Adding his voice to the chorus of Beltway insiders concerned by China’s ambitions in the United States — and Hollywood in particular — incoming Senate Minority Leader Chuck Schumer has penned a letter suggesting further scrutiny of recent moves by Dalian Wanda Group and others to acquire U.S. companies. The Wall Street Journal, which saw a copy of the letter, reports that Democrat Schumer wrote to Treasury Secretary Jack Lew and U.S. Trade Representative Michael Froman, “I am concerned that these acquisitions reflect the strategic goals of China’s government.” Setting himself up as a potential ally on some of Donald Trump’s Middle Kingdom musings, Schumer reportedly copied the President-elect on the letter.
Schumer’s stance follows similar DC handwringing that emerged in October. At the time, the Government Accountability Office agreed to a request by 16 bipartisan members of Congress to review the Committee on Foreign Investment in the United States (CFIUS), which is supervised by the Treasury Department and reviews national security implications from foreign investments.
A few days later, John Culberson (R-TX) wrote to Assistant Attorney General John Carlin and specifically asked him to take seriously Wanda’s moves in the industry.
Chinese companies are increasingly active in Hollywood as money flows east-to-west. Wanda has been particularly aggressive, acquiring a 75% stake in AMC Theaters which yesterday closed a $1.2B deal for UK-based Odeon & UCI Cinemas making AMC the world’s largest exhibition company. Wanda also owns Legendary Entertainment and is buying dick clark productions. It is further involved in a deal to make minority investments in some Sony tentpoles.
But Wanda’s not alone, other Chinese groups like Tencent, Alibaba, Huayi and Hony are invested in American entertainment companies right now.
The worry in Washington is that such involvement is being driven by Chinese government interests which could leave U.S. companies on an uneven playing field. There is also concern about China’s soft-power influence in terms of content.
In Schumer’s letter, he notes that the fact that Chinese companies can take a majority stake in U.S. assets — often backed by state officials and China’s sovereign-wealth funds — is unfair given American firms are handicapped from similar deals in China. “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, per the WSJ. In China, Hollywood companies like Warner Bros and DreamWorks Animation have formed joint ventures to gain footing on the ground.
Trump’s position on China has included vocalizing his interest in levying a 45% tariff on Chinese imports; and pointing the finger at the PROC for taking away America’s power and jobs with a vow to change things. A few days after he won the election in November, Trump spoke with President Xi Jinping during a call in which Xi told his future U.S. counterpart that “cooperation is the only correct choice for China-U.S. relations.”
Wanda, whose Chairman, Wang Jianlin, is, like Trump, a major real estate developer, has previously said it “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.”