As the United States and China are locked in trade war escalation Provoked by President Trump's tariffs, America's biggest economic competitor is not limiting its response to material goods.
China said on Thursday that it was also targeted the US film industrywhich limits its access to the world's second-largest film market.
“We will follow market rules, respect audience choice and moderately reduce the number of imported American films,” China's National Film Administration wrote on its website on Thursday, Reuters reported.
Earlier this week, two highly influential Chinese bloggers with ties to the Communist government's official news agency wrote that local leaders were considering the possibility of American film ban fully. The NFA's decision to take a less aggressive approach likely means the impact on Hollywood's bottom line will be limited, experts told Reuters.
However, the move is a signal that China is ready to attack America's cultural capital to hit back at Trump. As both sides continue to escalate their economic attacks every day, this could very well be the harbinger of a complete ban on American films in China.
Box office boom in China
When it comes to the movie business, there's the US, there's China, and there's everyone else. American moviegoers spent $9.1 billion in theaters in 2023, which film industry tracker Gower Street Analytics estimates accounted for 27% of total global box office receipts that year. China collected $7.7 billion, representing 23% of the global market and more than $6 billion ahead of Japan in third place.
For much of the 20th century, China's box office remained virtually dormant. But it then exploded during the 2010s, rising from less than $1 billion in 2011 to more than $9 billion in 2019. Hollywood films played a big role in this, as American studios exploited the interest of China's huge population to reap huge profits from their big blockbusters. Avengers: Endgame, released in 2019, collected $632 million in China one on track to become the second biggest film of all time.
American studios typically only get about 25% of the money their films make in Chinese theaters, but it's still quite a coup for Hollywood when revenue can reach such high levels.
Hollywood is losing control
American films don't earn as much as they did just a few years ago for two reasons: China's overall film market has shrunk significantly, and local audiences now increasingly prefer watching home movies to Hollywood imports.
Chinese domestic films are reported to now account for about 80% of its annual box office receipts, up from about 60% before 2020. The extraordinary profitability of China's domestic film industry was dramatically demonstrated earlier this year with the release of the film Ne Zha 2, animated film that has earned nearly $1.9 billion since its release in late January. It is already the highest-grossing animated film ever made in any country and is currently ranked 8th. Ultimate list of all-time box office receipts.
However, despite these changes, China remains an important market for Hollywood. Last year there were five American films that earned at least $50 million. Godzilla x Kong: New Empire, what did $132 million. Chinese viewers also spent $14.5 million to see Minecraft movie during the opening weekend last week.
Having their films banned in China likely wouldn't be an extinction-level event for U.S. studios, but it would be a blow to an industry that still brings in billions of dollars less per year than before COVID sent its revenues plummeting.
“Such a high-profile punishment of Hollywood is a win-win gesture on the part of Beijing, which will certainly be noticed by Washington,” Chris Fenton, wrote a book Reuters reported on Hollywood's relations with China.
Whatever benefit China might gain from even a modest rebuke of Hollywood, the United States simply cannot reciprocate. That's because Chinese films make next to nothing in American theaters anymore.
