A report emerged this week that China, in retaliation to President Trump’s international tariff hikes, is considering “reducing or banning” U.S. movies as part of its response. This is not a move that Hollywood will take lightly, considering that China is the second-biggest film market in the world after the United States. (Indeed, the nation overtook the U.S./Canada as the biggest market in 2020 and 2021 due to Covid.)
And yet, the country has been leaning on Hollywood movies less and less these days. Most notably, the recent Chinese-made animated film Ne Zha 2 has proven to be a huge hit, grossing $2.11 billion to date. For perspective, that number puts Ne Zha 2 above Avengers: Infinity War and Star Wars: The Force Awakens on the All Time Worldwide Box Office Grossers list. Right now it sits just under the number four film on that list, Titanic, which grossed $2.26 billion. Avatar tops that chart at $2.92 billion. The Chinese film is also now the highest-grossing animated film of all time, beating out Inside Out 2’s $1.69 billion. (Grosses via Box Office Mojo.)
Hollywood has found increased competition in the Chinese market as locally made films have become more prevalent – and popular. As The LA Times puts it, “China’s film industry has become adept at churning out movies with high production values and support from the Chinese Communist Party.” This means there are less screens in the country for Hollywood’s movies. There's also less interest from China to allow American movies into the country.
Still, it’s an important market for the Hollywood studios, particularly as theaters continue to struggle in the post-Covid/post-Hollywood strikes/post-“we’ll wait till it comes to streaming” world. The 2010s were a good time for U.S. movies in China but things peaked around 2019, which happens to be the year Avengers: Endgame was released. Around $632 million of that Marvel epic’s $2.79 billion came from China, so about 22.65% of its total gross. Compare that to last summer’s Deadpool & Wolverine, which made $59 million in China and $1.33 billion worldwide. That’s just 4.43% of the pie.
And yet, 4.43% is better than nothing. A Minecraft Movie had a huge opening last weekend, having grossed $323 million worldwide (to date). Of that, $14 million came from China, which is about 10% of its total international earnings for the period. So again, nothing to sniff at. (It also beat out Ne Zha 2 at the Chinese box office, although that film was in its tenth week of release at that point.)
Let’s look at the films which topped the Chinese box office over the past several years. Note that these are "calendar grosses," which is to say box office receipts earned within a given year regardless of release date. This view provides us with a good cross-section of American and Chinese hit films:
It’s clear that while the halcyon days of making $600 million in Avengers money in China alone may be a thing of the past, there’s still an appetite and a market for American films in the country. And while the topic of censorship is an entirely different facet of Hollywood’s dealings with China, not to mention the studios' willingness to bend over backwards to get their films released in the country (see The Franchise's Chinese tractors being forced into an outer space superhero epic for product placement - a "multiverse of farming equipment!"), the studios also need every cent they can get in the current filmgoing environment.
Whether or not China really does decide to “reduce or ban” American movies in the near future, it’s clearly going to hurt the U.S. more than it’s going to hurt China.
