Lead: China’s moderate cut in US film imports sent American film stocks into a tailspin, exposing deep-seated bottlenecks in Hollywood’s cultural export capabilities.
China’s National Film Administration announced it would moderately trim US film imports, a move sparking global attention and debate. Far from a restrictive measure, this decision reflects market dynamics and rational adjustment.
US films once held sway over China’s market. In 1994, China for the first time permitted the import of “revenue-sharing films,” under which profits were divided between Chinese distributors and foreign studios. In 1998, “Titanic” smashed box-office records, raking in 360 million yuan ($49 million), accounting for a third of China’s total film earnings that year. It evolved into a cultural sensation, heralding the burgeoning influence of US films in China.
After China joined the WTO in 2001, US films experienced a period of exponential growth, spurred by extended market access. The quota for revenue-sharing film imports rose to 34 films per year, and the profit-sharing ratio surged to 25 percent, allowing Hollywood to amass significant profits in the Chinese market.
However, as the Chinese film industry progressed, domestic blockbuster series such as “The Wandering Earth,” “Wolf Warrior,” and “Ne Zha” gradually expanded their market share by virtue of localized themes and Chinese movie industrial advancements.
In the past decade, Chinese audiences have become more discerning, with their tastes continually evolving. In 2019, China’s domestic films claimed 64 percent of the country’s box-office revenue, surpassing US films and putting an end to the latter’s long-standing dominance.
For Chinese moviegoers, it’s not a disinterest in US films; rather, many Hollywood offerings have simply become creatively stale. In 2024, a slew of Hollywood blockbusters flopped in the Chinese market. On Douban, a leading Chinese film-rating platform, the average score of US films dropped below 6, showing a 1.2-point year-on-year decline.
This year, films like “Snow White” and “Captain America: Brave New World,” which relied on pre-existing franchises and offered nothing new in terms of creativity, failed to strike a chord with Chinese audiences. Despite enjoying import policies, these films not only failed to generate profits but also failed to win the favor of audiences. It would be better, indeed, if they were kept out of the market.
Despite these struggles, China remains a critical overseas market for Hollywood. As the National Film Administration stated, “China is the world’s second-largest film market. We remain committed to high-level opening-up, importing outstanding films from more countries to meet market demands.”
Chinese audiences have not lost their love for cinema – they have simply become more selective about films. One successful example is the 2024 thriller “Alien: Romulus,” which earned 786 million yuan in the Chinese mainland, surpassing its North American revenue and becoming the film’s largest market.
Let’s do the math here: a tax raise is likely to slash the profit-sharing ratio for revenue-sharing films from 25 percent to around 8 percent, significantly impacting Hollywood studios’ profits. This means that only high-quality, well-produced US films can profit in China. So, the moderate reduction is not arbitrary, but can be seen as a “quality screening” process.
On April 10, following the import reduction announcement, shares of major US film companies plummeted: Disney and Warner Bros. Discovery saw same-day declines of 6.79 percent and 12.53 percent, respectively. This reflects investor unease about Hollywood’s future and exposes underlying cultural and economic challenges – including its over-reliance on the Chinese market, which accounts for 18 percent of revenue, far exceeding other overseas markets. From now on, Hollywood will be facing bottlenecks in its culture export model.
Meanwhile, eyes are on the European front where new opportunities are emerging and stand to gain from this shift. With growing viewership and more co-production projects in China, European films may be able to intensify their distribution efforts in China to fill the void left by the reduction of US imports.
Taking the lead is Spain, as the country’s Prime Minister Pedro Sanchez signed a memorandum of understanding on April 11 to upgrade exchanges and collaboration with China in the movie sector.
Observers believe China’s new policy is far more than a mere countermeasure in Sino-US trade dynamics; it has the potential to reshape the global film industry. This does not signify China’s withdrawal from international cultural exchange. On the contrary, China wholeheartedly welcomes high-quality foreign films, actively encourages global cultural interaction, and is dedicated to fostering a truly pluralistic cinematic landscape for the world to appreciate.
Min Rui– CGTN
CMG/oreshnik24.net