With 1.3 billion people and the world’s second-largest economy, the People’s Republic of China (PRC) stands an insecure colossus: hyper-sensitive, moody, and quick to deploy diplomatic, economic or military muscle to silence critics of all stripes.

Of all the forms of influence, the one the Chinese Communist Party wields most effectively is, ironically, money. Money’s impact can be most clearly seen from Hong Kong to Hollywood and, surprisingly of late, Sacramento.

The transfer of Hong Kong to mainland Chinese control in 1997 offers a clear case study. Prior to 1997 and a few years afterward, reporters in Hong Kong would often break stories about official corruption in China, poor living conditions for average Chinese, riots and workers’ protests. In 2002, Reporters Without Borders started ranking press freedoms worldwide. Hong Kong rated 18th – the highest level of press freedom in Asia. Then Chinese conglomerates closely connected with the Chinese Communist Party began buying media outlets in Hong Kong. Reporters knew that, if they wanted to remain employed, they had to behave themselves by not writing stories critical of the Chinese government. Press freedoms quickly plunged in Hong Kong, with its free press ranking slipping to 39th in 2005, then 58th in 2006.

Hollywood’s kowtowing to China is most easily understood in light of the Chinese Communist Party’s angry reaction to 1997’s trio of films critical of the Chinese government and Hollywood’s hunger for profits and intellectual property protection.

Hollywood, a town that prides itself on being provocative and independent, has been anything but on the issue of China. Hollywood’s one year of misbehaving in the eyes of Beijing, 1997, brought the world “Kundun,” “Seven Years in Tibet,” and “Red Corner,” and promptly earned lifetime bans from China for Brad Pitt, Richard Gere, Martin Scorsese, and David Thewlis. Since 1997, Hollywood has been, for all intents, silent about China. Not that there isn’t plenty of interesting material, from the sorry state of human rights in China, to China’s brutal crackdown on Tibet, its intimidation of the democratic government on Taiwan, the terrible toll of Chinese pollution (not only local air and water pollution, but China is now the world’s greatest emitter of greenhouse gases while one-quarter of particulate pollution in the L.A. basin emanates from China), and, most ominously, China’s rapidly growing military power and the apparent will to use it.

After the release of “Kundun,” “Seven Years in Tibet,” and “Red Corner,” the late Jack Valenti, the 38-year president of the Motion Picture Association of America, went on a full-court press to restore Hollywood’s access to China. In 1997, he assured Chinese authorities that mere films cannot “disrupt or collapse a culture richly fertilized by several thousand years of historical glory,” and should not “interrupt the long range beneficial interests” between America and China. Late that same year, Valenti told the Chinese Minister of Radio, Film and Television that individual films only exert a very brief though loud repercussion on America’s collective imagination. Chinese Communist Party concerns were that these brief repercussions would have a longer impact appear to be borne out by the fact that the Dalai Lama’s stature was enhanced by “Kundun” and “Seven Years in Tibet,” making him a more effective spokesman for the cause of human rights in Tibet.

Since film in the People’s Republic of China is tightly-controlled by Communist Party authorities, they indulge in the error of mirror-imaging, seeing Hollywood as an agent of the U.S. government. Chinese officials said 1997’s films were made to demonize China and that the negative images about China were in line with America’s ideological agenda, conforming “entirely to the national interests and overall strategy of the U.S.” Brad Pitt, Martin Scorsese, and Richard Gere would certainly be surprised to hear that they were, or ever have been, agents of the U.S. government.

As the Clinton Administration labored hard to normalize trading relations with the PRC, Hollywood labored along with the White House. An unprecedented lobbying effort by Hollywood and big business resulted in the granting of Permanent Normal Trading Relations (PNTR) with the PRC on October 10, 2000. The following year, China achieved World Trade Organization (WTO) accession. These actions significantly opened the Chinese market for Hollywood’s product while strengthening intellectual property protections against the notoriously high levels of Chinese pirating.

The result: record profits in China for Hollywood and not one serious film critical of the PRC in a dozen years. As with Hong Kong’s journalists, Hollywood is performing self-censorship, ever mindful of offending the Chinese Communist Party and risking a cut-off of a growing goldmine.

Americans might have the right to be upset with Hollywood’s self-censorship regarding China if other American institutions were brave enough to stand up for the truth in the PRC. Unfortunately, even political institutions, such as the California legislature, are increasingly influenced by a pervasive, consistent, and heavy-handed pressure from China’s diplomatic corps, many of who have been seen prowling the halls of the Capitol in Sacramento in recent weeks. Why are representatives of the unelected national socialist government in Beijing spending time in Sacramento? They are trying to stop Assembly Concurrent Resolution 6 (ACR 6), Dalai Lama and Tibet Awareness Day, by Assemblyman Sam Blakeslee (R-San Luis Obispo). ACR 6 is almost a word-for-word, repeat of last year’s resolution on the same topic, itself, significantly toned-down from Mr. Blakeslee’s original draft, ACR 119. ACR 6 is supposed to come up for a vote on Monday, March 16 even as the diplomatic representatives of the undemocratic Chinese Communist Party are trying to prevent a vote in an elected American body.

On March 11, I received a faxed letter from the PRC’s Consul General in San Francisco. The letter urges me to not support ACR 6. Other members of the Assembly received similar letters. Support of ACR 6 would hurt “the Chinese people’s feelings” while “sending a wrong signal to the separatist forces” according to the communist diplomat. The letter also cites the huge amount of trade and investment between California and China, as if to imply that this could be at risk.

If the letter represents a stick, then many California lawmakers have been enjoying Chinese carrots. A number of the Democrat lawmakers trying to block ACR 6 have recently enjoyed junkets to China and have dined at the home of the PRC’s Consul General in San Francisco.

Judge William P. Clark, former Chief of Staff to Governor Ronald Reagan as well as Reagan’s Deputy Secretary of State and National Security Advisor commented on the PRC’s unusual diplomatic effort in a letter to Mr. Blakeslee on March 12. Judge Clark wrote, “I do not recall any case of foreign consular officials lobbying at our state level in such a blatant and aggressive way… Notwithstanding matters of propriety, the fact that such actions occur in relation to a resolution recognizing the 50th anniversary of the flight of the Tibetan religious leader in the aftermath of an unprovoked invasion by the armed forces of Communist China is not merely ironic, but indeed tragic.”

Judge Clark’s letter highlights a growing trend by the PRC to influence U.S. politics directly and through proxies, such as American business. David Szady, recently retired as the FBI’s chief of counterintelligence operations said, “The Chinese, like every other intelligence agency or any other government, are very much engaged in trying to influence, both covertly and overtly.” In 2005, Rudy Guerin, another FBI counterintelligence official, warned that the PRC was enlisting U.S. corporations to do their bidding, even augmenting their diplomatic efforts with corporate lobbyists.

That China’s diplomats are sparing no effort to influence a vote in Sacramento should come as no surprise to anyone who has more than a passing interest in the emerging Asian superpower. I attended a rally in support of human rights in China and Tibet last year in Santa Monica. The PRC’s consulate in Los Angeles sent me a letter, dated May 1, telling me to cease being concerned about basic human rights in the world’s most populous nation. It closed with a warning that my actions might hurt the feelings of the Chinese people. I responded with a letter of my own, stating, “…your government has consistently shown itself to be unworthy of the longsuffering and noble people of China.” Further, that, “I innately understand, as an American, that liberty is our strongest ally and that any great people, when truly free, are our natural friends.”

The PRC’s envoys did not respond.

As Ling Bai’s character, PRC defense attorney Shen Yuelin said in “Red Corner,” “In China, we hold the welfare of the state above that of the individual.” The statement takes its full meaning when one realizes that the “state” is synonymous with “Chinese Communist Party.” And therein lay the challenge to Hollywood filmmakers and Sacramento lawmakers: why kowtow to a one-party, fascist and revanchist regime, a regime unworthy of its people and a threat to its neighbors?