to spread Chinese propaganda and messaging through American media. 

The country is the second-largest movie market in the world behind North America, but it imposes a quota of 34 movies that can be imported from ALL countries to its theaters each year.
In the past several years, Wanda has become the world’s largest movie-theater operator through its $2.6 billion acquisition of AMC Entertainment Holdings Inc., expanded into film production with the $3.5 billion purchase of Legendary Entertainment and its Dick Clark deal signaled an expansion into television. 

Wanda has become known in Hollywood for an insatiable interest in acquiring more assets, and Wang has publicly indicated his hopes to own one of Hollywood’s major studios.
Congressional scrutiny of China’s media acquisitions has been ramping up since September, when 16 members of the House of Representatives asked the Government Accountability Office to investigate whether CFIUS’s authority has kept up with the expanding scope of foreign investment in the U.S.

Chinese soft power: Hollywood take-over on the cards in quest for cultural influence

The term "soft power" has been thrown around the media and academic circles for the last couple of years, but its currency has heightened in regards to Australia's relationship with China.
By MATTHEW CARNEY

Xi Jinping's directions for China's soft power strategy are specific: "To give a good Chinese narrative and better communicate China's messages to the world. To be portrayed as a civilised place featuring a rich history, with good government and developed economy, cultural prosperity and diversity and beautiful mountains and rivers."

All countries practise some form of soft power — the ability to coax and persuade other countries that their culture and values are desirable — through organisations like the British Institutes, Alliance Française or the Goethe Institutes.
American soft power regularly tops the tables and largely because of its popular culture, like Hollywood films or corporate labels like Levis.
In North Asia, South Korea has been successful with K-pop songs like Gangnam Style.
It is a recognition that for nations to be powerful they need more than economic might and military threat. 

They need soft power.
Soft power is by its very nature not coercive and is determined by its ability to appeal and attract others.
China has realised this and come to the game much later than most other countries. 

In the late 2000s, it identified "the threat theory" that much of the Western world sees China as distinctly unfriendly.
Now China is devoting billions to try to refashion its image.
Xi Jinping has made it a priority and has said China has to become a "cultural superpower".
His directions for China's soft power strategy are specific: "To give a good Chinese narrative and better communicate China's messages to the world. To be portrayed as a civilised place featuring a rich history, with good government and developed economy, cultural prosperity and diversity and beautiful mountains and rivers."
A big part of the plan is to take over Hollywood. 

The Chinese want to take back some of the popular global narrative to drive their message home. 

It means no longer will China be presented as the bad guy, but as a noble civilised place as Xi wants.
The Chinese have the market power to make sure it happens.
In 2018, China will become the world's biggest box office, surpassing America, and it will keep growing, at least doubling before peaking.
Now in China, 22 new cinemas open everyday.
Hollywood producers are now considering the "China factor" in any future profitability. 

Stories and narratives are changing to become more appealing to the Chinese. 

Many of the world's future blockbusters will be made in China.
When the Oriental Movie Metropolis in the Chinese coastal city of Qingdao becomes operational next year it will dwarf any Hollywood studio.
Thirty big-budget films are slated in first couple of years. 

The first, The Great Wall, with a budget of $180 million, has Hollywood star Matt Damon playing the suspicious savage who is finally convinced by a noble Chinese warlord and beautiful maiden to take up the good Chinese fight.
The man in charge of making the reality a vision is Wang Jianlin — China's Rupert Murdoch — and he has the backing of the top leadership.
Wang is a party member and spent 16 years in the People's Liberation Army before he quit to build a real estate and media empire.
Wang has gone on a $10-billion buying spree and is buying up Hollywood one piece at a time. 

He has bought US production house Legendary Entertainment and Dick Clark Studios.
He has also purchased AMC entertainment — the second-biggest cinema chain in the US — as well as snapping up Europe's biggest cinema group Odeon and Hoyts in Australia.
A big part of Xi Jinping's plan for China to become a "cultural superpower" is to take over Hollywood. 

Australia 'fertile ground' for China's soft power
But film is just one part of China's soft power strategy. 

The Government has put $10 billion into promoting Chinese traditional culture and language. 

It has set up 500 Confucius institutes in 140 countries all controlled by the Central Propaganda Committee in Beijing.
Australia has been fertile ground for China's soft power. 

Fourteen Confucius Institutes have been established at Australian universities and 60 schools around Australia have introduced Confucius classrooms.
Many say it is smart and proper to establish a bigger understanding and deeper relationship with our biggest trading partner. 

But others say the Confucius institutes overstep the mark, and attempts at soft power backfire when the Chinese try to control what can be said about human rights or the independence of Taiwan or Tibet.
Chinese "values" clash with Australian ideals of freedom of speech and inquiry.
There are a growing number of Australian academics like former ambassador to China Stephen Fitzgerald, who say the Confucius institutes should be scrutinised much more as they compromise academic integrity.
At Peking University I had the good fortune to hear the man who invented the term 'soft power' and inspired the Chinese leadership to take up the cause, Harvard professor Joseph Nye.
But Professor Nye says China's soft power has fundamental flaws.
Its claims in the South China Sea undermine attempts to make it appear friendly or attractive. 

Also, its program is being driven by the top leadership and not the people.
Professor Nye says soft power is usually more successful if it comes from the grass roots and is not a dictated program.
"Civil society is really crucial to developing soft power and I think it's very difficult for the party to unleash the full talents of China's civil society," he says.
Professor Nye says it will be some time yet before China overtakes America as the dominant global power, so in the meantime, get ready for more Chinese "heroes" at the movies.

Trump Victory Puts Nail in Coffin of China M&A Ambitions

By Nisha Gopalan

There are two things that M&A bankers hate: protectionism and uncertainty.
Donald Trump's unprecedented election win delivered both, and has the potential to slash the number of Chinese companies snapping up American assets.
It took Chinese acquirers years after a 2005 bid for oil producer Unocal Corp. failed on national security grounds to summon up the courage to wade in again. 

Beyond post-credit-crisis rescues like China Investment Corp. buying a stake in Blackstone Group LP, it wasn't until 2012, when billionaire Wang Jianlin's Dalian Wanda Group Co. bought theater chain AMC Entertainment Holdings Inc., that aggressive buying of U.S. assets really took off.
This year has been especially busy, with Chinese firms making a play for everything from hotels to home-appliance businesses.
It's also been the year, however, when national security concerns have contributed to the collapse of many China-led deals. 

Anbang Insurance Group Co. never did buy Starwood Hotels & Resorts Worldwide Inc., whose St. Regis Washington D.C. hotel is just blocks from the White House.
Trump's protectionist rhetoric is no secret, so it stands to reason that U.S. rejections of Chinese transactions will probably increase. 

He's said he plans to slap a 45 percent tariff on imports from China and has long labeled Beijing a currency manipulator.

That openly hostile view isn't good news for deals that come under review by competition watchdog CFIUS, although HNA Group Co.'s $6 billion offer for computer hardware distributor Ingram Micro Inc. did win approval recently. 

U.S. lawmakers are also railing against a Chinese aluminum entrepreneur's plans to buy Cleveland-based Aleris Corp.
Concern has also been expressed about so-called soft-power acquisitions, as Gadfly has detailed previously. 

That won't help Wanda's Wang as he searches for growth amid lackluster box-office sales at home.
Futures on the S&P 500 plunged as much as 5 percent after Trump's victory, before recouping those losses and closing higher once U.S. trading opened. 

Asset-price volatility is the enemy of M&A. 

Activity dried up after the global financial crisis even though valuations plunged.

No Deal
M&A activity gets hit during times of uncertainty, like 2009 when the world was reeling from the credit crisis

For now, Europe could be a better answer to China's hunger for offshore purchases. 

China National Chemical Corp.'s $43 billion takeover of Switzerland's Syngenta AG has received the green light from CFIUS and is awaiting European regulators' blessing.
Cutting off access to assets in America also removes a huge pool of technology and well-known brands, not to mention some 325 million potential consumers. 

Faced with slowing economic growth at home, that won't be terribly palatable to Chinese companies with international ambitions. 

But with Trump as leader of the free world, they may have no choice.

Chinese Peril

Dalian Wanda: China’s Propaganda Puppet
By RICHARD BERMAN
China's Goebbels Wang Jianlin

AMC Entertainment. Carmike Cinemas. Legendary Entertainment. Lionsgate Corporation. Paramount Pictures.
They are mainstays of America’s movie industry, either producing content or distributing it to the masses. 

But these film studios and movie theater chains are tied tighter together through a Chinese businessman with infinite ambitions: Wang Jianlin, the founder and chairman of Dalian Wanda.
To most Americans, Dalian Wanda, a Chinese firm owned by Wang—China’s wealthiest man—remains an unknown. 

Yet Wanda has emerged as a global player determined to consolidate the U.S. movie industry under one parent company. 

In 2012, Wanda bought AMC—the second largest movie theater chain in the country—for $2.6 billion. 

It purchased Legendary—the producer of The Dark Knight Trilogy—for an even heftier $3.5 billion in January of this year. 

Wanda-owned AMC now plans to buy Carmike for $1.2 billion, forming the country’s largest chain with 8,380 screens in more than 600 theaters. 

The company has also shown interest in buying at least a portion of Lionsgate and Paramount—if not all of Hollywood’s “Big Six” studios.
On the surface, Wanda’s motivations are monetary. 

Wang strives to turn Wanda into “a juggernaut” in the movie industry through high-dollar mergers and acquisitions—granting him greater control of major production and distribution channels. 

Wang’s incendiary rhetoric against Disney—one of Wanda’s major competitors in the entertainment tourism space—confirms his relentless pursuit of greater market share. 

In his words: “We want to smash them. It’s not personal—it’s where the interest of the company lies.” (Wang has likened Disney to “one tiger” competing against his “pack of wolves.”)
But his ambitions transcend buttered popcorn and glitzy theme parks. 

A former Communist deputy, Wang has steered at least $1.1 billion in government subsidies to Wanda. 

He has sold company stakes to relatives of China’s most powerful politicians and business executives, including the business partner of former Prime Minister Wen Jiabao’s daughter and relatives of two members of the Politburo—the Communist Party’s principal policymaking committee. 

Qi Qiaoqiao, the elder sister of  Xi Jinping, was also an early Wanda investor.
Wang’s connections to China’s political elite signal his broader agenda: Promote Chinese propaganda. 

In recent years, Xi has vowed to promote China’s “cultural soft power,” specifically in the realm of “international communication.” 

To that end, Communist officials have pledged government support to Wanda and other companies making cultural inroads abroad. 

As Wang admits, the soft-power policy—spreading favorable and stifling unfavorable depictions of China—is “very beneficial” to Wanda’s bottom line.
It blurs the line between Wanda’s interests and the Chinese government’s. 

Shortly after acquiring Legendary in January, company officials called it “China’s largest cross-border cultural acquisition to date.”
With it, Wanda acquires the ability to influence the development of movie scripts, heaping praise onto the Chinese government and tempering criticism where Wang sees fit.
History is rife with examples of movies altered pre-release to appease Chinese censors, which force filmmakers to rewrite scripts according to the Communist Party’s wishes if they hope to gain entry into China’s lucrative market. 

Pixels—the 2015 action-comedy flick—initially depicted aliens blasting a hole in the Great Wall. 

The scene was removed entirely from the final version of the movie. 

Similarly, the 2012 remake of Red Dawn originally featured Chinese soldiers invading an American town. 

Producers changed the invaders into North Koreans without even receiving a formal complaint from Beijing.
Wanda seeks greater sway in the creative process. 

Wang’s company recently bankrolled Southpaw’s $25 million production budget, becoming the first Chinese firm to “solely finance an American movie.” 

And it left fingerprints everywhere. 

According to David Glasser, who helped produce and market the film, “(Wanda was) involved — it wasn’t just a silent investment.” 

Glasser went even further: “They were on the set and involved in production, postproduction, marketing, everything.”
“Everything” includes distribution, which undergirds Wang’s interest in an AMC-Carmike merger. Controlling America’s largest movie theater chain allows the Chinese businessman to dictate much of what gets shown in the U.S.—and what doesn’t. 

It’s no surprise that AMC’s cinemas showed no Chinese films before Wanda’s takeover, yet now put on double-digit productions every year. 

As Wang points out, “More Chinese films should be in…theaters where possible.”
Could that include a new war movie called South China Sea?
All signs point to no.

Chinese Peril

Why DC Started Caring About Dalian Wanda Group and China in Hollywood
By Matt Pressberg

China’s Dalian Wanda Group made its first big splash in Hollywood back in 2012, when it acquired AMC Theaters. 

Since then, the real estate and media conglomerate has been on quite a shopping spree, including buying “Jurassic World” production company Legendary Entertainment for an aggressive $3.5 billion in January — which made Wanda the first Chinese company to own an American studio or production house.
But it was only the past few days when D.C. really took notice — and began pushing back.
The Washington Post published a strongly worded Oct. 5 editorial that raised red flags over the possibility of China’s ruling party using its entertainment assets to spread propaganda.
Also last week, the Government Accountability Office agreed to a request from 16 members of Congress to review the legal powers of a foreign investment committee, and Rep. Jim Culberson sent a letter to the Department of Justice urging it to take another look at the Foreign Agents Registration Act, specifically mentioning Wanda’s entertainment purchases and their potential to be used for “propaganda purposes.”
So why did Washington decide to start paying attention now?
For one, Wanda — and other Chinese firms — are stepping up their investments in Hollywood. 

Co-financing deals between U.S. studios and Chinese partners have been booming for a couple years now, including arrangements such as Lionsgate’s deal with Hunan TV, STX’s with Huayi Bros. and Universal’s with Perfect World Pictures.
This year, in addition to purchasing Legendary, Wanda was also a leading contender to buy a minority stake in Paramount Pictures — before that was taken off the table — and is also in talks to acquire Dick Clark Productions for $1 billion.
Wanda isn’t a typical entertainment company, either. 

Its founder and CEO, Wang Jianlin, is China’s richest man and very close to the ruling party. 

Several individuals with ties to government officials have significant economic interests in Wanda’s businesses. 

Wang has made no secret of his desire to spread “Chinese values” around the world via entertainment, making that point — and criticizing U.S. rivals like Disney — in a blustery fashion that can rub people the wrong way.
But as members of Congress have plenty of issues to occupy their minds and public pronouncements aside from Chinese investments in entertainment companies, one instrumental factor in the recent string of fusillades from Capitol Hill has been a campaign by Richard Berman, the president of D.C. lobbying firm Berman & Co.

Berman started paying attention to the fire hose of Chinese money flowing into Hollywood this summer and had one of his staffers do more research, realizing it was bigger than he thought. 

He then began reaching out to sympathetic legislators.
“We reached out to some people on the Hill that we knew already had an agenda,” Berman told The Wrap. 

“There are people who are predisposed to being suspicious [of China] because of some other issues. And a lot of those people have committee assignments that overlap [with Chinese investment in Hollywood].”
Berman said last week’s events were the culmination of that work, and that someone on his staff had been in touch with Culberson.
“My fingerprints are all over this,” he said.
Berman acknowledged that studios tailoring their product to appease the China’s gatekeepers — don’t expect to see a Chinese villain in the next James Bond film — is primarily a business decision driven by the desire to get into the world’s second-biggest and one of its fastest growing movie markets, but he’s more focused on China’s ownership of distribution outlets.
“The issue of censorship in China is not my concern,” he said. 

“People changing their movies so they can be shown in China is not my concern. The thing that really triggered my interest is the distribution issue. If you control distribution, you control what the retail market sees.”
To that end, Berman pointed out Wanda’s ownership of AMC Theaters, which is currently in talks to acquire Carmike Cinemas — making it America’s biggest theatrical exhibitor. 

He said he had conversations with AMC personnel that didn’t give him great comfort that the theater chain would be free to show movies that the Chinese government didn’t like.
“Wang has been pretty blatant that AMC is owned by the Chinese,” he said.
Berman said he’s doing this “just to make people aware,” adding that he’s satisfied with last week’s Washington Post editorial and the correspondence between members of Congress and the GAO and DOJ.
“I’m not trying to make this a McCarthy-ite type issue; but as far as I’m concerned, it needed to have more light shown on it,” he said.

Media Censorship

Justice Dept. Is Asked to Review Chinese Company’s Hollywood Purchases
By MICHAEL FORSYTHE

Wang Jianlin, chairman of Dalian Wanda Group, in Beijing in August. 

HONG KONG — The aggressive expansion of the Chinese company Dalian Wanda Group into the American film industry drew increased scrutiny from Congress this week as a prominent lawmaker asked the Justice Department to review a spate of recent purchases by the company, which has close financial ties to relatives of senior Chinese Communist leaders.
The congressman, John Culberson, Republican of Texas and chairman of a subcommittee overseeing the Justice Department in the House Appropriations Committee, asked the department in a letter to review Wanda’s acquisitions as part of an effort to overhaul and possibly broaden rules on foreign purchases of United States companies and to review decades-old laws governing foreign agents in the country.
Wanda, now the world’s biggest owner of movie theaters, bought AMC Entertainment Holdings, a chain based in the United States, in 2012 and is bidding to buy its rival Carmike Cinemas. 

In January, Wanda bought Legendary Entertainment, a Hollywood production company, and Wanda’s billionaire chairman, Wang Jianlin, is seeking to buy a major Hollywood studio.
The concern of Mr. Culberson and others is that Wanda’s purchases are part of a move by the Communist Party to expand its global influence to try to ensure that any portrayal of China in Hollywood movies is favorable. 

It has been more than a decade since a Hollywood studio made a major movie critical of China’s authoritarian government.
“These acquisitions, as well as many more cofinancing arrangements, allow Chinese state-controlled companies a significant degree of control over the financing and content of American media that raises serious concerns about how this may be used for propaganda purposes,” Mr. Culberson said in the letter, dated Oct. 6, to John P. Carlin, the assistant attorney general for national security. 

The letter also mentioned recent Hollywood purchases by other Chinese companies.
A spokeswoman for Wanda North America said Friday in an e-mailed statement, “Wanda has and will continue to comply with all applicable U.S. law in connection with its media and entertainment investments in the United States including without limitation making the appropriate filings with the Federal Trade Commission and the Department of Justice.”
The Communist Party ties of Wanda and Mr. Wang were the subject of a New York Times investigation in April 2015. 

The report found that relatives or business associates of four members of the party’s ruling Politburo, including relatives of Xi Jinping, were among the company’s earliest outside investors. 

All appear to have earned spectacular returns.
Shares held in the name of a niece of one Politburo member, Wang Zhaoguo, multiplied in value by more than 1,000, from less than $500,000 at the time they were acquired in 2007 to more than $600 million in early 2015, the Times investigation found.
Wang Jianlin, a longtime Communist Party member, was a delegate to the 2007 congress that chose the next generation of party leaders, including Xi. 

From 2008 to 2013, he was a member of the standing committee of the Chinese People’s Political Consultative Conference, a high-level advisory body to China’s legislature. 

A company owned by an employee of the son-in-law of the body’s chairman at the time, Jia Qinglin, had acquired a stake in Wang’s family holding company only weeks before the 2007 party conclave, The Times found.
By early 2015, those shares were worth more than $250 million, and a stake in Wanda’s Chinese cinema company that was owned by the son-in-law’s investment company was worth more than $130 million.
Late last month, Wanda fired an executive after he was found to have bribed a local official in the northeastern city of Dalian in 2008 and 2009. 

The official helped the company obtain government approval to complete its transition from a state-owned company to a private enterprise, according to a court judgment.