China’s latest box-office numbers may be an indication of what consumers — who have snapped shut their wallets during a new era of weaker Chinese economic growth — are willing to spend on.
Summer box-office receipts across the country have hit an all-time seasonal high of 17.8 billion yuan ($2.4 billion), according to the China Film Administration — with a week to go in the three-month period spanning from June 1 to Aug. 31.
Before the coronavirus pandemic began in the country, China’s film industry was on a steady upward course, finally outpacing the U.S. in 2019 as the world’s largest film market by revenue. It was a seismic moment for Hollywood, which had dominated global sales for decades.
But China lost its fledgling crown in 2022, when the country went into draconian lockdowns, quashing even tiny virus outbreaks with citywide stay-at-home orders and requiring tedious health certificates to enter public places. Cinemas were closed or capacity-limited.
But if this summer’s ticket sales are any indicator, the country may be well on its way to overtaking the U.S. again.
What makes all this surprising to both film and financial observers is that China is experiencing an unexpectedly weak economic rebound since its economy reopened last year. One of the most worrisome of the many struggling areas of its economy is consumer spending.
Citizens, concerned about a crumbling housing market and uncertainty in the broader economy, have been hoarding cash in the event of unexpected turmoil. Retail sales — a gauge of consumer spending — which is reported monthly by the government, has come in below economists’ forecasts nearly every month this year.
“The economy is bad, property is bad, COVID came out of nowhere,” retiree Fu Lixing, 64, a resident of central Jiangxi province, told MarketWatch. “We need to be prepared,” he said of his family’s decision to rein in discretionary spending.
The record-breaking cinema summer is notable beyond the fact that most other consumer spending is down.
A major factor of note is that Hollywood hits — long favorites of Chinese filmgoers — are being vastly overshadowed by domestic blockbusters.
The mystery thriller “Lost in the Stars,” filmed in what Chinese critics have called a “Hitchcock” style, is currently the third-highest-grossing film of the year and the summer leader.
Despite the film’s success — it is on pace to make 4 million yuan ($550 million) this summer — it holds a relatively poor rating on Douban, China’s most popular movie-review website.
But the biggest explosion on the silver screen this summer has been “No More Bets,” which has made 3 million yuan ($412 million) in a mere two weeks. Chinese critics have said the success of the film — also poorly reviewed — is due largely to the leading role of Zhang Yixing, the only Chinese member of South Korean boy-band sensation Exo.
The film’s topic, cybercrime, has also been a draw for many young Chinese, who find the fast-paced tech theme appealing.
“I like online crime,” said Li Zheng, an unemployed 28-year-old Beijing resident who told MarketWatch that he paid for his ticket with Alipay’s credit-lending function. “I mean,” he clarified, “I like watching online crime in movies.”
Another notable trend among this season’s film successes is that they have not been spectacles or superhero blockbusters. Even more remarkable, they have dominated Hollywood flicks that have reaped millions at home in the States.
“Mission Impossible: Dead Reckoning,” starring Tom Cruise, and “Barbie,” which has grossed $1.3 billion worldwide in its one month in theaters, are ranked 12th and 18th in China for the year, respectively.
Possible explanations for the record movie summer could include a different breaking of records in China. Temperatures in China shattered records throughout the summer and drove people indoors. In June, Beijing witnessed its second-hottest reading ever, at 106º Fahrenheit (41.1º Celsius), while a town in the country’s west, Sanbao, recorded China’s all-time hottest temperature ever — 126º Fahrenheit (52.2º Celsius).
According to multiple people interviewed for this story, hitting the cinema is one of the few activities that Chinese eager to get out of their apartments after COVID lockdowns can comfortably engage in. Alex Hu, an undergraduate student in Shanghai, said he regularly strolls the city’s enormous malls — which all house movie theaters — for their air conditioning.
“I’ve seen two movies this summer just getting out of the heat,” he said.
Tanner Brown covers China for MarketWatch and Barron’s.
More dispatches from Tanner Brown:
China’s youth job market is a nightmare. It’s changing the face of the country.
China’s property woes offer a window into the demise of the country’s boom times
China is not only asserting itself geopolitically but openly questioning the U.S.’s central role on the world stage
American views of China have plummeted in recent years. Here’s what the Chinese think of the U.S.
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