Is China Lying About the Box-Office Numbers of Its Films?

The communist country is being audited after multiple reports on earnings have raised red flags, inside and outside the industry

by Tom Joyce | Updated 07 Nov 2017 at 9:05 AM

Chances are good you have never heard of the film “Wolf Warrior II.”

The Chinese production recently became the second-highest grossing film of all time in a single territory. It has reportedly grossed $853 million in communist China; that amount is only slightly behind the $936 million the record-holder, “Star Wars: The Force Awakens,” earned in the United States.

Such a report, however, has left many asking: Can these Chinese box-office numbers be trusted? After all, “Wolf Warrior II” only grossed $2.3 million in the U.S., and the original “Wolf Warrior,” released in 2015, reportedly earned $89.1 million at the Chinese box office in 2015. This means the country is implying the new film in the franchise reached unprecedented growth in an extremely short span of time.

This would not be the first or even second time the nation's been suspected of dishonesty about its movie earnings.

The State Administration of Press, Publication, Radio, Film and Television of the People's Republic of China (SAPPRFT) has been accused of shady practices before. A 2015 report in The Hollywood Reporter detailed various movie fans who were reporting they would buy a ticket to the American "Terminator Genisys," but receive a stub for the Chinese "The Hundred Regiments Offensive." Fans posted videos and pictures of being given the wrong tickets — and then of clerks' handwriting "Terminator Genisys" on the stub.

The report found that as much as $11 million could have been purposefully funneled from "Genisys" to "Regiments Offensive," the latter of which was considered by many critics to be state propaganda.

This appears to be a normal trend in the country. In early October, The Wall Street Journal reported on findings from PriceWaterhouseCoopers, the business consulting firm that recently audited the country's box-office reporting on behalf of the MPAA — which found Hollywood-produced movies' ticket sales were underreported by about 9 percent in China in 2016. Undercutting U.S. sales in their reports may have created the illusion that some of China's state-created films were more successful than they were in reality. They may have done so because the country is trying to aggressively expand its hold on the film industry across the globe.

Related: Why Tyler Perry Is Dominating at the Box Office While Others Struggle

In recent years, there's been an increased Chinese influence over the American film industry. In 2016, a Chinese conglomerate called Wanda Group purchased Legendary Entertainment, which produced "Jurassic World" and "The Dark Knight." The company's chairman, Chinese business magnate Wang Jianlin, also announced he would provide $750 million worth of incentives in a five-year span for Hollywood companies to film movies at a studio in Qingdao, China.

For many, China's growing influence in the Hollywood film world is concerning. Many, including Republican Rep. John Culberson (R-Texas), believe the influence over the industry could lead to new paths for the communist Eastern nation to inflict propaganda into American homes. Culberson recently called for an update to the Foreign Agents Registration Act of 1938, which restricted foreign propaganda (namely of Soviet and Nazi influence) to prevent China from pushing its authoritarian ideals in the United States.

As in any other situation, American businesses must be careful in their dealings with China. The communist nation could try to expand its role in the film industry in years to come as a means of increasing its overall global influence. In the meantime — American filmmakers should ready themselves for the added competition.

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