The issue of granting China PNTR (Permanent Normal Trade Relations) status was closely intertwined with the above-mentioned trade agreement and China’s accession to WTO. U.S. law required China’s normal trade relations (NTR) status (also known as most-favored-nation, or MFN, status) to be reviewed and renewed on an annual basis. From 1980, when NTR status was restored to China after being suspended in 1951, to 1989, the renewal of China’s NTR status was largely non-controversial and relatively unopposed by Congress. Following the Tiananmen Square incident in 1989, however, many members of Congress sought to use the annual renewal as a focal point to pressure the executive branch over a wide range of Chinese trade issues (e.g. trade barriers, IPR enforcement), and non-trade matters (e.g. Taiwan security, weapons proliferation). They wanted to condition that status on meeting additional requirements, primarily regarding China’s human rights record. In May 1994, the Clinton Administration decided to de-link human rights from trade concerns, separating human rights considerations from the annual review of China’s NTR status.

China's gaining the status of PNTR would end the annual Congressional review of China’s trade status, and it also would greatly benefit multinational corporations, including Hollywood media giants, which have increasing business interests and stakes in China. Besides, during the bilateral negotiation over China’s WTO accession, the Clinton Administration pledged that it would press Congress to enact PNTR legislation in return for significant market-opening commitments on the part of China (Morrison 2002). Hence, once the agreement was reached in November 1999, the Clinton Administration and its business supporters began to push for Congress to grant PNTR to China. They argued that China would accede to the WTO with or without Congressional approval of PNTR status, but the failure to pass such legislation would seriously damage Sino-U.S. commercial relations. It would also prevent the U.S. from enjoying the full benefits of the WTO agreement that the Administration negotiated, including broad market access, special import protections, and rights to enforce China’s commitments through the WTO dispute resolution procedure. U.S. competitors within the WTO, on the other hand, could benefit fully from the new business opportunities in China (“Testimony of Ambassador”). Hence, the Administration contended that the legislative grant of PNTR to China would be critical to China’s WTO membership in terms of its promotion of the U.S. economic interest.

As expected, the MPAA did not spare any efforts in lobbying the Congress to grant China PNTR status (Valenti quickly made his good-will endeavors in this regard well known to senior Chinese government officials). In February 2000, the MPAA organized a high-profile China Trade Relations Committee, to lobby the Congress to approve PNTR with China amid strong opposition from organized labor and human rights groups. The Committee was composed of its member companies’ most influential media tycoons — including Michael Eisner of Walt Disney, Rupert Murdoch of News Corp, Sumner Redstone of Viacom Inc., and Gerald Levin of Time Warner. Heading the newly formed alliance, Valenti pronounced that he and other committee members believed it in the long-term interests of the U.S. “that a sensible, enduring relationship with the largest nation on earth” be put in place (“Valenti Announces”). He admitted Hollywood’s increasing dependence on foreign markets, necessitated by its “skyrocketing budgets, low profit margins and star salary system," to be one of the major causes for him to form a “very, very high-level committee” committed to lobbying Congressmen to approve PNTR with China (Bromley 39).

In 1996 Valenti had publicized his international agenda during his first public outing as head of the MPAA, when China began to be shaken by Mao’s Cultural Revolution, with his premise of

“enlarging the foreign market, by bringing US pix to emerging nations which will in time come to enjoy more leisure time, after the present ‘ferment’ in the new nation leads to a ‘more decent’ standard of living (Quoted in Bromley 39)."

In fact, as early as in 1952, Eric Johnston, Valenti’s predecessor and President of the MPAA from 1945 to 1963, noted that Hollywood should start to consider exploiting new markets rather than rely on existing ones, for, though the Europe market was still a major revenue source, it was becoming increasingly static. In particular, he recommended that the major studios look to such markets as Africa and the Far East, where the movie-going habit was still in its infancy. He emphasized that, though they may initially be low-income areas, they would offer potentially wealthy markets in the long run (Guback 1969, 98). Hence, in the case of China, the agenda of the MPAA had to come a long way before it could be gradually materialized.

Thanks to the rigorous support of the Clinton Administration and the lobbying of major U.S. business interests, including those from Hollywood mobilized by Valenti, following weeks of intense debate, the trade bill that authorized the extension of PNTR status by the United States to China was passed in both the House of Representatives and the Senate in May and September 2000 respectively. It was signed into law on October 10, 2000, ending 20 years of annual reviews of China’s trade status, and clearing the way for Hollywood’s expanded crusade into the Chinese market. The Senate passage of the bill by a vote of 83-15 seemed to signal a noticeable change in the attitude on Capitol Hill compared with that in the immediate aftermath of Tiananmen, largely endorsing the Clinton Administration’s engagement policy towards China. Democratic Senator Daniel Moynihan of New York called it one of the most important votes since WWII (Entous, 2000). On December 27, 2001, President Bush issued a proclamation extending PNTR status to China, effective January 1, 2002 (Morrison 2002).

If long-term commercial profits are the paramount incentive for the Hollywood majors’ struggle to enter China, then to the U.S. government, the significance of the WTO trade pact with China and the ensuing PNTR bill went far beyond immediate trade and economic benefits. The Clinton Administration believed that bringing a rising power like China into the international system not only would serve the U.S. national security interest, but it also would exert a profound ideological and cultural impact on the country. As Clinton made clear when he hailed a House vote on extending NTR to China for another year in 1999,

“Expanding trade can help bring greater social change to China by spreading the tools, contacts and ideas that promote freedom” (“U.S. House Supports”).

That notion was perfectly echoed by a similar remark by Valenti in 2000,

“Trade is much more than goods and services. It’s an exchange of ideas. Ideas go where armies cannot venture. The result of idea exchange as well as trade is always the collapse of barriers between nations…” (“Valenti Announces”).

Hence, at the turn of the new millennium, China’s filmed entertainment industry and the nation’s cinematic culture as well as its overall cultural identity awaited a new round of challenges on a much expanded scale from Hollywood.

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