Casually today an italian online paper published this article on chinese cinema. I translated it for you in english
Chinese Cinema Won’t Become the New Hollywood
It seemed plausible just a few years ago, but even though it produced the highest-grossing film of 2025, things are not going at all as expected.
2025 has been the year in which Chinese cinema achieved its greatest and most important box office success ever: the animated film Ne Zha 2, which surpassed two billion dollars worldwide. But it is also the year in which Chinese box office revenues, overall, have entered into a crisis. The huge success of
Ne Zha 2 and the way it was achieved masked the fact that Chinese cinemas are making 12 percent less revenue than the average in the years prior to the pandemic, and that over the last four months they have consistently earned less than during the same period the previous year.
For just over a decade, China’s film industry grew at an impressive rate, aided by state funding and government planning. Until four years ago, many believed that China would soon become the world's leading film industry, surpassing Hollywood. That no longer seems likely.
For the Chinese regime, subsidizing cinema is useful for conveying its narrative regarding foreign and domestic policy decisions, but above all, for strengthening a sense of national pride. Even the release of
Ne Zha 2 in February was a government-driven operation, supported by the state propaganda apparatus. Scheduled for the Chinese New Year—the time when cinema attendance is highest—it was ensured that the film would face no competition, becoming the only major production released at that time (unlike the crowded release schedules seen during Christmas in countries like Italy). The film, a sequel to 2019’s
Ne Zha, reimagines a traditional story in a modern way and was promoted as a matter of national pride, with watching it being framed as the act of a good citizen. The state broadcaster CCTV ran a real-time box office counter during the film’s first 24 hours in theaters to encourage people to contribute to this Chinese success story.
The result was that not only did it become the highest-grossing film of 2025 so far worldwide, but also the highest-grossing animated film of all time (second place goes to
Inside Out 2, with $1.6 billion). Compared to foreign films,
Ne Zha 2 ranks fifth among the highest-grossing films of all time, but it holds the record for the highest-grossing film ever in a single territory. The second is
Star Wars: The Force Awakens, which earned over $900 million in the United States alone. Notably,
Star Wars took 165 days to reach that figure, while
Ne Zha 2 surpassed it in just 11 days, thanks in part to the staggering number of theaters in which it was released.
However, the gap between
Ne Zha 2’s box office performance and that of all other films is enormous. Currently, half of the entire Chinese film season’s box office revenue comes from that one film. For comparison, the top American box office hit of the year,
Minecraft: The Movie, accounts for 10 percent of the year’s revenue. Even Wang Changtian, the producer and distributor of
Ne Zha 2, spoke at the Shanghai Film Festival in early June about the very real risk of a permanent decline in box office revenue in China. The first solution producers are considering to avoid losses on these big films is to reduce budgets, which are currently very high due to the desire to outdo American productions in spectacle and appeal.
China’s film industry growth was the result of a strategy developed over decades. Historically, very few foreign films were distributed in China, as most did not pass censorship. Starting in the 2000s, however, the government decided to allow more—primarily major blockbusters—with the goal of stimulating the expansion of movie theaters across the country. American films had the effect of creating a larger and larger cinema-going public, encouraging and justifying the construction of many new theaters throughout the country. In the last ten years alone, the number of cinemas in China has doubled, reaching 80,000—more than in any other country in the world.
This gradually led to increasingly significant Chinese box office revenues. Moreover, starting in the mid-2010s, partly thanks to some American filmmakers, China began learning how to create its own blockbusters, adopting Hollywood’s production techniques and narrative strategies. Once they had learned how to promote and bring audiences into theaters, and then how to produce highly commercial films, the Chinese government once again began limiting the domestic distribution of foreign films. This caused major problems for Hollywood, which had started relying on Chinese box office revenue and tailoring films for that market. It also left Chinese blockbusters without competition.
That period saw many major successes and the creation of a series of well-crafted propaganda films, such as
Wolf Warrior 2 (similar to
Rambo in structure, but set in Africa, where China has many interests), or others depicting major historical events, such as
The Battle at Lake Changjin or
The Eight Hundred (the latter also distributed in Italy). But now things have changed significantly. Many theaters that, before the pandemic, operated with a seat occupancy rate of 20 percent are now down to 5 or 10 percent, when 15 percent is the threshold needed to break even.
The issue is widely recognized and debated across the industry, and the prevailing impression is that short-form content and other types of entertainment—such as video games and TV series—are drawing audiences away from theaters. This isn’t just happening in China, but also in Western countries. To remedy the situation, the Chinese government has launched a cinema promotion campaign, with $140 million invested in ticket subsidies—money that theaters can claim when they want to offer steep ticket discounts. This is a policy that, for instance, the Italian film industry has also adopted in recent years, though with smaller investments. It’s called
Cinema in festa, a limited-time initiative where movie tickets are significantly cheaper, but theaters still earn the same amount because the state covers the difference in ticket prices.
There’s also a plan to renovate movie theaters, upgrading projection technologies and furnishings to support the idea that the cinema experience cannot be replicated at home or on other devices. This is a strategy being adopted by many countries. However, the most likely solution will be to start allowing more foreign films again—particularly American ones (which never stopped being distributed in China but were released in smaller numbers and with less promotional investment) and South Korean films, which used to be highly appreciated mid-range content, but were unofficially banned for political reasons.
Adding to the revenue challenges for Chinese productions is the fact that they have never managed to become successful exports. The second-highest box office market for
Ne Zha 2 was the United States, where it earned $20 million—contributing almost nothing to its more than $2 billion total. Chinese cinema has essentially remained a domestic product, and producers cannot rely on other commercial avenues for their films, such as merchandise, home video, or TV licensing, which in China are not significant revenue sources.
