Walt Disney’s Avatar: The Way of Water , a sequel to the 2009 hit movie, was cleared by Chinese regulators for a December 16 release date, according to people familiar with the matter. The decision raises the earnings potential for one of Disney’s biggest films of the year, after previous blockbusters were denied entry into China as relations between the Asian nation and the US deteriorated. The impact has rippled through some of Hollywood’s top studios, as box office earnings of some American titles in China could exceed revenue earned back at home. Zero-Covid policy closes gates at Shanghai Disney for second time this year The Avatar sequel is one of the few major tent-pole films to be granted access to the world’s largest movie market since the beginning of the pandemic, with recent Marvel blockbusters shut out. Disney had screened footage for executives of China Film Group earlier this year, raising prospects for a release in the country. 20th Century Pictures confirmed the release in a Weibo post. Earlier this year, China gave a rare hint as to why US films had found it difficult to get approval for local showings, when a senior official called for filmmakers to show more cultural respect. Only 28 American films were released in China last year, accounting for 12 per cent of the country’s overall box office revenue, according to ticketing platform Maoyan Entertainment. That compares with more than 50 titles in 2019 that saw Hollywood win a 32 per cent market share. What to know about Avatar: The Way of Water, releasing in December 2022 The approval for the new Avatar film follows recent efforts by Chinese President Xi Jinping to thaw diplomatic chills , including his first in-person summit with US President Joe Biden. The US said the two sides would resume cooperation on climate change and food security issues, and that Biden and Xi jointly chastised the Kremlin for loose talk of nuclear war over Ukraine. The original Avatar is the highest-grossing film of all time, and its sequel is one of the most highly anticipated pictures of the year. In September, Disney re-released the original film in theatres and grossed more than US$70 million.