*

China restricts Hollywood imports in response to US

tariffs

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Hollywood's share in China's box office drops to 5%

*

Domestic films dominate China's box office, accounting for

80%

of revenue

(Adds Trump comment paragraph 9)

BEIJING, April 10 (Reuters) - China said on Thursday it

would immediately restrict imports of Hollywood films in

retaliation for President Donald Trump's escalation of U.S.

tariffs on imported Chinese goods, targeting one of the most

high-profile American exports.

Industry analysts said the financial impact was likely to be

minimal, however, because Hollywood's box office returns in

China have declined significantly in recent years.

After three decades during which China imported 10 Hollywood

movies per year, Beijing's National Film Administration said

Trump's tariff actions would further sour domestic demand for

U.S. cinema in China.

"We will follow market rules, respect the audience's

choices, and moderately reduce the number of American films

imported," the NFA said on its website.

Hollywood studios once looked to China, the world's

second-largest film market, to help boost box office performance

of movies. But domestic movies increasingly have outperformed

Hollywood's fare in China, with "Ne Zha 2" this year eclipsing

Pixar's "Inside Out 2" to become the highest-grossing animated

film of all time.

Chris Fenton, author of "Feeding the Dragon: Inside the

Trillion Dollar Dilemma Facing Hollywood, the NBA, and American

Business," said limiting U.S.-made films was a "super

high-profile way to make a statement of retaliation with almost

zero downside for China."

Hollywood films account for only 5% of overall box office

receipts in China's market. And Hollywood studios receive only

25% of ticket sales in China, compared with double that in other

markets, Fenton said.

"Such a high-profile punishment of Hollywood is an all-win

motion of strength by Beijing that will surely be noticed by

Washington," Fenton added.

Trump did not jump to Hollywood's defense. "I think I've

heard of worse things," the president said when asked about

China's restrictions.

Many Hollywood celebrities supported Trump's Democratic

opponent in last year's election.

One entertainment industry source predicted that big

Hollywood blockbusters, which continue to attract moviegoers in

China, may still reach the big screen. Walt Disney's ( DIS )

Marvel superhero movie "Thunderbolts," which kicks off the

summer blockbuster season, recently received permission to debut

in China on April 30.

It was not clear if China would approve the entry of other

major releases this summer, such as Paramount's

"Mission Impossible - The Final Reckoning," which may mark Tom

Cruise's last appearance in the long-running franchise, Warner

Bros' new "Superman" movie from "Guardians of the

Galaxy" filmmaker James Gunn, and Marvel's new take on "The

Fantastic Four."

LIMITED IMPACT

IMAX ( IMAX ) said it expects the slate for its large-format

screens, which includes Hollywood, Chinese and international

films, would not be materially impacted by the restrictions.

"We continue to expect a strong year for IMAX ( IMAX ) in China,

coming off our highest-grossing first quarter ever in the

country," an IMAX ( IMAX ) spokesperson said in a statement to Reuters.

Seth Shafer, principal analyst at S&P Global Market

Intelligence Kagan, predicted the restrictions would have

limited impact.

"Only roughly 25% of domestic wide-release films are now

released in China and that percentage has dropped steadily over

time due to increasing competition from China's local film

production industry," Shafer said. "For domestic films that do

get a release in China, typically less than 10% of the film's

global gross box office revenue comes from China."

"Captain America: Brave New World", a Marvel film released

in February, took in $14.4 million in China out of its $413

million in global receipts.

In the past, imports including "Titanic" and "Avatar" became

box office smashes in the Chinese market, making actors such as

Leonardo DiCaprio and directors such as James Cameron household

names among Chinese film lovers across generations.

Since 2020, Chinese-made films have consistently accounted

for around 80% of annual box office revenue, up from around 60%

previously.

On China's all-time box office list, only one imported film

ranks in the top 20 - "Avengers: Endgame," with revenue of 4.25

billion yuan ($579.83 million). The remaining films in the top

20 are all domestic productions.

($1 = 7.3297 Chinese yuan renminbi)