A leading figure in China's film industry is urging measures to sustain the country's film market, which saw a major boost during the Spring Festival season with the unprecedented success of "Ne Zha 2."

Fu Ruoqing, chairman of China Film Group and a member of the 14th National Committee of the Chinese People's Political Consultative Conference (CPPCC). [Photo provided to China.org.cn]

"Movies, as cultural products with strong public appeal, possess significant cultural influence and market-driving power. Film consumption is seen as a barometer of the economy," said Fu Ruoqing, chairman of China Film Group and China Film Co., Ltd, noting that the strong performance in the Chinese film market this year reflects the vitality of the country's economy.

Fu is a member of the 14th National Committee of the Chinese People's Political Consultative Conference (CPPCC). He made the comments while attending the third session of the 14th National Committee of the CPPCC, China's top political advisory body, which concludes on March 10.

Films have grossed more than 23.4 billion yuan ($3.2 billion) in the Chinese market so far this year, with "Ne Zha 2" contributing 14.6 billion yuan. The film is now the highest-grossing Chinese film in history, the top-grossing animated film globally, and the seventh highest-grossing film of all time. It has already attracted 300 million viewers in China and is expanding into international markets, generating widespread attention — even during the CPPCC session.

Fu highlighted persistent challenges in China's film market, including uneven development and structural imbalances between supply and demand. While this year's Spring Festival season saw average occupancy rates exceeding 40%, the 2024 national average was just 5.8%, with even lower attendance in off-peak periods and smaller cities. Movie releases remain unevenly distributed across different periods.

Additionally, uniform cinema offerings and limited consumption models are stifling market growth. Currently, 90% of China's film market revenue comes from box office sales, while merchandise contributes less than 10%, trailing behind more developed markets. A lack of business model innovation further undermines the industry's resilience to risk.

"A thriving film market cannot rely solely on a booming Spring Festival season and a few blockbusters," Fu said. "To fully unlock film consumption potential, we must drive systematic policy innovations and foster a healthier, more prosperous film ecosystem."

In a proposal to the 14th CPPCC National Committee, Fu called for stronger policy guidance to boost film consumption. "With a comprehensive policy toolkit, we should further increase support for film consumption by transforming subsidies into modulators of the consumption ecosystem."

Fu proposed a screen upgrade plan that includes offering replacement subsidies or financial interest discounts to cinemas upgrading to high-format screening equipment with independent Chinese intellectual property rights. He noted that better projection equipment could enhance viewing experiences and drive film consumption.

He emphasized that high-quality content is key to attracting cinema audiences and proposed enriching content supply and improving supply-demand alignment by deepening distribution reforms, promoting differentiated screenings, and introducing reservation-based models for greater audience choice. Fu also encouraged re-releasing classic films and hosting thematic screenings to cultivate niche markets.

The film executive highlighted the need to explore diverse consumption scenarios and business models. Fu suggested transforming cinemas into multi-functional cultural venues by hosting live broadcasts of sports events and performances.

Fu also noted the surge in merchandise sales from "The Wandering Earth" and "Ne Zha" franchises, which generated significant value beyond box office revenue. He suggested leveraging films' diverse potential through preferential policies, such as tax rebates for high-earning derivative and cultural tourism projects. Additionally, he advocated for integrating film with other industries to create rich, interactive cultural experiences.