China View: Public Interest Continues To Fade As Film Industry Faces Financial Slump
Elizabeth Fernandez/Douglas Sacha
China’s film industry has been developing at a rapid pace. In just a few decades, the industry has evolved into one of the largest film markets in the world and has become a critical part of the local economy, with box office revenues of 29 billion RMB ($4.8 billion) in 2014. The government has continued to invest heavily into the industry’s development, which has led to the construction of theaters with stadium seating, 3-D projection, and IMAX screens across the country. While the industry has experienced substantial historical growth, it is currently going through a major financial slump.
While there have been periods in which people pour into theaters, overall ticket sales have been down and the industry has struggled to rebound since 2020, when all theaters were forced to close due to the Covid-19 pandemic. There are fears that the government’s direct involvement in the industry through film production, regulation, and censorship has stifled creativity, which has negatively impacted movie theater attendance. There are also concerns that the growing popularity of streaming services, microfilms, and short-form video content has hampered the resurgence of the industry. From 2018 to 2024, the number of ticket buyers aged 20 to 24 dropped from 30 percent to 17 percent. How has the government tried to improve movie theater attendance?
Statista
The domestic film industry started under a state ownership model with a planned economy in which the China Film Export & Import Corporation (CFEIC) would purchase the films produced by studios and then issue film prints to local distribution companies. During his reign, Chairman Mao Zedong and his administration viewed cinema as a powerful ideological tool to spread the government’s values. To control film production, censorship and film licensing systems were established, which required that all films be approved by the government before being publicly accessible.
Following the death of Mao and the implementation of economic reform policies in 1979, new film studios started opening and attendance started to rise. However, the 1980s were fraught with policies that hampered this growth. In 1984, “the self-responsibility system” was implemented and led to the withdrawal of government financial aid to the studios, which severely impacted the development and profitability of film studios. In 1986, the Ministry of Radio, Film & Television (RFT) was established and issued Document 975, which allowed studios to share box-office profits with the film distributors. While this policy aimed to help studios make a profit, this strategy led to a loss of revenue for Chinese distribution companies. To spur economic growth, the government also started funding studio productions of Main Melody films, which were movies that focused on Chinese historical events and figures to promote patriotism, socialism, and other government values.
However, the domestic film industry did not begin to stabilize and grow until the government decided to allow the screening of foreign movies in 1993. While this helped to boost attendance and profit, these movies started outnumbering the domestic films in the number of screenings and tickets sold. To help domestic film studios, the Ministry of RFT issued a reform that relaxed the licensing policy system and allowed for private investment in the production of new films.
In 1998, the State Administration of Radio, Film and Television (SARFT) took over for the Ministry of RFT and in 2003 issued Document 18, 19, 20, and 21 along with other regulations. These policies allowed for foreign and private capital to participate in both film production and movie theater construction, which “functioned as a major stimulus to the domestic film industry and drew the attention and interest of both domestic and overseas investors, bringing about an astonishing boom of film production and film market”. In 2007, box-office revenue hit 3.3 billion RMB (approximately $455 million) and by 2010 revenue reached 10.17 billion RMB (approximately $1.4 billion).
“The Chinese film industry alone does not have the capacity nor the stability to churn out enough titles to feed the domestic market,”
-Ying Zhu, Director of the Center for Film and Moving Image Research in the Academy of Film, Hong Kong Baptist University
One of the most significant policies passed in recent years was the Chinese Film Industry Promotion Law in 2016, which aimed to promote development within the film industry and cultivate “a legal and transparent film market, offering an equal and fair infrastructural framework for all market participants”. This included support for film education as well as incentives for financial and insurance industries to support filmmaking. Under this law, local governments were also encouraged to provide support to the industry. This legislation helped to maintain the growth of the industry until the pandemic in 2020, where profits and attendance fell dramatically due to strict lockdown policies and widespread theater closures. The film industry has continued to struggle since this period, despite government intervention.
To promote the development of the country's film industry, the China Film Administration issued its 14th Five-Year Plan (2021-25), which aims to expand the construction of movie theaters across the country, enhance the quality of domestic films, and “expand the influence of Chinese movies to serve the country's aim to build a powerful country in terms of culture”. However, it has had limited success in spurring growth. This is exemplified by box office revenue in 2024 which totaled 42.5 billion RMB ($5.82 billion), down 22.6% from 2023, and 34% from 2019. Recently, ticket bookings for movies during the Spring Festival holiday in January of 2025 have reached 200 million yuan ($27.8 million), which suggests there will be a large turnout and that the state of the domestic film industry is improving.
While there have been signs that the sector is starting to stabilize, overall trends suggest that local film production and ticket sales are continuing to decline. The government’s control over the industry and the film production process has contributed to this downturn. While general guidelines are provided on the types of films and topics that are considered acceptable for audiences, there is no clear set of standards. This ambiguity surrounding the censorship and licensing regulation systems also makes it challenging for studios to consistently follow rules. This has also pushed studios to self-censor their movies, which has negatively impacted the quality of the films and has resulted in lower attendance. While creativity, public interests, and market demands should guide the industry, many film studios are worried about whether a movie screening will lead to their closure. “What they want is to just avoid mistakes, irrespective of whether a movie is good or bad”.
