Stimulating Domestic Demand through Cinema

Facing economic headwinds intensified by ongoing trade disputes, especially with the United States, the Chinese government is strategically leveraging its film industry to stimulate domestic consumption. This initiative aims to boost spending and invigorate the economy through a nationwide campaign focused on “Chinese film consumption.”

A Billion Yuan Investment in Movie Magic

Spearheaded by the China Media group (CMG), which includes the Chinese National Film bureau and CCTV, the “Year of Chinese Film Consumption” officially launched on April 18th with a series of promotional events and discounts. Key financial institutions, including the China Industrial Bank, China Construction Bank, and UnionPay, alongside popular movie ticketing platforms like Maoyan and taopiaopiao, are participating in this endeavor. These entities have pledged to provide at least 1 billion yuan (approximately $138 million USD) in movie support subsidies.

This initiative underscores the government’s commitment to bolstering domestic demand through targeted cultural initiatives.
China Media Group Press Release

These subsidies will primarily target peak seasons, such as summer and national holidays, offering discounted tickets to attract larger audiences. This strategic timing aims to maximize the impact of the subsidies on overall box office revenue and consumer spending.

Weekend Cinema and Credit Card Perks

Beyond direct subsidies, authorities and related companies are introducing initiatives like “Watch Together on the Weekend” events to encourage communal viewing experiences. Furthermore, a new credit card offering various benefits for movie bookings is set to launch, incentivizing frequent cinema visits.

Film Industry as Economic Barometer

In China, the performance of the film industry is closely monitored as a key indicator of the overall health of the domestic economy. the government has previously employed similar tactics, such as providing movie ticket purchase subsidies during the Spring Festival, to stimulate theater attendance and boost consumer confidence.

This year, China has set an ambitious economic growth target of around 5%, prioritizing domestic demand as a crucial driver. The urgency to achieve this goal has been amplified by renewed trade tensions with the U.S., making initiatives like the film consumption campaign even more critical.

Increased fiscal Expenditure Reflects Economic Priorities

The focus on stimulating domestic demand is also reflected in China’s increased fiscal expenditure. According to a recent report by Bloomberg News, China’s combined general public budget and government fund accounts reached 9.26 trillion yuan (approximately $1.28 trillion USD) in the first quarter of 2025.

This represents a 5.6% increase compared to the same period last year, marking the highest growth rate in the last three years for the first quarter. This surge in spending underscores the government’s commitment to supporting economic growth through various channels.

Moreover, at the recent National People’s Congress and the People’s Political Consultative Conference, China decided to set a budget deficit target of 3% of GDP, signaling a willingness to increase government spending to support economic activity.