A sweet-and-sour transformation

It's high season for Hollywood at the moment. The major movie studios traditionally yield half their annual revenues between the months of May and August. But this year managers are under pressure. The box office takings this season are much lower than expected - at least in the US and Europe. But It's an entirely different picture in China, where the cinema experience has only just started to catch on.

Booming China is no longer just the mecca for the global car industry. It's also becoming the holy land for Hollywood bosses. Thanks to audiences in China, the fourth part of giant robot saga "Transformers," which hit the big screens two weeks ago, is already Hollywood's most successful film of all time. It generated more than $300 million (223 million euros) in China in one month - nearly a third of that in the first weekend alone.

Twice as many screens

Over the first half of 2014, the Chinese film industry has generated $2.2 billion - 22 percent more than in the same period last year. Long gone are the times when box offices in the West reported similar figures. And that's just the beginning: while cinemas are closing in western countries, new cinemas are springing up all over China. There are currently some 20,000 screens in the hinterland - and that number is set to double over the next few years.

But Hollywood is not receiving a warm welcome in China. The state-run film authority has imposed a limit on the number of foreign films allowed to hit the screens. No more than 34 foreign productions are allowed per year. In addition, foreign producers are allowed to keep only a quarter of ticket sales. That's half of what foreign producers are allowed to keep in other countries.

It's a sign of Beijing's self-confidence. Beijing knows how important China is for Hollywood and it can afford to make high demands. Western producers are still lining up to get access to the Chinese market. In addition to mercantile barriers, China has also set up cultural barriers to Hollywood. The goal is to make sure the local film industry isn't suffocated by Hollywood. And, fascinated by Hollywood's soft power, the leadership in Beijing is dreaming of setting up their own big industry in the medium term. Hollywood, India's Bollywood, now soon "Chinawood"? In the coastal town Qingdao in eastern China, building work has started for the world's largest film studios.

China has become such an important market for Hollywood that the studios have simply resigned themselves to the strictest censorship rules.

When "Cloud Atlas" was launched last year, China's censors had reduced it to 130 minutes, from an original 170, which didn't necessarily make it easier to follow the highly complex plot.

In order to avoid the barriers of quotas and censorship, an increasing number of foreign producers cooperate directly with Chinese film companies. Transformers 4, but also Iron Man 3, were filmed together with Chinese partners.

Those coproductions are not affected by quotas, censorship boards are more lenient, and a larger share of proceeds can flow abroad.

Access to market with strings attached

But the Chinese co-producers naturally have a bigger say, too. That includes surreptitious advertisement for Chinese products and Chinese film locations; and the cast has to include at least one Chinese star in a main role. US film director Michael Bay had to accept all of those demands for the fourth Transformers film. Half the film is set in China; an internationally well-known Chinese actress got a role; and there's product placement for Chinese "Cest Bon" drinking water as well as Shuhua milk. The SUV GS5 by Southern Chinese car manufacturer Guangzhou Automobile Group, which features in the film, will soon even be exported to the US.

The audience don't seem to care too much. They laugh when a policeman in Hong Kong suddenly says "We have to call the central government," because of the debate about how dependent Hong Kong is on Beijing. US actor Stanley Tucci, an Emmy winner, gets the same reaction when he is shown sucking on a sweet Chinese soy milk drink.

It seems like a win-win situation for now. But Chongqing Wulong Karst Tourism Group Co., whose park a part of the film was shot in, has just pressed charges against US producer Paramount. The Chinese company is demanding almost $3 million in compensation, claiming they were not mentioned sufficiently. It remains to be seen who will take home the victory.

DW's columnist Frank Sieren has lived in Beijing for 20 years.