The massive success of Ne Zha 2, boosted by patriotic group-buys and shielded by censors, buoyed a series of triumphal state media headlines earlier this year. Box office takings for the year to date were indeed up substantially from 2024, but this was a relatively low bar after a sharp slump from a spike in 2023. Even that year’s haul fell well short of the industry’s pre-pandemic peak in 2019. Moreover, an outright majority of this year’s earnings came from Ne Zha 2, without whose unprecedented success the landscape would look much bleaker. Once the Ne Zha surge had largely subsided, China Daily noted that box office takings for the key May Day holiday fell 51.1% from last year.

CDT Chinese editors have highlighted a pair of recent WeChat posts on the Chinese movie industry’s current doldrums. The one excerpted below, from Rhino Entertainment, gives gory details of the film market’s regression to the levels seen in 2012:

This April’s chill brought various other historic moments. The daily box office total for April 2, for example, was just 1.2 million yuan, similar to what we saw 13 years ago, and the lowest figure this year. Worse still, the total number of screenings that day was 342,000, while the number of tickets sold nationwide was a shocking 347,000. That works out to an average of one audience member per screening, meaning that most theatres were essentially deserted.

The terrifying inefficiency of single-person audiences suggests that most cinemas would be better off closing their doors than operating at such a loss. Once the formidable revenue juggernaut of “Ne Zha 2” has passed, cinemas could be facing months of pain. The “one-person private screenings” of this unprecedented market cooldown are destined to go down in history.

If we break down April’s figures further, we see even more serious problems. Despite the chilling numbers, “Ne Zha 2” still clung to its position as the month’s box office champion. Three months after the film’s release, it is still having to prop up the market as whole with its last gasp of popularity. For new films, this is just embarrassing.

When Feng Xiaogang’s new film “We Girls” recently broke the 200 million yuan mark at the box office, the director posted on WeChat that it was the first film to have done so since Spring Festival, and the first that had not lost money. You could almost feel the helplessness and despair. For China’s vast domestic film market, it had been two months of stagnation, of barely treading water. [Chinese]

The second essay, by Ni Ren’s Black Noise, asks how this happened. Apart from an early reference to the industry’s status as an icon of China’s “national destiny,” the piece focuses on investor opportunism and its role in hollowing out the sector’s creative spirit. Only at the end does it point out the political forces that fueled the frenzy.

China’s box office revenue for April 2025 was lower than in April 2012.

That’s not even the most alarming figure: back in 2012, there were just over 3200 movie theaters nationwide, whereas now there are over 11,000.

In other words, while the number of theaters in China has tripled, box office takings are still on a par with what they were in 2012.

Sure, “Ne Zha 2” is red hot, but one hit film can’t save the whole industry. If anything, it just highlights how bleak things are for the industry as a whole.

How is it that box office receipts have regressed 13 years? How did things get so bad?

In fact, the chill across the movie industry is a symptom of a broader cooldown across the economy as a whole. The sector’s big gains from 2017 to 2021 were all flab, not real, healthy muscle.

The bone-deep chill the movie industry is enduring now balances the wildness of those years’ lavish excesses.

From 2015 onward, the movie industry became the darling of investors. Real estate companies, internet tycoons, P2P platforms, even furniture vendors and baijiu distillers swarmed in to invest on the simple premise that as a “content industry” aligned with our “national destiny,” film seemed to offer a quick buck, a powerful megaphone, and an aura of glamor.

So the money surged in, stars’ fees rocketed, scripts were optional, and IP was a must. Bids for mediocre novels’ adaptation rights soared to tens of millions of yuan, and as long as they were well-connected with investors, even the lousiest directors could helm billion-yuan projects.

Obviously, this was about making moolah, not movies

What really fueled all this wasn’t audiences, but faith—faith in the cinematic art, and in the value of its products.

As with China’s other overhyped sectors, the movie industry’s dignity was among the casualties. Take music festivals, for example: nowadays, festivals are cropping up everywhere, but we keep hearing about musicians being shut out of the venues where they’re scheduled to perform. The organizers clearly don’t give a damn about the artists, and festivals have long since stopped being about belief in the music itself.

The film industry tends to blame its current woes on the pandemic, but that was no more than a catalyst: the real deathblow was capital flight. Those three pandemic years did gut theaters’ cash flow, but more importantly, they reminded investors of the cruel reality that the movie business doesn’t tend to generate quick profits.

Hot money’s biggest fear is getting bogged down, but making movies is by nature a slow process. Project development, gaining censors’ approval, and production all take time, and theater scheduling is out of your hands, to say nothing of the fact that box office uncertainty means that this “investment” is inherently something of a gamble.

So the smart money began to go elsewhere. Firms that once relied on spinning stories for investors to raise funds went bust or cut staff and restructured; “film and television concept stocks” are no longer favorites on the secondary markets; and directors who once dreamed of “billion-yuan box office hauls” now do shopping-platform livestreams, or have dropped off the radar completely.

Many established actors now can’t land a single role.

Many once-prominent film and TV investors have “pivoted to cultural imagineering” or abandoned film entirely to move into AI, chipmaking, or renewable energy. They care about money, not movies, and moved on the second the movie business lost its luster.

Now that they’ve gone, the real problems have come into focus:

Creators lack the fundamental impetus to create. Whereas before, financial incentives drove people to churn out product quickly, we find that many so-called “directors” don’t actually know the first thing about telling a story, now that there’s no one spurring them on.

The film industry ecosystem has been devastated. Investment-driven hype warped the whole industry’s notion of “success” as dependent on big productions, big stars, aggressive marketing, and online buzz. Now that the funding has dried up, that business model has collapsed.

Audiences are no longer easily duped. A famous face and online buzz once meant a billion-yuan gross, but filmgoers have grown wary. Now, unvarnished word-of-mouth on Xiaohongshu [Rednote], Douban, and Zhihu can burst a film’s marketing bubble within hours.

It would be fair to say that the problem with Chinese cinema has nothing to do with that proverbial fig leaf “cyclical downturn,” but rather a crisis of trust after a long period of artificial expansion.

Cinema as an artform is crying out: “I am not your ATM!”

But Chinese cinema is already at death’s door.

All industries are cyclical by nature, and film is no exception, but Chinese cinema’s current low ebb is no natural tide—rather, it’s the collapse of a man-made bubble. We treated movies as financial assets without giving them time to grow and develop, let alone allowing them creative space.

While in the U.S., Clint Eastwood is still going strong as a filmmaker in his nineties, many Chinese “wunderkind” directors have already “retired” to dabble in other capitalist ventures by the time they reach their thirties.

“Directors”? Pfff! They’re nothing more than capitalist tools.

When will people take industries seriously on their own terms, instead of treating them as potential goldmines?

How did China’s status as a “global film superpower” get so hyped up in the first place? “China’s box office takings are the world’s highest,” “a billion moviegoers,” “domestic productions soaring” … these slogans were repeated ad-nauseum in countless Powerpoint decks. But investors are sharp, and know better than anyone that if the industry’s better at pitching stories to investors than to audiences, it has no future.

When the investors decamped, the storytellers were aghast to discover that there were no takers for their wares, no one wanted to invest, and that sentimentality no longer sells.

As brutal as it may sound, China’s film industry is going through a long-overdue culling of the herd. Over the next few years, any company that lacks good content or carry-through will die off. There’ll be a thorough exodus of the speculators, and when the tide goes out what’s left will be those with real passion for and commitment to film.

Don’t count on the next “Wandering Earth” or “Battle at Lake Changjin,” or even “Ne Zha” to revive the whole industry. The real cure is not box office miracles, but systematic restoration of trust, creative mechanisms, and industry standards.

Development driven by irrational exuberance takes a heavy toll, draining the whole industry’s vitality until there’s nothing left.

The film industry is like many others in China—behind the capital, there’s an orgy of power. Power aims a firehose of capital at various industries that should have remained pure, laying waste to them in the process. [Chinese]

The stifling effects of political interference in economic sectors were also a focus of a recent translation on "China’s officialdom complex."