With Hollywood, America has found a great way of selling the American Dream, and that’s basically what China wants.

Americans today spend their lives surrounded by Chinese-made products, from clothes to toys to technology. But when it comes to the film industry, viewers are much more likely to catch a Hollywood film playing in Chongqing than to see a Chinese production at the multiplex in Milwaukee.

But in the past year, the relationship between Hollywood and China has become much more complex. Chinese investment is pouring into American productions, and US studios are creating crowd-pleasing films that work on both sides of the Pacific. We spoke with Anousha Sakoui, the Los Angeles-based film and entertainment industries reporter for Bloomberg News, to understand the new era of “Chimerican” entertainment.

What’s behind this recent wave of investment in Hollywood by Chinese companies?

We’ve seen a growing relationship between Hollywood and China for a few years now, and this has really intensified in 2015. The drivers have been the exponential growth of the Chinese box office, fueled by the rapid development of the country’s middle class, and also a will among the political class in China to push the Chinese story overseas, and to develop the country’s soft power.

Academics that I’ve spoken to have said that in China, Hollywood is seen as a very successful model for a country seeking to project its image. With Hollywood, America has found a great way of selling the American Dream, and that’s basically what China wants to learn how to do.

When we say “China,” are we talking about the Chinese government, or more the private sector?

It’s a mixture of both. We’ve seen big private enterprises like Alibaba and Dalian Wanda Group taking a big role. Wanda is probably the biggest, because it acquired the second biggest US theater chain, AMC Entertainment, in 2012 for $2.6 billion. Wanda also bought about $1.2 billion worth of land in Beverly Hills for a complex there. And finally, it’s invested $20 million in a new project by the Academy of Motion Picture Arts and Sciences to build a movie museum in Los Angeles, so the museum is going to have a film history gallery named after Wanda.

Alibaba is active, too. They did their first investment in a big blockbuster this summer with Mission: Impossible – Rogue Nation. People had been wondering about a deal ever since Alibaba CEO Jack Ma visited Hollywood last fall and was pictured courtside at a Lakers game with power agents like Ari Emanuel, and visited some of the studios. This summer, Alibaba announced that they were going to make their first direct investment in a US blockbuster.

State-owned enterprises are involved, as well. China Film Group, the state distributor of foreign films, took a 10% stake in Furious 7, the Universal Pictures car heist thriller, which came out this year and became the biggest film ever there.

Are US film studios investing more in the Chinese film industry, too?

So there’s a kind of partnership that’s going on between these companies and the Hollywood film studios. The US filmmakers want a portion of that growing Chinese box office for their English-language films, and now Warner Brothers has done a deal with Chinese Media Capital to produce Chinese-language films in China. So you’re seeing a progression of the relationship.

It all comes down to the fact that China is set to overtake the US as the biggest film market in the world. There are some in the industry that believe this will happen by 2017, but you see estimates up to 2020. In any case, we know it’s coming in the next five years, and that’s going to be a really important delineator. China accounts for pretty much all the growth in the global box office.
How if at all can we expect this to affect the content of films?

It’s hard to put your finger on anything definite. For Southpaw, The Weinstein Group’s film, the production budget was paid for entirely by Wanda. It stars Jake Gyllenhaal and is quite a gritty story of the downfall of a boxer and his comeback. There’s no obvious way that you can say that it’s necessarily been changed for a Chinese audience just because it had a Chinese backer, although we understand Wanda was involved in the production process.

But if you take something like Transformers: Age of Extinction, there was a huge amount of Chinese product placement in the film. They’ll also use Chinese actors, and some people now say that you’ll probably never see a Chinese villain again in a big US movie, because you don’t want to offend or stereotype that market.

Do you think consumers in Western markets will notice this or will it fly under the radar?

Something I thought was really interesting this summer was a change in the screen credits. When you go to a movie or watch one at home, you’re kind of used to seeing these opening screen credits—20th Century Fox with the big band theme, or Paramount with the swirling stars, or MGM’s roaring lion. When you went to see Mission Impossible or Southpaw, it was really interesting to see that the opening credits were for Alibaba and China Movie Channel, as well as Wanda in the case of Southpaw.

For Wanda, it’s a traditional ink wash painting with water drops falling off of green leaves, which they say represents the essence of nature and is a lucky symbol in Chinese culture. It’s a branding exercise—it’s showing that they’re strengthening their brand overseas.
How do you see the relationship between China and Hollywood evolving over the next five to ten years?

People are wondering at the moment how much the Chinese market will open up—will it let in more films, will there be more freedom for US studios to market their films within China? A lot of theaters are currently being built in China, and it will be interesting to see how that evolves, or if that slows down at all.

We’ve seen a lot of Chinese money coming to Hollywood, and Hollywood sharing its filmmaking prowess with China. Now, I’m starting to hear about Chinese filmmakers internationalizing their stories, so making films that take stories about China and make them more open to an international audience. Next year, The Great Wall is coming out—it’s a thriller starring Matt Damon, which takes place around the Great Wall of China. Wanda is also building a huge complex in Qingdao, the Qingdao Oriental Movie Metropolis, which will be a place to film movies as well as a theme park.

The next phase of this is more of a melding, or a kind of two-way street. Hollywood studios want access to China’s box office and they often are seeking funding for their films. China wants to grow the market for Chinese films outside China, and also to import Hollywood’s filmmaking prowess.

We explore Chimerican entertainment in greater detail in our forthcoming Future 100 report. Click here for a video preview.