How Will Fresh U.K.-China Political Tensions Impact Entertainment?

Access for U.K. producers and distributors to the lucrative Chinese TV and film market could be under further threat amid worsening political relations between China and the U.K.

Tensions between the two countries have centred on their media brands in recent weeks. The relationship, which has been fraught for some time, reached a breaking point when China’s international English-language news channel CGTN was stripped of its U.K. broadcast licence after media regulator Ofcom concluded it was ultimately controlled by the Chinese Communist Party. Days later, in a tit for tat move, China’s State Film, TV and Radio Administration retaliated by banning BBC World News from the country.

In recent years, TV trade between the two countries has become more complex and challenging against a backdrop of Anglo-Chinese tensions over pro-democracy protests in Hong Kong, former President Trump’s trade wars, and the banning of Huawei from U.K. 5G networks. The Chinese government has also sought to prioritize homegrown content in a bid to bolster its local creative industries, restricting the licensing of foreign formats.

U.K. producers and distributors have reported a narrowing of opportunity in the Chinese market, with many TV and film deals floating in mid-air. Now, there are fears that Chinese broadcasters could further ease off from acquiring U.K. content amid government pressure. Numerous TV distributors contacted by Variety are anxious about how to navigate relationships with China. The BBC’s commercial arm, BBC Studios, for example, has considerable skin in the game with China. Nonetheless, it’s likely that the distributor will stand with BBC World News.

In the past, China has restricted access to its lucrative media market in order to score political points in disputes with other countries.

Although it was never announced formally, China banned Korean dramas, films, packaged tours and K-pop starting in 2016 in protest against the deployment of an advanced U.S. missile defence system in South Korea.

Dawn McCarthy-Simpson, managing director of business development and global strategy for British producers’ trade org Pact, has led many producer delegations to China, but pulled all of its programs in late 2019. “I think we are going to see more of a backlash by the Chinese government against the U.K. creative industries,” she tells Variety. “The creative industries are fairly easy for the Chinese to target, and it’s easier to do than targeting big manufacturing industries.”

The Chinese media market has grown hugely in recent years. For example, China is now the second-largest OTT video market after the U.S., worth $7.7 billion in 2019, according to PWC.

The value of U.K. television exports to China is currently relatively low at £40 million ($55 million), according to Pact’s 2019-2020 U.K. TV Exports Report. But TV exports are growing quickly, and were up by 25% year on year.

Amanda Groom, founder of The Bridge, which specializes in connecting English-speaking producers and broadcasters with their Asian counterparts, said relations between China and the U.K. have become more tense, but that she hoped this was short-lived rather than a long-term situation. “Long term, we are going to need the Chinese audiences. Long term, the direction of travel is very much towards co-production and cooperation. Short term, we are in a really uncomfortable political situation.”

Groom says she always advises smaller independent production companies to avoid tackling the Chinese market. “It’s too big a challenge. But for the bigger players, China will always be a much sought-after market just because of its size,” she notes.

Danny Fenton, CEO of U.K. indie Zig Zag Productions, is one of the few unscripted British production companies to have gained some traction in China in recent years. The outfit previously struck a co-development deal with Chinese TV production and distribution business 3C for Zig Zag’s physical game show format “Ancient Games.”

“There are still opportunities in China, and China is a very appealing market,” says Fenton. “But at the same time, China has taken an increased focus on creating its own IP, and that has limited the opportunities for foreign producers, particularly on traditional broadcast platforms. There’s a bit more flexibility on some of the new players.”

Elsewhere, some in the U.K. are calling for cultural and educational organizations to reappraise their relationship with some Chinese firms.

The BBC came under fire this month for deals it has struck with leading Chinese tech firm Tencent, owner of communications app WeChat, which was cited in the U.S. by former President Donald Trump as a security threat. The BBC has co-produced natural history documentaries such as “Dynasties” (pictured) and “Seven Worlds, One Planet” with Tencent.

Oxford University was also criticized by British legislators this month for renaming its Wykeham chair of physics as the Tencent-Wykeham chair in honor of the Chinese conglomerate, which donated £700,000 ($969,000) to the university.

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