China’s Film Industry Finds Hope in Ne Zha 2’s Unprecedented Success
The animated sequel, Ne Zha 2, is sparking renewed excitement within Beijing’s struggling film sector. This innovative reimagining of Chinese mythology, inspired by a classic 16th-century novel, has achieved remarkable box-office success, amassing a staggering $2.03 billion. It now holds the distinction of being the highest-grossing animated film globally, surpassing Pixar’s Inside Out 2 which previously earned $1.7 billion. Additionally, it stands as the top-grossing film in a single market, marking a significant turnaround for an industry that has been contending with post-pandemic challenges.
Following a steep decline where ticket sales plummeted by 23 percent in 2024, resulting in revenue of just $5.8 billion—the lowest in a decade—many industry insiders feared that younger audiences might be permanently shifting away from cinemas for free mobile entertainment options. The phenomenal performance of Ne Zha 2 raises an essential question: Can this blockbuster act as a catalyst to reignite enthusiasm for cinema and restore vigor to China’s once-thriving film industry?
Rance Pow, the president of Artisan Gateway, emphasizes that Ne Zha 2‘s success illuminates the creative capabilities of Chinese filmmakers while reassuring that audiences have not entirely abandoned the cinema experience. “However, for China’s film industry to regain sustainable growth, a diverse range of engaging films is necessary,” he pointed out.
Pow also raises concerns regarding the current dynamics of the Chinese box office, which appears increasingly lopsided. “The box office figures for Ne Zha 2 exceed the combined total of all other films released in China during 2025 so far,” he noted. The early Chinese New Year period has become crucial for yearly performance, leading major films to cluster their releases in this brief window, thereby diminishing the variety available throughout the year.
Other notable films from 2025, such as Detective Chinatown 1900 and Creation of the Gods 2, also premiered during this competitive timeframe. Conversely, Hollywood’s most significant release, Captain America 4, has only garnered about $14.4 million since its February debut, starkly contrasting with the $180 million earned by Captain America 3 in its peak year in 2016.
Additional pivotal periods that typically buoy the market, including mid-summer blockbusters, National Day in October, and year-end festivities, have seen declining attendance since the pandemic, according to Pow. He warns that both local and international films now strive to rekindle audience interest from a low point.
Ongoing economic issues and evolving media habits among China’s youth further complicate the road to recovery. Despite government aspirations for a >strong 5 percent growth in 2025, the country faces challenges such as a real estate crisis, low consumer confidence, and strained relations with the United States. Alarmingly, the urban unemployment rate among youth aged 16 to 24 sits at about 16 percent.
A recent survey conducted by the Beijing market research firm Fankink among Gen Z consumers revealed concerning trends in media consumption. James Li, Fankink’s president, highlighted that many young individuals now cite financial constraints as a reason for reduced cinema attendance—an admission that was rare before.
The firm’s findings also indicate a waning enthusiasm for cinema as an entertainment choice. “In our November tracker, ‘going to the theater to watch a movie’ ranked among the least frequent activities compared to engaging with other content forms like short videos, social media, and gaming,” noted Li. This suggests that moviegoers require strong motivation to choose theaters over other entertainment avenues.
Since the early February conclusion of the Chinese New Year holiday, the film market has not seen any major hits. Upcoming releases include Disney’s Snow White on March 21 and Warner Bros.’ Minecraft on April 4, alongside local films such as New Life on March 22 and We Girls on April 4.
In conclusion, while Ne Zha 2 stands as a testament to the potential of the Chinese film industry and a hopeful sign of recovery, analysts are cautious. “We need to see one of the forthcoming releases achieve similar success before we can confidently claim that the Chinese entertainment market is on the mend,” Li asserted.