Cinema, often considered a tool for exerting cultural influence, has for a long time been dominated by Hollywood; China has however emerged as its challenger, and now occasionally surpasses the United States in box office revenue.
Apart from its commercial success. Beijing’s control over Chinese films’ contents is considerable, ensuring these align not only with the tenets of the Communist Party but its geopolitical outlook—tellingly, in its cinema, Americans are frequently cast as the ‘bad guys’.
China: An Eldorado for blockbusters
China’s film industry has become a powerhouse. In 2023, China's box office revenue reached $7.71 billion, making it the second-largest film market globally. While still trailing Hollywood’s $9.07 billion, China’s progress has been remarkable. In peak years, such as 2020, China even surpassed North America in annual box office earnings, raking in 2,7 billion USD compared to 2,3 billion.
While the industry produces a substantial number of films annually, Hollywood remains more prolific. In 2022, China released 174 feature films, whereas Hollywood produced 1,361. However, China's audience heavily favors local productions: in 2024, domestic films accounted for 78.7% of total box office revenue, signaling a clear preference for homegrown content.
As a consequence, China’s film theatre infrastructure has expanded rapidly, as its over 90,000 screens far exceed the 44,000 screens of the U.S. and Canada combined. Domestic consumption is fueled by a lower ticket price (an average of $7 per ticket in China compared to $14.00 in the U.S), making cinema a popular social activity, especially during the Chinese New Year.
However, this eldorado suffers from constraints at home that prevent it from becoming a global powerhouse, as it is controlled by a mixture of state-backed and private enterprises.
The Tight Grip of the Party
Unlike Hollywood, where market forces and creativity drive the industry, China’s film sector operates under the aegis of the government. The National Radio and Television Administration (NRTA) and the Publicity Department of the Communist Party dictate what can and cannot appear on screen. Films must align with socialist values, avoiding topics considered dangerous for the harmony of the society (LGBTQ+ representation being one), while unsanctioned portrayals of historical events are largely off-limits—no period drama about the 1989 Tiananmen Square protests and subsequent massacre here.
When it comes to the importation of foreign films, there are barriers. The Chinese state limits the number of such imported films to 34 per year, unless foreign movies engage in co-productions with Chinese firms, incorporating local actors, settings, and storylines to gain favor with regulators (such as the Great Wall movie starring Matt Damon).
Even when foreign films do make it into Chinese cinemas, edits are often required to conform to state-imposed standards. Doctor Strange (2016) altered a Tibetan character to avoid associations with the region’s political sensitivities and Top Gun: Maverick (2022) removed the Taiwanese flag from Tom Cruise’s jacket to appease Chinese authorities—though it was later restored after backlash in Western markets.
China, then, has considerable leverage over the U.S., since Hollywood remains heavily dependent on Chinese audiences. This reliance has undoubtedly led studios to self-censor, even before a single frame of film has been shot.
Cinema as a burgeoning soft power tool in the hands of China
Beyond commercial success, Beijing recognizes cinema’s potential as an instrument of soft power. The government actively promotes patriotic films that reinforce national pride, such as The Wandering Earth (2019), or that promote Chinese culture, such as the animated movie Ne Zha 2 (2025), with the latter becoming the most profitable movie of its category worldwide only 3 days after its release. Meanwhile, Chinese firms are making inroads abroad, as conglomerates like Wanda Group acquire AMC Theatres and Legendary Entertainment to expand their global footprint.
The Belt and Road Initiative has extended this influence, fostering film collaborations in Africa, the Middle East, and Southeast Asia. China envisions its cinema as an alternative to Hollywood’s cultural dominance. Yet, despite these ambitions, Chinese films rarely achieve mainstream success outside their home market because of the emphasis put on nationalistic narratives.
The success of Ne Zha 2 could reveal an evolution in Chinese soft power. Before, China produced action movies inspired by its history, but with mixed results, such as The Great Wall (2016), considered a flop. Ne Zha 2 is a different affair, as it weds animation with Chinese culture and an overall promotion of classical values. To a foreign audience, this combination is much more appealing.
In this then lies a real threat for Hollywood: Chinese works (animated or not) which appeal to tradition-minded Western audiences, could very well take ever larger slices of the pie.
Statement
China’s film industry is a financial juggernaut, but one shackled by its government. While its blockbusters continue to break domestic records, government intervention hinders innovation. Its cinema is however a way for Xi Jinping’s China to culturally assert itself in the wider world. Its influence will only continue to grow, threatening Hollywood’s dominance.