Even as trade tensions are mounting between the United States and China, the importance of Chinese movie-goers to Hollywood has never been more apparent. Global cinema box office sales reached a record high of US$40.6 billion in 2017 despite a downturn in audiences in the US and Canada, the Motion Picture Association of America (MPAA) said in its latest annual report. Attendance at US and Canadian cinemas fell to a 22-year low. China’s cinema box office sets Lunar New Year holiday record as ticket sales hit US$852 million The growth was largely propelled by China, which accounted for US$7.9 billion in ticket sales in 2017. That fuelled a 7 per cent increase in overseas box office takings for US films. US and Canada ticket sales by comparison totalled US$11.1 billion, down 2 per cent. If not for a 4 per cent increase in the average ticket price to US$8.97, the drop would have been worse. The Chinese film market is going to be the largest film market in short order. They’re building about 25 screens a day Charles Rivkin, MPAA chairman After briefly stalling in 2016, the needle is going the other direction in China. “The Chinese film market is going to be the largest film market in short order,” said Charles Rivkin, a former US assistant secretary of state who in January took over from Christopher Dodd as MPAA chairman. “They’re building about 25 screens a day.” China’s cinema owners bullish about industry’s prospects The shift has in many ways already begun. For the first time, the Chinese movie market overtook North America in the first quarter of 2018. Several big-budget Hollywood productions, including Steven Spielberg’s Ready Player One , Pacific Rim: Uprising and Tomb Raider , had bigger debuts in China than in the US and Canada. The growing importance of Chinese cinemas to Hollywood comes at a sensitive time for relations between the two countries. In response to moves by the Trump administration, China on Wednesday unveiled proposed tariffs on numerous American products, rocking the stock market and stoking fears of a larger trade war. Hollywood being short-changed by Chinese cinemas, audit finds Restrictions on film imports to China are already considerable for Hollywood; the country caps foreign films at 34 per year. The Office of the United States Trade Representatives is currently negotiating to lessen those terms. “We remain hopeful,” said Rivkin of the negotiations. While pessimism often abounds about the future of the cinema business in North America, due in part to digital upstarts like Netflix, Amazon and Apple, the MPAA sought to paint a more optimistic picture. China smashes world monthly box office record, as February takings top US$1.57 billion John Fithian, president and chief executive of the National Association of Theatre Owners, attributed any year-to-year ups and downs to the quality of the releases. Among the statistics trotted out by the report: more than three-quarters of the US and Canada population – 263 million people – went to cinemas at least once in 2017. The gender split of audiences was exactly 50-50. For the first time, the report expanded to include home entertainment revenue. Despite the cratering of the DVD market in recent years, global home entertainment grosses have increased in the last two years, thanks to rising digital sales: US$32.1 billion in 2017, up from US$24.5 billion in 2016. Those totals, however, include subscription streaming services, which many consider a threat to cinemas.