Could China’s Public Health Crisis Lead to a Global Economic Crisis?

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With more than 1,300 dead and approximately 60,000 infected, the coronavirus has left China amid a public health crisis. The virus has led businesses across the country to close their doors, affecting China’s domestic economy as well as the global economy. A recent article by CNN spotlights one of the industries most affected by the crisis, the entertainment industry, mainly focusing on the Hollywood film industry.

Disney’s long-awaited release of its live-action remake of Mulan is set to hit theaters in North America on March 27th. Mulan tells the story of a female Chinese warrior, fighting to protect her country from invaders. Disney invested over $200 million in the remake, expecting it to be wildly successful among Chinese box offices. China is the second-largest movie market in the world, the United States taking the top spot. Disney anticipated that the release of Mulan would break records across China. The success of the film now depends on how the country recovers from this crisis and how quickly businesses across the country can operate as usual. Given the fact China is the second-largest movie market in the world, a large portion of ticket sales depends on Chinese box offices. A film cannot gross millions or even billions worldwide without help from Chinese moviegoers. Although Mulan could still perform well on a global scale, with China out of the equation, for now, its success is limited.  

Although the crisis in China has raised concerns among countless studios set to release films in China, the case of Mulan is different. Disney created Mulan to be a “tailor-made success in China.” This is likely due to the fact the storyline of Mulan has “significant roots in Chinese lore.” This factor has made China a crucial player in the film’s release strategy and subsequent success following release. Alongside, Disney has built extensive infrastructure across China in recent years through theme parks and merchandising. Disney was hoping for significant pay off with the release of Mulan. The film features an international cast and revised storyline, making it more “straightforward” than the original animated version of the film. Given the cultural relevance and family-friendly nature of the film, Disney was expecting massive success, as family films are among the most successful films among Chinese audiences. Just last year, China contributed over $9 million to international box office sales. This continued disruption across the Chinese film market has the potential to affect studios beyond just Disney alone. Studios must now consider how to achieve success in releases with China out of the equation.

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