Hong Kong CNN Business  — 

A top Disney executive has acknowledged that the uproar over its movie “Mulan” has caused “issues” for the company.

The remarks — given by Chief Financial Officer Christine McCarthy at a Bank of America conference on Thursday — come after days of online criticism directed toward Disney (DIS) and just before the film’s theater premiere in China on Friday. In the credits of the movie, the company thanked a Chinese government agency accused of human rights abuses in Xinjiang for its help in making the film. Disney (DIS) had not previously spoken publicly about the issue.

“Mulan was primarily shot in, almost the entirety, in New Zealand. And in an effort to accurately depict some of the unique landscape and geography of the country of China for this historically period piece drama, we filmed scenery in 20 different locations in China,” McCarthy told analysts at the conference, which was held virtually.

McCarthy said it was “common knowledge” that filming in China requires the permission of government publicity departments, and noted that it is standard practice to “acknowledge in the film’s credits, the national and local governments that allowed you to film there.”

“So in our credits, that was recognized, both China as well as locations in New Zealand. And I would just leave it at that,” she said. “But that’s generated a lot of issues for us.”

McCarthy did not elaborate on what those “issues” were, and Disney did not immediately respond to a request for further comment outside of US business hours.

People walk past a poster for "Mulan" outside a cinema in Beijing on Thursday.

Disney began releasing its live-action remake of “Mulan,” the iconic 1998 animated picture, in some international theaters and as a $30 video-on-demand on its streaming service, Disney+, last weekend.

In the credits, the company acknowledged several Chinese government bodies. A few in particular raised red flags: The Xinjiang government’s publicity department and the Public Security and Tourism bureaus for Turpan, a city of about 633,400 people just outside Xinjiang’s capital Urumqi.

The Turpan Public Security Bureau has been listed by the US government as an organization involved in “human rights violations and abuses” in the region.

Beijing has long defended the crackdown in Xinjiang as necessary to tackle extremism and terrorism, and said it is in line with Chinese law and international practice, calling accusations of mass detentions a “groundless lie” and “sensational rumor.”

On Friday, China’s Ministry of Foreign Affairs said that the film’s note of thanks to the Xinjiang government for “providing convenience” was “normal practice.”

“Xinjiang affairs and Hong Kong affairs are purely China’s internal affairs,” spokesperson Zhao Lijian told reporters at a regular press briefing. “No foreign government, organization or individual has the right to interfere.”

The move by Disney to credit Chinese agencies was immediately met with a fierce backlash. Critics demanded that Disney clarify its dealings with authorities in Xinjiang, while some social media users called for people to boycott the movie.

Asked by an analyst on Thursday whether she thought the controversy would affect the film’s performance, McCarthy demurred.

“I’m not a box office predictor [or] prognosticator,” she said. “But I will say that it has generated a lot of publicity.”

Earlier this week, McCarthy told investors at a separate conference that the studio was “very pleased” with the initial response to the film’s release over the Labor Day holiday weekend.

Opening in China

The movie was mired in controversy even before its release.

Last year, Liu Yifei, a Chinese-born US citizen who stars as the movie’s titular character, expressed her support for Hong Kong police as they faced allegations of excessive violence against protesters. That led pro-democracy activists in Hong Kong to call on people to boycott the film. The movie is expected to debut in Hong Kong next week.

Zhao, China’s foreign ministry spokesperson, on Friday praised Liu and called her “the modern-day Mulan.”

“I want to give her a thumbs-up. She did a good job,” Zhao said.

But arguably the most important test for “Mulan” is its theatrical debut in mainland China this weekend.

China is home to the world’s second biggest box office and is a critical market for Disney. Analysts have said that “Mulan” appears to be tailor-made for audiences there, given that the film’s storyline is set in the country and that the new remake boasts an international cast, with an ethnic Chinese star.

But it’s not even clear that Mulan will succeed in mainland China, where many people grow up learning about the traditional legend of Hua Mulan, a female warrior who disguised herself as a man and took her father’s place in the army.

On Douban, China’s most popular film rating website, “Mulan” is only rated 4.7 out of 10 — lower than other Disney live-action titles such as “Cinderella” and “Maleficent.”

Harold Li, a 29-year-old software engineer in Shanghai, said he watched the film on Friday and came away feeling disappointed.

“The Disney interpretation is filled with stereotypical tropes,” he told CNN Business. “I don’t think the Chinese audience will buy [it].”

That sentiment was echoed by many users on Douban, who took issue with the accuracy of the plot.

However, some Chinese viewers expressed their approval on social media, saying that the movie was “not as bad as some critics say.”

The debate isn’t deterring some people from checking out the movie. By 5 p.m. on Friday, ticket sales for the title had reached about 36.8 million yuan ($5.4 million), according to Maoyan, China’s biggest online movie ticketing platform. “Tenet,” a Hollywood spy thriller, raked in about 51.4 million yuan ($7.5 million) on its opening day last week in China. (“Tenet” is produced by Warner Bros, which, like CNN, is owned by WarnerMedia.)

From the beginning, this was going to be tough to pull off, according to Chris Fenton, former president of DMG Entertainment, a Beijing-based global media company.

“It’s adopting a mythology near and dear to China, and then taking an iconic American company like Disney to try and Hollywood-ize it,” he said.

“In the most likely scenario, you create a feathered fish where it doesn’t succeed in either market. It’s ‘too Chinese’ for Americans or ‘too American’ for Chinese. It’s very tough to make it work in both countries.”

— Selina Wang, Ben Westcott, Serenitie Wang and Laura He contributed to this report.