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Chinese filmmakers are walking a tightrope between localization and globalization. Finding a happy medium is surprisingly like cooking fish, Raymond Zhou learns.

As China's film industry rockets into the stratosphere of amazing box-office returns, the international market becomes increasingly enticing. Yet, only a fraction of its revenues come from outside China, and even that is often the result of counting in the foreign receipts of co-productions, which technically do not go to the Chinese pocket. Chinese film companies, however, are moving up the learning curve. At a Beijing International Film Festival forum, CEO of Bona Film Group Ltd Yu Dong maps out three stages that Chinese films have to take to launch a global entry.

"None of the steps can be skipped," he emphasizes.

The first stage, according to Yu, is what he jokingly calls "dumping". Movies are bundled together and sold to foreign television stations, video websites and, in the old days, video distributors. The Chinese companies receive a pittance, e.g. $20,000 for 10 movies, or a mere $100,000 for the whole year's inventory. "There is little room for price negotiation. If you don't use the low-price strategy, they'll go buy Korean or Japanese movies instead," he says. "You have to remember there are some 5,000 movies produced annually throughout the world. China accounts for roughly 10 percent, the US 10 percent, India more than 20 percent. And I'm not counting the 100-some pornography films from Japan."

Whoever buys the Chinese stock will have to find ways to make money out of it. So, whatever platforms they can find they will use to release some of these movies, which means exposure for Chinese stories and Chinese actors, says Yu. "This will help cover 80 to 150 markets across the world."

For phase two, Chinese companies will participate in the investment of some projects with global reach and, in return, will place Chinese situations and Chinese actors inside the stories. The cameo appearances of several A-list Chinese stars in these big Hollywood franchises have caused controversy in China, with some members of the Chinese public complaining about the short shrift given to these big names, but Yu holds a different view. "No matter how small the role, it is worth it," he says, citing the example of Wang Xueqi in Iron Man 3. "This is 2013's biggest movie in the whole world, and the global audience got to know this Chinese actor," Yu says.

The third stage will involve Chinese productions with international participation. Yu says Wolf Totem, which has just wrapped production, is a perfect example. It is based on a Chinese best-seller, but is directed by Jean-Jacques Annaud, a French director with a track record for incorporating wild animals in his stories. It has reportedly pre-sold $8 million in the European market.

This project is spearheaded by Zhang Qiang, an executive of China Film Group. "It tells a Chinese story with Chinese characters and Chinese emotions, backed up by Chinese investment, but it has potential global appeal," says Yu. Yu's Bona is mulling similar projects, to be co-produced with Fox Film Corporation, which has a financial stake in his company. "We may even produce movies with dual language soundtracks, a Chinese one for the domestic market and English for the international market," Yu says.

Yu is aware he can do only one or two such co-productions each year. For regular movies, those in the mid-budget or small budget with no possibility of hiring international talent, he wants to have his teams engage in international cooperation and use that experience to serve the domestic market. "By 2020, China will surpass North America and become the world's largest film exhibition market, and our output will reach 1,000 feature films a year. Only then will we be prepared to set Stage Three as our target," says Yu. "Only then will we be able to make international films with Chinese emotions and become part of world cinema."

Zhou Tiedong, until recently president of China Film Promotion International, a company that is heavily involved in what Yu Dong calls "phase one" of Chinese films' global ambition, offers a different take: "If you do not have a good story, international buyers would not touch it even if it is free. The film industry is built on collecting pocket money from each individual moviegoer. In the US, the average price for a ticket is still around $8 apiece. That means selling your story to millions of such individuals."

According to Zhou, Wolf Totem is no longer a narrowly defined Chinese story. It is about wolves and man's relations with wild animals and nature. So, it is global in its core. "The crux is in the positioning of your story. You can position it for the domestic market or beyond it. Of all the movies made in the US, most are for domestic consumption. There are only 50-some global movies that reach the international market and they represent Hollywood as we know it."

Zhou insists that, to reach a global audience, we should not only tell stories about China, but more about Chinese people. "We have not learned how to penetrate the cultural surface into the depth of humanity. Our products are often made with what I call 'strong cultural discount', and that will hamper the acceptance of foreign audiences. Stories about human nature but with Chinese cultural characteristics, such as Wolf Totem, have the potential to succeed on the wider market."

Zhou uses the analogy of fish to explain his point. If a fish has too many bones, only people who are ardent lovers of fish as food will eat it. But if you remove the bones and make it into fish balls or fish fillets, even those mildly interested may choose it. A Chinese film has to go through a similar process to find a wider audience. "When we make a global film, we must preserve the flavor of fish, so to speak, i.e. the Chinese elements that culturally identify us. But if you examine any film that sells across the world, you'll find it does not contain things that will be stuck in your throat. It can always go down smoothly. Any race, culture, age, language group will be able to relate to it. In that sense, you have to tell a global story or even a story of the whole cosmos."

However, there can be endless gradations between total localization and total globalization in terms of a film's positioning. When it comes to the treatment of a film story and its details, there are thousands of decisions and each one will require a careful balance. Very often there is no right or wrong, but collectively a film may come across as heavy on one end or the other. Occasionally, a film may capture both the domestic and the outside market, but it may also be caught in the middle, failing to appeal to either side.

Debates like the one described in this story, which I moderated, happen every year as we move along - and up - the learning curve.