What a foreigner saw in Wen's report

Most foreign analysts reviewing Premier Wen Jiabao's Government Work Report at the National People's Congress have fixated on either the slower annual economic growth target of 7.5%, or the year-on-year reduction in military spending. In doing so, they have done a disservice by ignoring many other important aspects of his report.

One aspect is culture, a powerful, but as-yet poorly deployed tool in the exercise of China's soft power and public diplomacy. Premier Wen's report clearly indicates that China will continue growth in this area at home and abroad. This is important because as the Chinese learn how to use these tools better, they will more effectively compete in the contest for hearts and minds. It's also critical if this country is ever to move from merely "Made in China" to its long elusive goal of "Created in China."

What resonated for me was the Premier's comment that "culture gives human beings a sense of belonging, and passing on fine culture is essential in maintaining the everlasting vitality of a nation." I believe that is true not only internally, but in some ways even more important externally. If China and its people are to be understood and appreciated around the world, more has to be done to burnish China's often misunderstood and still under-appreciated culture and history. China's few global successes, such as the growing network of Confucius Institutes, are a mere beginning.

In this vein, the Premier also pledged that China would turn its cultural sector into a pillar of the economy by making the cultural industry "larger, more intensive, and more specialized." He promised that China will "intensify cultural and people-to-people exchanges with other countries so that we learn from each other's strengths." It appears to me that such nascent efforts are already bearing fruit.

I thought that the most significant recent concrete achievement in this area was announced last month during Vice-President Xi Jinping's American visit. DreamWorks Animation, the studio that produced Kung Fu Panda will undertake a joint venture with several Chinese companies to create Oriental DreamWorks with studios in Shanghai. My hope is that this template will provide the model for many such joint ventures in the future in which the Chinese side can learn from others, such as Hollywood studios, which have been so successful in the creation, marketing and sales of cultural products.

This announcement should significantly accelerate and build on already promising projects. These include the 2010 remake of Karate Kid, a joint venture between Columbia TriStar and China Film Group, and the upcoming Bruce Willis' futuristic thriller Looper, made with financial backing of Beijing-based DMG Entertainment.

In light of Premier Wen's remarks, it should come as no surprise that last month brought the announcement of the first Chinese-state financed film fund to facilitate co-productions between Hollywood and China with offices in Beverly Hills and Beijing. The fund will be headed up by the former President of China Film Group and joins the Shanghai-based group that is funding the Oriental DreamWorks deal. It should be no surprise that the same week that Premier Wen delivered his Government Work Report the "stars" of a three day Hollywood conference focusing on film financing and co-productions were these and other Chinese film financiers.

All these developments, consistent with Premier Wen's remarks, bode well. America has been the master of soft power and cultural diplomacy for over a century. China is still trying to find its stride.

The agreement announced during Vice-President Xi's American visit will give American and other foreign films greater access to Chinese audiences but at the same time, will give each side a better understanding of the other's markets and creative skills. For the Chinese side, it will provide further, much needed insights into the how's and why's of Hollywood's recipe for success.

At its best, this agreement has the potential to stimulate a heavily travelled two-way super highway for successful films and other cultural products. Today, this is little more than a simple dirt road.

Other benefits abound. Hollywood loves one thing even more than success: "OPM," Other People's Money. With money comes access and influence. Money talks. In the case of China-financed Looper, not only was the original role moved here from France, but a role was specially written for actress Xu Qing.

Another benefit will be enhanced IP protection. As China's stake in the worldwide film market increases, so does its self-interest in protecting its intellectual property, as well as that of its partners.

I am surprised that the international media did not pick up on these points. Growth in Chinese cultural industries can help boost China's economy. At the same time, soft power and cultural diplomacy are important allies of their more conventional cousins, military spending and foreign policy.

The author is a senior advisor to Tsinghua University and former director and vice-president of ABC Television in New York.