Xinhua Film Company - Business History

Business History

Xinhua was founded and controlled by Zhang Shankun, who had previously worked in the Peking opera scene. By 1934, Zhang had made enough money to create his own movie studio named "Xinhua" or "New China." Zhang proved to be an excellent promoter, and within three years, Xinhua had transformed from a minor newcomer to a major industry player. After the fall of Shanghai in 1937, Xinhua remained the only major production company still active in what became known as the "Solitary Island" Period of Chines film (in that Shanghai was an "island" of production within the "sea" of Japanese occupation). It was eventually joined by two major competitors, Guohua Film Company (derived from the ashes of the now defunct Mingxing Film Company) and Yan Chuntang's Yihua Film Company, which had closed after the occupation but reopened in May 1938.

In 1938, the film company was split into two subsidiaries, Huacheng and Huaxin in order to a franchise agreement with distributors. In 1939, Zhang incorporated Xinhua into an American owned company named Zhongguo lianhe or "China United Pictures" (not to be confused with "United China", a common translation of the unrelated Lianhua Film Company or "China United Productions, Ltd., Xinhua's eventual successor). This was done mainly to escape from Japanese meddling of Xinhua business. As a result of Zhang's business dealings, Xinhua managed to produce twenty-four films in 1939 alone, making it the largest production company in Shanghai. By 1942, however, Xinhua was folded into the Japanese-controlled Zhongguo lianhe zhipian gufen gongsi (China United Productions Ltd. or Zhonglian for short); the result of a Japanese orchestrated merger between Xinhua and eleven other Shanghai studios under Japanese film producer Kawakita Nagasama. Zhang Shankun's cooperation in this venture would eventually lead to his arrest by Chinese nationalist forces near the end of the war, ironically occurring shortly after he was arrested by the Japanese for suspicion of divided loyalty. Zhang would eventually move to Hong Kong after being freed by the Nationalists after the war.