What does the success of Chinese film Wolf Warrior 2 mean for Hollywood?

Is record-breaking domestic success for the film a warning for underperforming Hollywood movies?

Wolf Warriors 2. Courtesy Well Go USA

You may not have heard of Wolf Warrior 2, but the Chinese action movie directed by and starring Wu Jing is smashing up records for fun at its domestic box office. It has sailed past the US$650 million mark after less than three weeks  from release to become the highest-grossing movie ever in China.  Its impressive haul also makes the movie the third-highest single-territory earner in the world, and there is still plenty of time to add to its total.

The appetite of Chinese audiences is showing no signs of waning for the film, which broke with tradition by grossing more on its second weekend than on its opening weekend. Its producers must surely have one eye on toppling at least one of the two movies above it on the global list, Avatar ($760m) and Star Wars: The Force Awakens ($937m), which set their single-territory records in North America.

This is clearly great news for the Chinese industry, and by association, could be taken as encouragement for any filmmaker struggling to survive outside the Hollywood bubble of franchises and sequels. For a Hollywood that has become increasingly reliant on using the Chinese box office as a kind of safety net to help underperforming movies over the break-even line, however, this could be very bad news indeed.

Hollywood budgets have spiralled to astronomical levels in recent years as directors try to outdo each other with ever grander sets and more eye-popping special effects. Even a supposedly indie film like Luc Besson's sci-fi Valerian can command a $200m spend, while budgets of $250-300m for a big studio action movie or superhero flick are not unusual. With about 1.4 billion pairs of eyeballs available to bolster a movie's box office earnings, it is no surprise that the Chinese market has become a key player.

This is further evidenced by the number of US-Chinese co-productions and partnerships in the industry – Michael Bay's recent Transformers: The Last Knight, for example, was funded by Paramount and Chinese companies Wanda Film, Huahua Media and Weying. And the $260m plus  the movie has taken so far at the Chinese box office, while still around $100m down on the previous instalment, is about half of the film's total worldwide gross and has essentially kept the $217m budget film in "disappointing performance" territory rather than the "outright global flop and huge losses" zone.

To look at a more modestly budgeted film, Resident Evil: The Final Chapter, made on a $40m budget, hardly set western box offices alight, taking an unimpressive $26.8m in the US. Thanks in large part to a $160m Chinese haul, however, the movie managed to collect $312m globally, making it one of the most profitable films of the year.

If China is increasingly producing the kind of movies domestically that audiences want to see, movies such as Wolf Warrior 2, however, surely it stands to reason there will be less room in Chinese cinemas for the sort of US films that need a lift from Chinese audiences to justify their existence.

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We should not, perhaps, read too much into Wolf Warrior 2's success – the film had limited competition as it was released during China's summer blackout, when priority is given to locally produced movies over imported fare. Furthermore, Warrior's producers called on plenty of Hollywood talent to help put their movie together, including Marvel stunt coordinator Sam Hargreave, Avengers and Captain America directors the Russo Brothers, who served as consultants, and even actor Frank Grillo (Zero Dark Thirty) in a leading role, suggesting the jobs are still there, even if they are in China.

The movie is not an isolated example, however. It took the domestic box office record from another Chinese film, 2016's The Mermaid, and even the mediocre-at-best, Jackie Chan-starring, Dubai-shot Kung Fu Yoga managed to clear the $250M mark.

The film's success also comes at a time when China is increasingly asserting its independence, and the media sector is no exception. At the same time as Wolf Warrior 2 was riding high at the box office, the Hong Kong government announced that the BBC's World Service would cease its 24-hour broadcasting to the island and be replaced by a Chinese state channel.  In digital media, Chinese versions of popular western sites such as Baidu (Google) and Weibo (Twitter) already rule the local market.

It may still be some time before China can successfully turn out movies of Hollywood quality on a weekly basis, but clearly the winds of change are blowing. Hollywood may want to stop seeing China as a cash cow for struggling releases and step up its game, because its Chinese competitors already have.