Hollywood

Hollywood Sold Its Soul for China’s Box Office. The Cheque Bounced

China's biggest film holiday has crashed to 1.16 billion yuan across 96,000 screens. The market Hollywood rewrote its films for has stalled, and the studios have little to show for it.

Husam Sam Asi 8 October 2026, 11:25 · Updated 12 October 2026, 14:31

A pedestrian passes a poster for Traces of Justice at a Shanghai cinema, 2 October 2026. Photo: Chen Yuyu / China Daily.

China’s golden week has turned to lead. The National Day holiday, one of the two weeks meant to carry the Chinese film year, closed on Wednesday with 1.16 billion yuan, roughly $170 million. That is more than a third down on last year, the third fall in a row, and less than the country managed in 2022 under zero-Covid restrictions. Citi’s analysts called the opening days weaker than the pandemic period.

It happened in front of nearly 96,000 screens, the most of any country and four times what China had in 2014.

That year matters. In the summer of 2014 Transformers: Age of Extinction was earning more in China than in America, 13 cinemas were opening there every day, and Hollywood agreed that China would lead the world’s box office within five years. Jeffrey Katzenberg, who had just planted a DreamWorks studio in Shanghai, spoke for the whole town: “The Chinese people love Hollywood movies and we will cater to their need.” Twelve years on, the cinemas are built. The audience has made other plans.

The screens came, the crowds left

The annual totals hid the rot for a while. China’s box office peaked at 64 billion yuan in 2019. Last year it reached 51.8 billion, and nearly a third of that came from one animated demon child, Ne Zha 2. Take him away and 2026 shows the market’s true size. The Lunar New Year holiday fell almost 40 per cent, the first half fell 40.6 per cent, and by late September the year stood at $4.28 billion against North America’s $7.64 billion. China did take the world title in 2020, when the pandemic shut American cinemas. It has since handed it back.

The arithmetic per screen is brutal. China had about 70,000 screens in 2019 and has added some 26,000 since. Each one earned roughly 40 per cent less in 2025 than in 2019, and 2025 was the good year.

The missing customers are young. Under-25s made up nearly 40 per cent of the audience in 2018 and 21 per cent in 2024. Their phones are full of micro-dramas, a business forecast to take $9.4 billion in 2025 against the cinemas’ $7.4 billion, and Citi found holidaymakers choosing travel over tickets. Beijing’s answer has been to declare 2026 a “Film Economy Promotion Year” and budget more than 1.2 billion yuan in ticket subsidies. The subsidy pot is bigger than everything golden week took at the tills.

A market built to obey

The forecasts of 2014 counted heads: a billion consumers, a multiplex on every corner, growth without end. They left out who owned the shop. In 2018 film regulation passed to the direct control of the Communist Party’s Central Propaganda Department, and the golden weeks became a showcase for patriotic epics. In 2019 the anthology My People, My Country led the holiday past 4 billion yuan. Last year the state’s China Film was still fielding the Korean War saga The Volunteers.

This year the big state studios led no new release at all. The holiday winner, the crime procedural Traces of Justice, came from the ticketing platform Maoyan and the online-fiction group China Literature. Chinese producers released about 100 fewer films in 2024 than the year before, and Omdia warned that the gap would show on screens for two years. Wang Changtian, chairman of Enlight Media, said as much last summer: “If we don’t change things, the entire industry could head towards decline.”

An industry raised to please one censor and one home crowd has nowhere else to go when that crowd stays in. Chinese films earn 98 per cent of their money inside China. Even Ne Zha 2 found only 2 per cent of its fortune abroad.

The house always wins

Hollywood’s side of the bargain was thin from the start. The 2012 trade deal let in 34 revenue-sharing films a year and gave the studios 25 per cent of each ticket, up from 13. For that quarter they changed their films. The invaders in Red Dawn turned North Korean in post-production, the Chinese cut of Iron Man 3 acquired a Chinese doctor, and by 2020 PEN America could document a decade of studios cutting to please Beijing’s censors.

Chinese money was meant to be the other prize. Wang Jianlin of Dalian Wanda paid $3.5 billion for Legendary Entertainment in 2016, and a Hollywood marketing executive told UKScreen the following year how such investors would fare: “Hollywood is like a casino: No one makes money other than the owner.” He was right about Wanda. Legendary bought itself back in 2024. The rule also ran in reverse. In China’s casino the house was Beijing, and Hollywood was the tourist at the tables. Katzenberg’s Shanghai studio has been wholly Chinese-owned since 2018.

A studio executive in the same 2017 report was sure of Hollywood’s leverage: “They need our movies in order to fill out the thousands of theatres they are building.” China filled them with its own. American films took 36 per cent of the Chinese box office in 2018 and 14 per cent in 2024. When Donald Trump’s tariffs arrived in April 2025, the film bureau announced it would “moderately reduce” American imports, a reprisal that cost Beijing almost nothing.

Hits still happen, on Beijing’s terms. Zootopia 2 took 4.25 billion yuan, about $606 million, the most any imported film has earned in China. At the standard share, roughly $150 million of it went home to Disney. Spider-Man: Brand New Day is this year’s best import at $234 million. Christopher Nolan’s The Odyssey passed $1 billion worldwide and found $107 million of it in China.

Waiting for the Avengers

The last irony belongs to the brokers. With the year’s box office in trouble, Chinese analysts are pinning their late-year hopes on the next Avengers film, and Avengers: Endgame went back into cinemas on 25 September as exhibitors ran short of new titles. The market that was going to make Hollywood rich is asking Marvel for a rescue.

Believers remain. Rance Pow of Artisan Gateway, whose figures the studios rely on, still expects China to become the world’s biggest cinema market. Gower Street Analytics forecasts $6.55 billion this year, 22 per cent below the pre-pandemic average. The seats are certainly ready.

Hollywood changed its villains, cut its flags and courted the censors for the sake of a billion customers. The customers belonged to Beijing all along, and now Beijing is losing them too.

Sources: CCTV Finance via 21st Century Business Herald; Beijing News; AAStocks (Citi research); Xinhua via Bastille Post; Caixin Global; China News Service; South China Morning Post (2025 total); South China Morning Post (Lunar New Year); Screen International; Patrick Frater (September box office); Patrick Frater (2025 half-year analysis); Patrick Frater (Rance Pow interview); Patrick Frater (Gower Street forecast); The China Project; Omdia; Deadline; CGTN; China Digital Times; Bloomberg; Asia IP; PEN America; Los Angeles Times via AOL; Cartoon Brew; Xinhua via China Daily; AFP via Jamaica Observer; Xinhua (Zootopia 2); WION.