‘Star Wars’ Awakens to the Force of China’s Entertainment Empire
Country set to overtake U.S. as world No.1 in entertainment
The Walt Disney Co. film, directed by J.J. Abrams, is projected to bring in a total of 1.5 billion yuan ($229 million) in China, according to David Hao, a research analyst at Credit Suisse Group AG in Hong Kong. China’s movie market will become even more vital to Hollywood as the government tilts the economy toward consumers and services, adding fuel to a ballooning industry of studios, cinemas and distribution.
The 40 percent annual growth of China’s entertainment market is reshaping the business worldwide, according to Jeffrey Towson, professor of investment at Guanghua School of Management at Peking University and co-author of “The One Hour China Consumer Book: Five Short Stories That Explain the Brutal Fight for One Billion Consumers.” He projects China’s market will be the world’s largest in a year or so, surpassing the U.S.
“Could George Lucas have imagined in 1977 that Chinese consumers were one day going to be his biggest audience?” Towson said. “The explosion of Chinese entertainment, driven by the arrival of middle class Chinese consumers, is going to be one of the biggest stories of 2016.”
The crowds of smartphone-tapping customers flocking to China’s cinemas this weekend are a far cry from the almost non-existent consumer culture in the country back in 1977, when the original film in the franchise opened in the U.S.
As young Luke Skywalker first jumped into his landspeeder a long time ago, in a country far away Deng Xiaoping was still consolidating his power base, prior to launching the biggest market opening in history.China’s gross domestic product per capita then was less than $200, below that of Afghanistan. Mao Zedong, the founder of the People’s Republic, had died just eight months earlier and cinemas ran such Cultural Revolution-themed classics as “Thank You, Comrades.”Over the next decade and a half, while moviegoers outside the country watched the Empire strike back and the Jedi return, Deng built free-trade zones, stock markets and infrastructure that unleashed a flood of investment. His proving ground was Shenzhen, a former fishing village across the border from Hong Kong, where consumers queued up in 1990 for their first taste of a Big Mac at the opening of the mainland’s first McDonald’s Corp. restaurant.
When Deng walked into Shanghai’s state-owned No. 1 Department Store to go shopping in 1992, the shelves were full of consumer goods, instead of the bare-bones offerings available when his reforms began, according to Ezra Vogel’s biography, “Deng Xiaoping and the Transformation of China.” The paramount leader bought some pens for his grandchildren before hopping on a train back to Beijing.