FOURTEEN years ago James Cameron's film “Titanic” shattered box-office records in China, as it did nearly everywhere else in the world. Its impact was especially shocking in a market that was captive to a conservative, state-dominated film industry, with no ability to produce a blockbuster of its own. Mr Cameron's ballyhooed “Avatar” broke China's records again in 2009 and 2010, despite more than a decade of development. Now the film bureaucrats in Beijing have a chance to accomplish something that would have been unthinkable until very recently: co-producing Mr Cameron's “Avatar” sequels. Mr Cameron arrived in Beijing on Saturday and will soon be attending a screening of “Titanic 3D” at the Beijing International Film Festival (the re-release opened earlier this month to staggering sales in China). But his most important business will be conducted in private meetings, including with state-owned China Film Group. Speaking in an interview on Sunday, he said a priority of this trip was to explore a co-production deal with the Chinese firm on “Avatar 2” and “Avatar 3”. Mr Cameron says he would need to be satisfied in advance that his planned films would meet the approval of censors. If that key condition can be met, he is keen on the potential payoff. “There are economic advantages,” as he puts it. The economic advantage he has in mind would be on the tail end, when the box office takings are divvied up. Mr Cameron does not need funding assistance for his films (a common reason for other foreigners in search of Chinese partners), but he would like China to share more of its blockbuster revenues with him. When “Avatar” made $200m in Chinese ticket sales, China was returning to Hollywood only 13% to 17% of the receipts on imported films, a far lower share than the American studios receive from other foreign markets. Going forward China will share up to 25% of the takings from imports, per an agreement announced during Xi Jinping's visit to Los Angeles in February. That remains lower than Mr Cameron might be able to negotiate in a co-production deal. Chinese producers, after all, can collect up to 45% of the box office for domestic films, the 55% remainder going to satisfy the cinemas and distributors. Mr Cameron's meetings this week come shortly after the news that “Iron Man 3”, starring Robert Downey junior, will be a Chinese co-production. The gravitational pull of the Chinese movie market, nonexistent less than a generation ago, is now an undeniable force, sucking in all Hollywood blockbusters (and lesser projects) that venture within its event horizon. Hollywood studios, independent producers and directors regularly cycle through Beijing in search of partnerships with Chinese production houses—often seeking money to finance their movies, as well as access to a suddenly lucrative market.

This year China will surpass Japan as the world's second-largest movie market, after America. Chinese box-office takings totalled 13 billion yuan ($2.06 billion) in 2011, an increase of 30% from 2010, which in turn had been more than 60% higher than in 2009. The number of movie screens has doubled in five years to more than 10,000 (and is projected to reach 15,000 in speedy fashion), and the new screens are mostly digital and 3D-capable. Meanwhile America's market is stagnating. Takings in North America (America and Canada combined) declined by 4% in 2011, to $10.2 billion. Mr Cameron suggests that by the time “Avatar 3” is released later this decade, China may well rival America as the top movie market. That may be a stretch, but then just wait till “Avatar 4”; Mr Cameron calls it a possibility. He says he has stopped producing non-Avatar films or even considering non-Avatar scripts. “I'm in the Avatar business. Period, that's it. I'm making ‘Avatar 2', ‘Avatar 3', maybe ‘Avatar 4',” he says. “I think that within the Avatar landscape, I can say everything I need to say that I think needs to be said, in terms of the state of the world and what we should be doing about it.”

What Mr Cameron had to say in “Avatar”—about environmental exploitation, about the rights of people to their land—was rather political (Mr Cameron proudly declares it “not a subtle film”). The film resonated with some viewers in China as mildly subversive, and it did not receive quite the same blessing from Beijing as did “Titanic” (Jiang Zemin, then China's top leader, was a fan). But it did not run afoul of censors. A famous scene in “Titanic”, in which Kate Winslet's character poses nude for a drawing, was censored for the 3D re-release in China. Mr Cameron counts that as progress; he says that “somewhat” more was censored the first time the film was released in China. He surely has the leverage, with the value of “Avatar” as a franchise, to get the script assurances he would need to make a co-production work. He also says that he will not let any political concerns about China or its human-rights record interfere with his doing business here. “I'm going to do what's necessary to continue having this be an important market for my films,” he says. “I'm going to play by the rules that are internal to this market. Because you have to.”

Indeed, as in many other industries, China has the market leverage to get what it wants from the foreign potentates who once dominated the film business. But what would China get in exchange for giving up some of its take at the box office to Mr Cameron? For one, Han Sanping, the powerful chairman of China Film Group, would affix his name to what could be one of the biggest blockbusters of all time, “Avatar 2” (and “3”, etc). Co-producing a James Cameron film would mark quite a symbolic turnaround for China, from the days of “Titanic”. Mr Han is often referred to in film circles as the godfather of Chinese film. If Mr Han wants a producer credit, Mr Cameron may find himself not terribly inclined to refuse.

(Picture credit: Jonah M. Kessel)