Hollywood's decline in China: Trade war threatens cinema ties
American movies disappearing from Chinese theaters? It's possible, but there were so few of them that Hollywood certainly won't collapse because of it.
The U.S. trade war with the rest of the world is intensifying. This is especially true as it doesn't seem to be going as Trump imagined, where, after his threats and announcements of high tariffs, countries would come begging for mercy. Many key players are not inclined to bow to U.S. power and even promise significant retaliation.
The Chinese dragon breathes fire
The most important of these players appears to be China. Right after the announcement of American tariffs, they rolled out heavy artillery, announcing not only high retaliatory tariffs but also restrictions on exporting rare earth metals to the USA. These metals are absolutely essential for the American economy in producing modern devices.
Following this exchange, a new cultural debate has emerged, specifically related to cinema. There are comments that the trade war will lead to either limiting or even entirely ending collaboration between the countries in terms of film distribution. China is already threatening to employ various tools that would limit the profits of American companies—and banning Hollywood films can be achieved easily, as distribution in the local market is essentially controlled by entities under party influence.
Chinese youth may greatly miss watching films with American superheroes in their local theaters, but their producers, cut off from a huge market, will suffer even more. There is some logic to this thinking, but it's crucial to make an important caveat that seriously weakens arguments about the impending financial disaster for Hollywood.
Profits at the level of peanuts
The simple caveat is this: American films are already relatively rare on Chinese cinema screens and do not bring the stunning profits desired by Hollywood. Their disappearance will not result in a repertory or attendance catastrophe in China.
The current share of American cinema in the Chinese market is not a crucial element of the economic play between the superpowers. This situation has been a source of frustration and disappointment for Hollywood for years. However, this time it may prove to be a significant relief: the absence of massive profits means there won't be massive losses either.
Almost a year ago, the critical industry magazine "Variety" sounded the alarm: "For the past four years, Chinese audiences haven't shown much interest in Hollywood movies." On Statista, which publishes detailed market data, numbers confirm this conclusion. In 2024, as much as 85% of the Chinese cinema repertoire was local productions. Only 76 titles came from abroad, with a market share of 21%, and these included productions not only from the USA but also from other countries, such as popular Japanese and Korean animated films or Bollywood titles. Considering this, it turns out that the American share in the Chinese film market did not even exceed 4%.
This is a drastic decline compared to previous years, when Hollywood could boast double-digit results. Analyses of this phenomenon show that the main reasons are political and economic tensions between China and the USA and an increasing Chinese trend towards domestic big-budget blockbusters.
"The trade war with China couldn't have come at a worse time for Hollywood," comments Tomasz Raczek, a journalist and film industry expert. "Hollywood films have recorded worse attendance results in China for several years. The reasons are twofold: firstly, Chinese authorities repeatedly countered American blockbusters on their screens with their productions, and secondly, Hollywood lately has been unable to produce new, exciting, and unique film spectacles that aren't sequels or repeats. Hollywood is experiencing a crisis, and the trade war with China can only deepen it."
Swan song in Minecraft
The American industry sought a chance to reverse this trend with the upcoming premieres of big, essential titles. There was some potential for success—a few days ago, "Minecraft: The Movie" indeed broke the Chinese box office, earning almost $15 million during the opening weekend and jumping to first place, ending the streak of the local hit "Ne Zha 2," which topped sales for over two months. However, at least until the trade war escalates, this could be the swan song of Hollywood cinema in China.
"And Hollywood had high hopes for the rest of the season," adds Krzysztof Spór, a film critic and market observer. "In summer, several big productions were set to hit Chinese theaters, including the next part of 'Mission Impossible.' Some even claimed these titles could bring Hollywood significant profits in China, comparable to previous gains. This is unlikely to happen," assures the expert.
"There is an even bigger problem related to the trade war, although only indirectly with China: since big changes are on the horizon in the global economy, the natural tendency will be the desire—or rather the necessity- to save. And what do people save first? Naturally, pleasures and entertainment. Stock markets are reporting declines; large cinema chains already dread ticket sales in the coming months. Disney is voicing concerns about the profits of its large amusement parks. This could be a serious industry problem, and since Trump is essentially at war with it, he certainly won't care," added Spór.
