In the first half of 2025, the China's film market achieved a box office revenue of 4.07 billion dollars, up 22.91% from the same period in 2024. The market growth was driven by the strong performance of domestic films, especially Ne Zha 2, which achieved a global box office of 2.22 billion dollars, ranking first in the global box office in H1 2025. Ne Zha 2 also took the top spot in the Chinese box office, ranking fifth in the global box office history and first in the global animation film box office history.

It is worth noting that Ne Zha 2 contributed 54.39% of the total box office in H1 2025, exacerbates the Matthew Effect in the market. Excessive reliance on Spring Festival movie schedule and blockbuster films has posed challenges to the stability of the market. Although China's film market is large in scale, the uneven market distribution increases investment risk. While maintaining overall optimism, industry players should be more cautious in project investment choices.

According to data from China Film Administration, in H1 2025, 1,076 feature films, 55 animated films, 61 documentaries, 65 educational and scientific films, 14 special films and 26 virtual reality films were registered and approved. The film genres are diverse, and the top 10 highest-grossing films cover a wide range of genres, including animation, comedy, suspense, fantasy, martial arts, crime, youth romance, biography, war and action. Sequel films have become the most popular type due to their stable quality and accumulated audience. Ne Zha 2, Detective Chinatown 1900, which is the fourth film in the Detective Chinatown film series, Creation of The Gods II: Demon Force, Boonie Bears: Future Reborn, which is the 11th film in the Boonie Bears animated film series and Octopus with Broken Arms(Sheep Without a Shepherd 3), the third film in the Sheep Without a Shepherd film series ranked among the top six in the box office in the first half of the year.

Infrastructure & talent: According to the market performance in H1 2025, private companies such as Enlight Media, Wanda Pictures, Ruyi Films and Fantawild, state-owned film companies China Film Co., Ltd and Huaxia Film Distribution Co., Ltd., as well as internet platform-based film companies Maoyan Entertainment and Damai Entertainment Holdings Limited are the major film studios in China film market. Important independent film studios include animation film studios such as Coco Bean Animation and Free Realm, comedy film studios Happy Film Industry Co., Ltd and Mahua FunAge, suspense film studios Yitong Legend and fantasy film production studio Mongke Tengri Pictures. Different filmmakers have their own specialties in film genres. For example, directors Jokelate and Lin Yongchang specialize in animation film. Chen Sicheng, Dai Mo and Gan Jianyu do well in crime thriller film. Director Wu ershan is good at fantasy films. And Comedy films featuring Shen Teng, Ma Li, Huang Bo, Wang Baoqiang, Yi Xiaoxing are very popular among audiences. Hong Kong directors such as Hark Tsui, Andrew Lau and Dante Lam are also important creative forces in Chinese cinema, contributing unique styles to the development of Chinese-language films. Female directors including Yang Lina and Wen Yan, as well as young actors such as Jackson Yee, Liu Haoran, Zhao Liying, Xiao Zhan, Yu Shi and Xiao Yang, have performed brightly. Chinese VFX companies such as More VFX, Phenom Films and Base Media, Source VFX and Kernel have participated in the production of numerous high-budget films, and their works have proven that Chinese VFX has reached world-class standards.

Both the central and local governments have different degrees of incentives and grants for major themes and young directors' creations. Chinese filmmakers are facing crises such as sluggish market consumption, cash flow shortages, financing difficulties and a reduction in the number of projects started, while the application of virtual and artificial intelligence technology has brought new opportunities for reducing costs and increasing efficiency in film production.

Co-productions and studio-funded investments are the main financing strategies for films. Major studios include China Film Co., Ltd., Enlight Media, Wanda Pictures, Ruyi Films, Maoyan Entertainment, Damai Entertainment Holdings Limited, Hengdian Entertainment and Huaxia Film Distribution Co., Ltd. Among them, internet companies represented by Maoyan Entertainment, Tao Piao Piao and Damai Entertainment Holdings Limited have invested in many popular film projects relying on their strong capital strength and online distribution and marketing resources. The main financing methods for independent films are self-financed, public grants, and studio-funded investments.

Hard money: Private equity in China's film industry mainly invests film companies, film projects and crowdfunding on internet platforms. In 2025, private equity financing was limited, with capital showing reduced enthusiasm in film industry. The film industry relied on its own funds to support production. Streaming platforms and international capital accounted for a small proportion of the market. In May, the state issued the Regulations on the Administration of Hong Kong and Macao Service Providers' Investment in Film Production Business, which explicitly encourages Hong Kong and Macao capital to participate in mainland film production.

Soft money： Central and regional governments offer funding and support programs for film projects. China Film Administration provides funding for film projects on important themes, projects by young directors and those using virtual reality technology. Regional government also provide varying levels of supportive policies for film projects. In H1 2025, many regional have introduced supportive policies for film production, including Jiangxi Province, Shandong Province, Guangdong Province, Chongqing Municipality and Xiamen City, with individual film projects eligible for up to 1.39 million dollars in supportive funds. And Hunan Province, Shanghai Municipality, Jiangsu Province, Guangdong Province and Chengdu City launched supportive plans for excellent scripts to attract film productions in their localities. Venture capital initiatives by film festivals and industry associations also serve as financing channels for independent films. In H1 2025, initiatives, such as the China (Chengdu) Film Excellence Promotion and Support Program, China (Shenyang) Comedy Film Week, Golden Rooster Films Project Marker, Hainan Island International Film Festival Talents， China Film Directors' Guild Young Director Support Program， Xie Jin Youth Film Support Program and so on, provided funding of up to 500,000 yuan per project for planned film projects. Affected by the shrinkage of China's film market in 2024, investment in film projects in H1 2025 became more cautious. Except for top projects, it has become more difficult for independent film to obtain financing.

In the first half of 2025, a total of 15 companies including Enlight Media, China Film Co., Ltd., Wanda Pictures, Maoyan Entertainment, Tao Piao Piao, Lianrui Pictures and Hengdian Entertainment distributed the top 10 domestic films at the box office. Enlight Media, China Film Co., Ltd., Yitong Legend, Fantawild, CMC Pictures and Bona Film Group are companies integrating production and distribution. Maoyan Entertainment and Tao Piao Piao mainly focus on online distribution and marketing due to their e-commerce ticketing platform, while Lianrui Pictures and Wuzhou Films are professional distributors.

In H1 2025, the domestic film market share reached 91.2%. In order to enrich market supply, China has adopted a more lenient strategy for importing foreign films, with more abundant numbers and types of imported films. However, American film’s performance is not as good as it was before, while Japanese films become popular. China has not yet opened up foreign investment access in the distribution sector, and only state-owned film distribution companies China Film Co., Ltd. and Huaxia Film Distribution Co., Ltd. have the qualification to distribute imported films. Other companies can freely bring in imported films, such as Joy pictures Co., Ltd and Facewhite, which import Japanese films.

China Film Co., Ltd. is the largest integrated film studio integrating production, distribution and exhibition. Ruyi Pictures, which owns China's largest cinema chain - Wanda, is also a representative of vertical integration. In addition, Hengdian Entertainment, Bona Film Group and Huaxia Film Distribution Co., Ltd. have cinema chains. However, this does not mean that the vertical integration of enterprises affects the allocation of screening resources, nor does it mean that a monopoly pattern has been formed in film market. As one of China’s largest film companies, Enlight Media is also involved in the film exhibition segment. Internet giants such as Damai Entertainment Holdings Limited, Maoyan Entertainment and Tao Piao Piao have not been involved in exhibition too.

The distribution of Hollywood blockbusters in China is exclusively handled by China Film Group and Huaxia Film Distribution Co., Ltd. Meanwhile, the "Big Five" studios have established branches in China to support film’s distribution and marketing, and they also opt to collaborate with local Chinese marketing companies. After obtaining permission from China Film Group and Huaxia Film Distribution Co., Ltd., other distributors may introduce imported films by means of "assisted promotion".

In H1 2025, the number of cinemas in China maintained growth, with 546 new cinemas opened, the total number of operating cinemas exceeding 13,000, and the total number of screens surpassing 90,000. China has built a global-leading cinema projection system that boasts large scale and extensive coverage. Except for a very few cinemas that retain single screen due to historical reasons, all others are multiplex cinemas. Township cinemas between cities and rural areas are also under construction. Different from other national markets, China implements government-funded public welfare exhibition in rural areas.

The average ticket price in H1 2025 was 6.35 dollars, an increase of 0.31 dollar year-on-year. The increase was affected by the high-ticket prices of high-tech specification theaters driven by the hit of Ne Zha2. But the increase in ticket prices did not affect the number of attendances, which reached 641 million in H1 2025, an increase of 16.89% year-on-year.

Audiences' passion for cinema viewing has not been affected by streaming media. In particular, the huge success of Ne Zha2 has proven that high-quality films worth watching in cinemas are the primary factor driving audiences back to cinemas. Meanwhile, it is noteworthy that the contraction of China’s consumer market has affected movie-going spending, leading to a decline in regular cinema attendance. Additionally, the issue of an "aging" audience is emerging: the proportion of young people under 25 has dropped to less than 20%, while the proportion of female audiences has reached as high as 60%.

High-specification screening equipment and new cultural and tourism scenes can enhance the attractiveness of cinemas. Guiyang Yuejie Cinema, with Asia's largest IMAX-GT hall, became the national single cinema box office champion in H1 2025 with a box office of 3.96 million dollars. Virtual reality (VR) films, which offer brand-new audio-visual experiences for moviegoers, have received strong government support and been formally incorporated into the regulatory system. Cinemas in Shanghai, Chengdu and other places are actively carrying out "VR cinema cluster" transformation or trying to start "third-generation cinema" transformation.

China's film technology is in a period of transformation from "following" to "running side by side" and "leading". The state attaches great importance to empowering the upgrading of the film industry with scientific and technological innovation. Technologies such as virtual digital filming, cloud computing, cloud storage, artificial intelligence, and 5G collaborative production have demonstrated outstanding performance in "cost reduction and efficiency improvement" for film projects. Companies such as Western Movie Group, China Film Co., Ltd.'s Artificial Intelligence Research Institute, The Elephant Yuan Platform created by Henan Broadcasting and Television Station and Beijing 798 ArtDist are at the forefront of content, software and hardware, and industrial ecosystem construction. Among these technologies, artificial intelligence (AI) has been fully integrated into the entire workflow of the film industry chain. iQIYI launched the AI script tool Script Workshop and the AI platform Video Workshop for video content creation platform; Tencent established an AI film and television expression studio to improve creation efficiency; China's independently developed film and television robotic arm integrates AI background generation and the ability to complete complex camera movements; Zhang Yimou's new film uses the Leopard film production vehicle to realize the pre-positioning of post-production work, saving one month of production time.

China's top visual effects companies such as More VFX, Phenom Films, Base Media, Source VFX and Kernel, as well as many studios such as Cinemorph SFX and Manas Workshop, completed the post-production of The Wandering Earth, Creation of the Gods and Ne Zha series.

Due to China's restrictions on the entry of foreign streaming platforms, Tencent Video, iQIYI and Youku are the three dominant players. In Q2 of 2025, Tencent Video had 114 million paid members, a year-on-year decrease of 2.56%. iQIYI and Youku did not disclose data, but it is estimated that each has about 102 million members. The total number of subscribed users of the three platforms is about 318 million, a year-on-year increase of 2.6%, and the growth rate is slower than in previous years.

Box office receipts are the main source of income for movies. Although films can obtain copyright income from streaming platforms, this income accounts for a low proportion. It is worth noting that online movies are film content customized for streaming platforms, and their profits almost entirely depend on streaming platforms. However, since 2023, the online film industry has been significantly impacted by micro-shorts, and the industry has shrunk rapidly.

The explosive growth of micro-shorts has made streaming platforms begin to tilt resources towards short plays. Short dramas have become an important means for platforms to maintain growth. In 2025, iQIYI launched 28 high-quality micro-dramas, driving the number of heavy users of micro-short dramas on the platform to triple within half a year; Tencent Video had 24 short plays with box office revenue exceeding one million yuan. Leading platforms such as Tencent Video, iQIYI, Youku and Mango TV achieved overall profitability in the first quarter of 2025.

In February, the government issued the Notice on Further Coordinating Development and Security to Promote the Healthy and Prosperous Development of Online Micro-Short Drama Industry to standardize and refine the review and supervision of micro-short dramas.

China's Film Industry Promotion Law of the People’s Republic of China encourages international co-production of films but does not specify particular funding subsidy measures. Local governments such as Shenzhen and Guangdong have subsidies for some co-production projects.

After the pandemic, the number of international collaborations has decreased. In H1 2025, according to official data, 19 Chinese-foreign co-productions were registered and approved. They were mainly between the Chinese mainland and Hong Kong, Taiwan. In addition, there is 1 co-production with the United States, Belarus, New Zealand, Spain and Uzbekistan respectively.

In April and May, China Film Administration signed film cooperation documents with the Spanish Film and Audiovisual Arts Bureau and the Russian Ministry of Culture respectively, aiming to promote film co-production and international exchanges between the two countries. Additionally, the Consulate General of Italy in Shanghai and the Shanghai Art Film Alliance launched the "Cina-Italia Nuovi Registi Emergenti" and signed the Memorandum of Cooperation on Sino-Italian: New Directors Project. China maintains a positive attitude both towards foreign entities coming to China for film shooting and towards foreign parties seeking international cooperation.