The eighth annual TheGrill kicked off with a look at China’s tenuous relationship with Hollywood and its increasing emphasis on domestic blockbusters.

Stanley Rosen, Professor of Political Science at the University of Southern California, has spent years studying China’s film industry. In conversation with TheWrap’s editor-in-chief Sharon Waxman, Rosen pointed to two factors that have made Chinese filmmakers focus on its domestic movie slate: politics and box office success.

“Couple changes recently, one being the restriction on money going out of China, which has compelled some investors like Wang Jianlin of Wanda to sell off assets and concentrate on [their] domestic portfolio,” said Rosen.

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Waxman noted Wanda Group’s genesis as a real estate heavyweight before setting its sights on Hollywood dominance — including a major partnership with Sony Pictures and its failed acquisition of Dick Clark Productions last year. Rosen said Wanda has shifted its attention back to China in large part due to Jianlin’s run-ins with the Chinese government.

“His problems are more political than economic, because he was trying to make Chinese policy for the Chinese government and creating a zero sum gain in his attacks on Disney,” said Rosen. He added the Chinese government is interested in a “win-win proposition” when it comes to its relationship with Hollywood.

The second factor, according to Rosen, was this summer’s hit “Wolf Warriors 2,” which “changed the game” for domestic offerings. The Chinese blockbuster made more than $900 million this summer, capitalizing on the country’s demand for action with a storyline built on a special ops soldier attempting to save trapped Chinese civilians in the midst of an African civil war. (Polling of Chinese filmgoers shows action movies only trail comedies in popularity — two genres owned by American filmmakers.)

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Rosen said this movie tapped into the spirit of Hollywood films like Mel Gibson’s “The Patriot,” which are “very successful commercial blockbusters” because of their “strong patriotic content.”

China’s ability to make these films doesn’t completely severe its ties with Hollywood, however. Anthony and Joe Russo — the brothers behind the “Captain America” film series — joining forces with Chinese studio Huayi Brothers last year was one example of the country aiming to beef up its domestic offerings by tapping into top Hollywood talent.

Moving forward, Rosen said Wanda Group’s uneasy relationship with the American government could curtail Chinese investment in the American film industry.

Jianlin has become the “poster boy for everything that is dangerous” about investing in Western movies, according to Rosen, because of his hostile remarks to Chairman Chris Dodd of the Motion Picture Association of America. This has made Jianlin “anathema” to Chinese bureaucrats overseeing the film industry.

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Now, if its films don’t promote “Chinese soft power,” the government doesn’t “see any benefit to it.” These movies will are popular in China, where patriotic themes play well, but will limit their appeal in the U.S. Still, Rosen told the audience the Chinese market is too big, and its film industry too closely linked to Hollywood, for there to be a severing of the connection.

“Things are always changing in China,” said Rosen. “China is always going to be important because of the market and the money that’s there.”