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BEIJING - With stars, speeches and statuettes, the Beijing International Film Festival wrapped up its celebration this week of China's booming film market.

But unlike Hollywood award ceremonies, organizers of the Chinese extravaganza were relieved that the director of the "best picture" failed to show.

In his acceptance speech at another award ceremony this month, director Feng Xiaogang voiced what everybody knows about China's cultural environment: It is heavily censored and artists are chafing under the restraints.

"In the past 20 years, every China director faced a great torment, and that torment is (censored)," Feng said, according to an Internet broadcast in which his use of the word "censorship" was bleeped out.

Many times, when the censors' orders arrive, "you feel they are ridiculous, and don't know whether to laugh or cry," continued Feng, whose film about a famine in Henan called Back to 1942, won Tuesday.

China's film industry is one of its greatest growth areas. The stats are spectacular: 10 new screens are built every day and box office leapt 30% to $2.74 billion in 2012 to become the second-highest in the world after the USA, according to the Motion Picture Association of America.

But cinema in a totalitarian state is a tricky thing for both the government and artist, who seeks to inform, challenge and entertain. The nation's ruling Communist Party has spurred rapid economic growth through market capitalism, but unlike free market democracies it blocks images or ideas that threaten to disrupt "social order" and the party's grip on power.

The results can prove almost comical. Django Unchained, Quentin Tarantino's first picture to get a cinematic release here, was pulled just minutes into its screening across China on April 11 without official explanation.

And an independent documentary film festival in southwestern China was canceled at the eleventh hour this month, like several others in recent years, forcing participants to gather in each other's hotel rooms for private screenings instead.

Hollywood appears undeterred. With flat U.S. box office receipts, the lure of China's swelling middle class sends U.S. studios hustling to grab more of the yuan-denominated action. The makers of Iron Man 3, which launches soon, added new scenes, featuring Chinese actors and locations, just for the Chinese audience.

Paramount will cast four actors for Transformers 4 through a Chinese TV reality show. DreamWorks Animation CEO Jeffrey Katzenberg plans to make an Indiana Jones-style cartoon set in Tibet.

China is the "hottest place to be in entertainment," said Peter Shiao, founder of the Los Angeles and Beijing-based entertainment company Orb Media Group.

Despite ongoing difficulties - such as China's annual cap of 34 foreign releases on revenue-sharing deals, and the many challenges of co-producing movies, partly to get around that limit - Shiao insists that opportunities abound for people with original, China-focused ideas.

Within five years, he predicts, Chinese movies and actors will enjoy a "global face-lift," as Western audiences increasingly accept Asian faces on-screen.

Just don't expect significant change to China's censorship system within those five years, warned Shan Dongbing, vice president of Le Vision Pictures, a Chinese production-distribution company that last week announced a $40 million fantasy-action co-production with Shiao's Orb Media.

"It takes time for Chinese people to get used to shots" such as nudity and strong violence in movies, said Shan, just as nude paintings were once frowned upon in China but now widely shown.

"China's policies towards film are not bad, and in some aspects quite open, but their implementation is still lacking, as some officials fear the public's reaction to any 'sensitive' matter, and may be more conservative than the people," said Shan, who formerly worked as a censor at key state enterprise China Film.

But plenty of critics don't hold back their scorn for China's movie controllers.

Again this month, the 10th "Yunfest" of independent films in the southwestern Dali city was canceled.

"On the surface, strangling an independent film festival doesn't appear to mean much, but put all of these situations together and it equals the suppression of all space for spiritual growth and the strangling of this nation's soft power," said attendee Cui Weiping, a cultural commentator and professor at the Beijing Film Academy.

Critics also gripe about the quality of Chinese films. But this year, several have out-performed Hollywood's offerings at the Chinese box office, though the local films are helped by official manipulation of screening schedules to favor domestic titles. A big test will come when Iron Man 3 takes on the Chinese romance movie So Young.

"My friends always preferred Hollywood movies, but that's starting to change as Chinese movies have become more competitive," said Wei Manyi, 30, a publicist for Versatile Media in eastern China's Hangzhou city.

"Censorship is a big obstacle for all filmmakers, but there's been some relaxation in recent years," he said. "As the film environment grows more market-focused, censorship will be less strict than before."

Contributing: Stephanie Zhou

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