A still from "Alien: Romulus." [Photo courtesy of 20th Century Studios]

Hollywood blockbusters have long dominated the Chinese box office since entering the market three decades ago. In recent years, however, they have lost some appeal among Chinese moviegoers, who make up the largest movie market outside the United States.

Experts believe that a major factor behind this decline is a lack of novelty and creativity in Hollywood movies with their formulaic storylines having satiated Chinese audiences. Meanwhile, China's rapidly growing domestic movie industry has captured audience interest and loyalty by producing more diverse and culturally resonant stories.

Fading appeal

Hollywood's love affair with China dates back to 1994 when the first imported U.S. blockbuster "The Fugitive" hit Chinese cinema screens.

For many years, movies like "True Lies," "Titanic," and "Transformers" dominated the Chinese box office, with Hollywood movies once occupying half of the top spots. At its peak, "Avengers: Endgame" grossed over 4.2 billion yuan (some 592 million U.S. dollars) in 2019, setting the highest box office record for Hollywood movies in China.

In 2012, seven of the 10 highest-grossing movies in China were U.S.-made, according to Maoyan, a Chinese movie-ticketing and data platform.

However, things have changed. The same platform showed that in 2023, no American movies ranked among the 10 highest grossing in China despite highly anticipated sequels in the "Mission: Impossible," "Fast & Furious" and "Spider-Man" franchises. As of 2024, only "Godzilla x Kong: The New Empire" has made it into the top ten, ranking eighth.

Following the disruption of the global movie industry by the COVID-19 pandemic, Hollywood movies have made a strong comeback, yet they have significantly underperformed in their return to Chinese theaters.

"I don't think we're gonna ever go back to those earlier days," Stanely Rosen, a professor of political science at the University of Southern California, told KNX-FM, a commercial radio station in Los Angeles, California.

"Even films that were surefire tremendous hits, like Avatar, Fast and Furious when they played in China in 2023, they still did relatively well, but the numbers were way down," he said.

Chinese audiences are tired of repetitive Hollywood storylines, Ying Zhu, an expert in Chinese movie and television and author of "Hollywood in China," told CNBC.

For years, Hollywood has relied on formulaic plotlines and established IPs to secure box office revenue and sustain its appeal among fans, an approach frequently criticized for lacking originality and creativity.

"Chinese audiences have seemingly moved on from American franchises and Tom Cruise-style individualism," said Variety, a top Hollywood trade publication.

China's growing movie industry

Another major reason for Hollywood's declining appeal is the intense competition from the rapid development of China's domestic movie industry.

"The waning power of Hollywood's franchises is not a problem unique to China. But the scale and proficiency of the local competition is," Variety said.

If The Fugitive in 1994 triggered a "catalyst effect," prompting China's movie industry to embark on rapid industrialization, then after 30 years of development, the Chinese movie industry has made significant progress in both script and production.

"China learned all they could from Hollywood. Now they make their own big-budget blockbuster films with good special effects, and even good animated films ... They don't need Hollywood anymore," Rosen, who specializes in Chinese politics, society, and movie, told CNBC.

"The gap is narrower," Rosen said, the Chinese domestic films are "beating Hollywood at its own game."

In recent years, genres like animation, action, sci-fi and comedy have flourished, leading to box office successes such as "Ne Zha," "The Battle at Lake Changjin," "Wolf Warrior," "The Wandering Earth" and "Hi, Mom."

China's top-grossing movie of all time is 2021's "The Battle at Lake Changjin," which is set during the War to Resist U.S. Aggression and Aid Korea (1950-1953). It grossed a record-breaking 5.77 billion yuan (812 million dollars), according to data by Maoyan.

Other mainstream movies that feature patriotism have also been popular among the Chinese audience in recent years.

"Also, the recent rise of crime/suspense dramas feature unpredictable and clever storytelling that keep the audience guessing and interested. Story endings are hard to predict, sometimes a surprise, and become hot topics for people to discuss. Hollywood sequels have become predictable from beginning to the end," Artisan Gateway principal Rance Pow was quoted as saying by Variety.

Open mindset to cultural diversity

The U.S. magazine National Review said as China has built up a movie industry of its own sufficient to cater to domestic demand, cultural differences are beginning to matter more.

Many American studios once viewed China as a market where they could always make money, Shi Chuan, vice chairman of the Shanghai Film Association, told The New York Times. "Now I am telling American film companies that this mentality is no longer viable. You must study deeply to understand the Chinese market, Chinese audiences and Chinese pop culture."

Chinese movies, such as the recently released domestic comedy "Successor" which explores themes of child-raising, education, and upward mobility in contemporary Chinese families, have "a major home-field advantage," according to CNBC.

"Many popular local films are adapted from true stories or from ordinary people's lives, relatable to real life," Pow said.

"The Chinese audience, mostly young people, want stories they can resonate with ... films that relate to things happening in China in one way or another," Rosen said.

Although Hollywood movies have not been top grossers in the Chinese market in recent years, Chinese audiences have maintained a fairly strong interest in them, and continue to engage with and enjoy these movies.

Experts have said a healthy movie market thrives on diversity and openness, and the flourishing Chinese movie market is closely linked to the success of imported movies.

During the 26th Shanghai International Film Festival held in June, Chinese director Jia Zhangke said, "When so many movies from around the world can be timely introduced into a certain region, it actually enhances that region's cultural influence."

"I believe we should maintain an open mindset and work towards establishing a compelling and influential image of Chinese movies, thereby solidifying our cultural standing," he added.