China on Thursday said President Trump would soon restrict Hollywood movie imports in retaliation for escalating US tariffs on imported Chinese products, targeting one of the most well-known American exports.
Industry analysts said the financial impact is likely to be minimal as Hollywood's box office revenue in China has declined significantly in recent years.
Three decades after China imported 10 Hollywood films a year, Beijing's national film administration said Trump's tariff actions would make China's domestic demand for US films even more sour.
“We follow market rules, respect the choices of our audience and moderately reduce the number of American films imported,” the NFA said on its website.
Hollywood Studios once turned to China, the world's second largest film market, and helped to boost film box office performance. However, domestic films are increasingly outpacing Hollywood fares in China, and this year has overturned Pixar's “Inside Out 2” and become the most growing animated film of all time.
Chris Fenton, author of “Feeding Inside the Trillion-Dollar Dilemma Facing Hollywood, NBA and American Business,” said limiting US-made films was “a super-remarkable way for China to make a statement of retaliation on a near-zero downside.”
Hollywood films account for just 5% of the overall box office revenue in the Chinese market. Hollywood Studios receives only 25% of ticket sales in China, but compared to twice the number in other markets, Fenton said.
“This famous Hollywood punishment is a move of all strength by Beijing that Washington will certainly be noticed,” Fenton added.
Trump didn't jump to Hollywood's defense. “I think you've heard something worse,” the president said when asked about China's restrictions.
Many Hollywood celebrities supported Trump's democratic opponents in last year's election.
One entertainment industry source predicts that the Big Hollywood blockbuster, which continues to attract Chinese movie fans, could still reach the big screen. Walt Disney's Marvel superhero film Thunderbolts began its summer hit season and recently got permission to make its debut in China on April 30th.
It was not clear whether China would approve other major releases this summer, such as Paramount's “Mission Impossible – Final Calculation.”
Limited impact
IMAX said it expects large screen slates, including Hollywood, China and international films, will not be substantially affected by the restrictions.
“We continue to look forward to a strong year for IMAX in China, leaving us away from the first quarter, where we achieved the highest growth ever,” an IMAX spokesperson said in a statement to Reuters.
Seth Shafer, principal analyst at S&P Global Market Intelligence Kagan, predicts the limits are limited.
“Currently, only about 25% of the wide-ranging films in the country are released in China, and that percentage has steadily declined over time due to increased competition with the local film production industry in China,” Schafer said. “For domestic films released in China, less than 10% of the film's global box office revenue usually comes from China.”
The Marvel film Captain America: Brave New World, released in February, won $14.4 million in China of its $413 million global receipt.
In the past, imports, including “Titanic” and “Avatars,” have been destroyed at the box office in the Chinese market, and have become directors such as actors such as Leonardo DiCaprio and the names of James Cameron among generations of Chinese film enthusiasts.
Since 2020, Chinese-made films have consistently accounted for around 80% of annual box office revenue, up from around 60% previously.
On China's highest-ever box office list, only the top 20 imported film Avengers: Endgame ranked with 42.5 billion yuan ($579.83 million). All the remaining films in the top 20 are produced domestically.
