China considering a ban on Hollywood movies in tariff escalation

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Summary

China is said to be mulling over a ban on Hollywood movies going into the country as a response to the tariffs imposed on them by the US. After only just surfacing from some tough years in China, when Marvel was effectively banned from the country (no Marvel film was cleared to screen in China between 2020 and 2022), this year had heralded a thawing of the official attitude to allowing foreign movies in, notably from the US major studios.

The US has a significant trade surplus with China in the field of movies, standing at over $3 billion Gross between 2017 and 2019, but down to $1.2 billion in 2024. The figure for net revenue flows (what leaves each country after exhibitors have had their cut) peaked at $835mn in 2017 and was very close to $300m in 2024.

Figure 1: US trade balance with China in movies Source: Omdia

Even though the Hollywood share of the market has declined in recent years, the major US movies still take around 20% of what will be the world’s largest box office market in 2025. The studios receive 25% of the gross revenue, unlike the rest of the world where the figure is closer to half. The films able to be imported on a revenue share deal are subject to a quota, and these are mostly Hollywood titles. On top of this, more films are brought under a flat fee system, which is more suited to indie and non-Hollywood movies. There were 42 US movies released in China in 2024, a recovery from a stricter import period during COVID. This was from a total of 92 foreign films. The authorities are pushing cinemagoing in their wider drive to increase spending, especially as cinema venues are often found in shopping malls. To help achieve this, there were subsidized tickets available between December 2024 and February 2025.

In fact, Hollywood in China has been in the doldrums since 2020, and is the result of the authorities not allowing certain films in, favouring Chinese films at certain times of the year and a reduced interest from Chinese audiences – probably driven by political hostility between the two countries. In 2024, underlining a gently rising tide for US films, eight out of the top-10 films were Chinese supplemented by Godzilla X Kong: the New Empire (US) and The Boy and the Heron (Japan). The latter is one of 24 Japanese films to be released in 2024.

As I have written recently, for the Chinese market to achieve its full potential, it needs high-performing Hollywood titles in it. This certainly wasn’t the case in 2024, when the market fell by 23% over 2023, with a 44% slide in the peak summer season’s gross box office. The revenue earned by local films dropped 27.3% in 2024. There were 100 fewer local releases into the market in 2024 on 2023, which was a contributory factor in the poor year for cinemas and domestic movies. Total domestic releases dropped back to just over 500 in 2024, which is 85% of the total number of first-run films released, but down from 612 in both 2023 and 2019.

In addition, there are over 90,000 screens to fill in China, an extra 4,600 added in 2024. This is more than double the number in the US. And they need to be filled due to a decline in the youth audience. In 2018, cinemagoers under 25 made up nearly 40% of the audience, while in 2024 the equivalent figure is 21% (according to a recent report from China Film Association). More specifically, from 2018 to 2024, the proportion of ticket buyers aged 20-24 in China dropped from 30% to 17%. At the other end of the age scale, over 35s were only 20% of the market in 2018, rising to one third of visitors in 2024. One reason may be that, as stated already, there are fewer Hollywood action movies coming into the market, which are often aimed at young men. Another reason is that the unemployment rate amongst young people is at 20% which leaves this key audience with less disposable income for cinemagoing. 

The trade balance is so weighted towards the US because very few Chinese films are successful in the US. The top-10 Chinese movies at the US box office only includes three films from the last 6 years.

Top 10 Chinese films at US Box Office

Source: Omdia

In 2025, the Chinese animated phenomenon that is Ne Zha 2 was released in US, grossing $20m, placing it in the top-5 Chinese movies in the US. The highest grossing was Crouching Tiger, Hidden Dragon in 2000 ($128.1m). There are only a handful of specialist distributors that take on Chinese films (apart from Warner Bros, releasing Chinatown 2 in 2018 and Lionsgate with Monster Hunt 2 also in 2018). These include CMC Pictures, Well Go USA Entertainment, and China Lion Film Distribution.

Given this context, and speaking purely in economic terms, it would not seem sensible to ban Hollywood films. Even though banning US films would hurt film studios to the tune of around $300m a year, the bigger picture is that Chinese cinemas need content to play and there are not enough home-grown films to sustain the number of screens, which would hurt its cinema sector. Political considerations, however, are a different matter.

Appendix

Author

David Hancock, Chief Analyst, Media & Entertainment

[email protected]