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While Japanese film was slowly sinking into quicksand, the rest of the world did not stand still. The contrast with the popular success of Chinese filmmaking in recent years could not be more striking (although when we speak here of China, we are combining three very different societies: mainland China, Taiwan, and Hong Kong). Chinese films not only won awards from international juries but packed audiences into theaters worldwide. Ang Lee's 1993 The Wedding Banquet received an Oscar nomination and racked up global profits. Chen Kaige's Farewell, My Concubine took top prize at Cannes in 1994 and was named best foreign film in polls of Los Angeles and New York film critics.

In contrast to Japan's focus on the under-sixteen market, Chinese films appeal to adult audiences at three levels: high, middle, and low. There are the grand historical dramas by Chen Kaige; the domestic comedies of Ang Lee; and action thrillers by Jackie Chan and John Woo. Chinese society, with all its injustices, offers rich ground for the cinematic imagination. Japan's controlled modern life seems to offer little room for either grand drama or action thrills. If there is any hope for Japanese film, it lies in comedy, as is evidenced by the fact that the two most internationally successful Japanese films of the past fifteen years, Tampopo and Shall We Dance?, were both comedies. When a director like Suo takes Japan's bland society for his springboard, as he did in Shall We Dance?, there are rich comic possibilities. Unfortunately, very few directors are able to make Suo's leap. As Nagasaka has written, «The same narrow, insular, and complacent attitude that explains Japan's response – or better, the absence of a response – to the gulf war can be seen in the repetitive and unadventurous products of this country's motion picture industry.»

Finally, there is the problem of insularity. While Japanese directors went on making movies in the vein of self-pity and fear of foreign monsters, the Chinese walked right into the lair of the Hollywood beast and won him over. Ang Lee and Emma Thompson worked together on 1995's award-winning Sense and Sensibility. John Woo's Broken Arrow, starring John Travolta, and Jackie Chan's Rumble in the Bronx fought for the lead spot in U.S. box offices in March 1996, and since then Lee, Woo, and Chan have continued to produce hits. In 2000, John Woo swept America once more with M:I-2, the Mission: Impossible sequel. So many ambitious Chinese directors and actors have followed them that Hollywood now sports a mini-Hong Kong in its midst.

Chinese contemporary film is notable because it sought a new market abroad. Hong Kong directors moved to Hollywood because their own film industry declined. As for the mainland, most of the films by internationally renowned Chinese directors have not been popular at home, and the ones that had the potential to be were held back or repressed by government censors. Chinese directors began, as Japanese independents did, with niche marketing, aiming their products at foreign festivals. In the next stage, however, Chinese films parted ways with Japanese. They moved out of the art houses and became international hits.

By 2000, U.S. studios were producing movies by Tsui Hark and Ang Lee in Hong Kong. «What makes Hong Kong cinema successful is its energy and spirit, and I was mindful to harness that,» said Barbara Robinson, the manager of Columbia Pictures Film Production Asia. Meanwhile, Peter Chan, freshly returned to Hong Kong from directing The Love Letter for Dreamworks SKG, announced in May 2000 that he was founding a company to produce Asian films for Asians-and that he would begin by linking up with Thai and Korean directors.

As for Japan, there has never been a successful joint Western-Japanese or Asian-Japanese film, or any highly regarded Japanese film set in another country. There are no crossover directors or producers; and since Toshiro Mifune in the 1960s and 1970s, there has never been a major crossover actor from Japan, as there have been from Hong Kong and China. In recent years, Taiwan-born Kaneshiro Takeshi has made a name for himself in the avant-garde films of Wong Kar-Wai, but he is no match for the big international stars such as Chow Yun-Fat, Michelle Yeoh, Jet Li, and Vivian Wu. Thomas McLain, a film-industry lawyer in Los Angeles, sums it up: «The Japanese entertainment industry is in the dark ages.»

Education is a subject fraught with emotion, given that it is one of the chief means whereby a nation maintains its cultural identity. Conservative politicians and the Ministry of Education vigorously defend Japan's educational system for doing just that, but the problem is: Which cultural identity is being preserved? As we have seen in the case of ikebana and the tea ceremony, much that masquerades as hallowed tradition today is in fact brand-new.

The uptight manual-bound tea masters of today bear very little resemblance to their playful forebears. Now a tea master has to consult a reference book to tell him which flower to place in the tokonoma alcove during the rainy season. But in early Edo, Kobori Enshu, when his guests entered the tearoom after an afternoon shower, simply took a bucket of water and splashed it in the tokonoma. Students of ikebana diligently calculating the exact angle of each flowering branch may think they are studying «tradition,» but the angles and triangles come from another planet from the mystical world of Ikenobo Senno.

When Nakano Kiyotsugu confessed himself baffled at the new rules that seem to have sprung up in daily life, he was telling us that the rigidly conventional lifestyle of today is in fact something new Nothing like the strict adherence to rules we see today ever existed in Japan before. For all the shoguns' attempts at control, the Edo period was a riot of variety and eccentricity. Saikaku and his freewheeling townsmen friends would find today's incessant announcement of aisatsu greetings, the rules telling everyone what to do at every moment, very much at odds with their experience.

Even at the height of mid-twentieth-century militaristic fanaticism, there was more room in Japan for characterful individuality than there is today, as one discovers when one meets older Japanese. People who were educated before the war (now in their seventies and eighties) seem to have kept more of their humanity than students of recent years. Among this older generation, one constantly meets cultured, questioning people, often with a sly sparkle in the eye and a wicked tongue. And, of course, in the confused years immediately after World War II, education was especially relaxed. This relative openness in education bore fruit in the 1960s and 1970s in a cultural rebirth similar to theTaisho Renaissance of the 1920s. In business, this was the era when upstart entrepreneurs at Honda and Sony created giant international corporations not linked to the large keiretsu groupings. In the cultural sphere, the cinema directors Kurosawa and Ozu, the fashion designer Miyake Issey, the writer MishimaYukio, the architect Ando Tadao, the Kabuki actor Bando Tamasaburo – names that symbolize Japan's modern cultural achievement – all of whom were educated before the war or in the two decades after it, did their finest work.

The window of opportunity stayed open only for one generation, about twenty years. Behind the scenes, opposing forces were at work as the bureaucrats solidified their grip on power and the cement began to set on the teaching system. While artists flourished in the 1960s and 1970s, schools were training the next generation according to a detailed regimen more far-reaching than anything Japan, or the world, had ever seen. By 1980, these students had matured and the story of the Taisho Renaissance repeated itself. A gray curtain-or, rather, a colorful banner decorated with big-eyed baby faces – descended over Japan. Among the artists who dazzled the world so briefly, few have any successors who can hope to duplicate or transcend their achievements. From here on in, it's Hello Kitty, and ikebana flowers glued to tubes of pink jelly.

In the 1930s, the secret police stifled Japan's intellectual and artistic freedom with the help of truncheons and handcuffs. In the 1980s and 1990s, kindergarten teachers, armed only with loudspeaker systems, do the same work much more effectively.