The announcement is applauded by the MPAA, which says it will "return a much better share of the box office revenues to U.S studios."
China has agreed to allow "significantly more job-supporting US film exports" in an effort to provide fairer compensation to Hollywood film producers, the White House announced Friday evening.
After spending the day with Chinese Vice President Xi Jinping in Los Angeles, Vice President Joe Biden said the US and China have reached an agreement that will "make it easier than ever before for U.S. studios and independent filmmakers to reach the fast-growing Chinese audience."
The deal was immediately applauded by the Motion Picture Association of America and its member studios.
“This landmark agreement will return a much better share of the box office revenues to U.S studios, revising a two-decade-old formula that kept those revenues woefully under normal commercial terms, and it will put into place a mechanism that will allow over 50% more U.S. films into the Chinese market," according to the MPAA.
Walt Disney Co. president and CEO Robert Iger said in a statement: "China is one of the most populous countries in the world, and this agreement represents a significant opportunity to provide Chinese audiences increased access to our films."
Under the agreement, the US will be allowed to import an increased number of 3D and IMAX movies to China, where box office revenue was up to $2.1 billion last year. The measure also ensures fairer compensation levels for U.S. blockbuster films distributed by Chinese state-owned enterprises.
The Independent Film & Television Alliance said the pact would offer "unprecedented opportunities" for the U.S. independent film industry in China.
”For Independents, this agreement is momentous,” said IFTA President-CEO Jean Prewitt. “Our sector has been unable to benefit fully from the existing revenue-sharing importation quotas and has had limited avenues through which to distribute. For the first time, through this Agreement, there is a promise of creating a commercial foundation that will allow independent producers to participate more fully in the Chinese marketplace.”
The agreement -- which resolves a long-simmering dispute between the US and China -- will be reviewed in five years to make sure it's working. If necessary, the United States can return to the World Trade Organization to seek relief.
Last year, the WTO instructed China -- to no avail -- to loosen state controls on foreign media. The Obama Administration went to work behind the scenes to encourage the Chinese government to comply.
“U.S. studios and independent filmmakers cite China as one of their most important world markets, but barriers imposed by China and challenged by the United States in the WTO have artificially reduced the revenue U.S. film producers received from their movies in the Chinese market,” said United States Trade Representative Ron Kirk. “This agreement will help to change that, boosting one of America’s strongest export sectors in one of our largest export markets.”