"Pre-Covid, everybody thought the Chinese box office was going to be the savior of Hollywood," one international executive said. "Post-Covid, that has all changed."

Actor Zoe Saldaña attends the China premiere of "Avatar: Fire and Ash" on Dec. 8 in Sanya, Hainan province of China. VCG / VCG via Getty Images

When director James Cameron landed in China earlier this month for the Hainan Island International Film Festival in Sanya, it was a homecoming of sorts.

"Avatar," the first film in Cameron`s science fiction fantasy series, and the Chinese box office essentially grew up together. In 2009, "Avatar" grossed more than $200 million of its $2.92 billion in China, at a time when the country had fewer than 5,000 movie screens and was just beginning to invest in modernizing its local film industry.

Now, China has more than 80,000 movie screens, twice as many as there are in the U.S., and Chinese movie theaters are a lot less likely to be showing Hollywood films than they used to be.

"When the first ‘Avatar` movie came out, Hollywood was the only game in town," said Chris Fenton, a media executive and producer who authored a book on Hollywood and China called "Feeding the Dragon." "But since then, China has gotten as good as us at telling world-class stories for their own people. And now they`ve largely shut us out of that market."

But Disney, which enjoyed a rare recent success there with the rollout of "Zootopia 2" last month, is hoping for another box-office win in China with "Avatar: Fire and Ash," which opened Friday. And competing Hollywood studios will be watching to see if Disney manages to entice Chinese "Avatar" fans back to theaters.

"Chinese audiences have a deep love for ‘Avatar,`" IMAX China CEO Daniel Manwaring said. "The question will be, does that story still resonate?"

Director James Cameron and Zoe Saldaña celebrate Avatar: Fire and Ash with the local cast in China.

Experience the film in theatres in 10 days. Get tickets now: https://t.co/gSGJpeDyXY pic.twitter.com/7HaCfQoLR3

— Avatar (@officialavatar) December 9, 2025

In 2012, seven of the 10 highest-grossing movies in China were U.S.-made. In 2024, none were. For American movie studios, which spent much of the 2010s counting on ever increasing Chinese box-office grosses, the region has largely become an afterthought.

"Pre-Covid, everybody thought the Chinese box office was going to be the savior of Hollywood," said one international executive, who requested anonymity because he was not authorized to speak on the record. "Post-Covid, that has all changed."

In the decade before the pandemic, Chinese moviegoers flocked to American franchises like Universal`s "Fast & Furious" and Paramount`s "Transformers," and Hollywood studios began making script and casting decisions with Chinese audiences and government officials in mind. The Chinese government sets quotas for foreign films, and its censors ban content sensitive to Chinese history and politics.

Disney changed the ethnicity and backstory of the Mandarin, the villain in Marvel`s 2013 film "Iron Man 3," to make him less offensive to Chinese audiences, and added extra scenes for the Chinese release featuring Chinese actors. 20th Century Fox included prominent product placement for the Chinese messaging service QQ and a meaty role for Chinese actor Angelababy in 2016`s "Independence Day: Resurgence."

At the same time that Hollywood studios were adjusting to Chinese preferences, local Chinese production was growing in size and sophistication, and the country began making its own spectacle-driven blockbusters, movies like the 2016 fantasy comedy "The Mermaid" and the 2019 animated epic "Ne Zha."

When Covid and the Hollywood actors and writers strikes slowed U.S. production between 2020 and 2023, American movie studios had fewer potential blockbusters to offer China.

"You didn`t have that regular cadence of Hollywood movies," the international executive said. "Local producers stepped in and filled the void. And Chinese movies got better."

Avatar: Fire and Ash | New Trailer

The highest-grossing movie in China this year is "Ne Zha 2," which has made more than $2 billion, breaking all Chinese box-office records. In a sign of the power of the massive Chinese marketplace, "Ne Zha 2" is now the world`s highest-grossing animated movie of all time, surpassing Pixar`s "Inside Out 2" almost entirely driven by its mainland China box office.

"Avatar: Fire and Ash" is expected to open at $340 million-$380 million globally, and if it follows the pattern of previous "Avatar" films, it will continue earning in theaters for several weeks, potentially reaching the $2 billion threshold of the previous films.

With North American moviegoing waning, "Fire and Ash" will need a robust turnout in China to get there. The second "Avatar" movie, 2022`s "The Way of Water," grossed $247 million over the course of its run in China, as one of the first Hollywood movies to screen post-pandemic, and "Fire and Ash" is expected to play similarly.

Disney has more reason to be optimistic after "Zootopia 2," which has grossed more than $500 million in China since it opened in November, the most of any American film since the pandemic.

The original, 2016 "Zootopia" movie was a phenomenon in China, in part because of a storyline that saw its talking animal characters dealing with the challenges of moving from the country to the city just as a generation of Chinese moviegoers were grappling with a similar transition. Shanghai Disneyland has a popular "Zootopia" attraction, and the studio launched an aggressive marketing campaign for the sequel, including a branding deal with Starbucks with themed drinks and mugs.

Amid the success of "Zootopia 2," IMAX`s Manwaring said he believes Hollywood studios can recapture some of the massive Chinese moviegoing marketplace. They`ll just have to make a few changes if they want to compete.

"There is still a role for Hollywood in China," Manwaring said. "People show up. The ceiling is still so high. But the requirements for a good movie have gotten higher."

At the film festival, Cameron walked the red carpet with actor Zoe Saldaña and other stars from the film. When addressing the audience, he credited "Avatar`s" "passionate" Chinese fan base for helping "open the floodgates to all the wonderful filmmakers" who make fantasy and science fiction movies.

"The fans of ‘Avatar` in China have been phenomenally supportive and passionate," he said, adding that "all this is made possible by the enthusiasm here in China, not only for films, but a certain type of big films, splendor, emotion, 3D, very important for me, anyway."

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By Rebecca Keegan