In China Inc.’s biggest move yet into the U.S., Dalian Wanda, the largest entertainment group in China, yesterday announced a $2.6 billion purchase of AMC Entertainment Holdings, the second-largest operator of American movie theaters. The deal is much larger than the previous record for a U.S. purchase by a Chinese company, the $1.8 billion acquisition of IBM’s PC business by Lenovo (992:HK) in 2005.
The purchase might invigorate a campaign by the Chinese government to boost the country’s “soft power,” or cultural influence, in the U.S. and other countries. Communist Party leaders have expressed worry about what they consider to be the outsized influence of foreign culture inside China. Why, they ask, should filmmakers, musicians, and other artists from the world’s second-largest economy attract so little attention around the world? Last October, party leaders vowed to build up China’s soft power and maintain what the official Xinhua news agency called “cultural security.” According to Xinhua, the party’s Central Committee said “China is facing a difficult task in protecting ‘cultural security’ and feeling the urgency of enhancing its soft power and the international influence of its own culture.”