After three decades during which China annually imported 10 Hollywood movies, its National Film Administration said Trump’s increase of tariffs on Chinese imports would further sour domestic demand for U.S. cinema in China after years of decline.
Chris Fenton, author of “Feeding the Dragon: Inside the Trillion Dollar Dilemma Facing Hollywood, the NBA, and American Business”, said the move was a “super high-profile way to make a statement of retaliation with almost zero downside for China.”
Now, U.S. films account for only 5% of the overall box office receipts in China’s market. And worse for Hollywood, China taxes that small amount 50% before any revenues go back to the USA,“ Fenton told Reuters.
Hollywood studios receive only 25% of China’s box office whereas other markets give studios double that, he said.
Earlier this week, two influential Chinese bloggers suggested that one response to Trump’s tariffs would be to ban or restrict American movies. Some exhibitors dismissed the possibility, noting China’s Film Bureau had given Marvel’s “Thunderbolts” an April 30 release date.
Seth Shafer, principal analyst at S&P Global Market Intelligence Kagan, predicted the restrictions would have limited impact.
IMAX said it expects its exhibition slate, which includes Hollywood, Chinese and international films, would not be materially impacted by the newly announced restrictions.
In 1994, China began importing 10 American films each year through the internationally recognised revenue-sharing distribution model. Imports including “Titanic” and “Avatar” became box office smashes in the Chinese market, making actors such as Leonardo DiCaprio and directors such as James Cameron household names among Chinese film lovers across generations.
Since 2020, domestic films have consistently accounted for around 80% of annual box office revenue, up from around 60% previously.
On China’s all-time box office list, only one imported film ranks in the top 20 - “Avengers: Endgame”, with revenue of 4.25 billion yuan ($579.83 million). The remaining films in the top 20 are all domestic productions.
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