In Depth: ‘Ne Zha 2’ Heralds New Era for Chinese Animation

"Ne Zha 2" became the highest-grossing animated film of all time by earning over 12.3 billion yuan ($1.7 billion) as of February 18, also surpassing Inside Out 2’s record to reach $1 billion at the box office in just 11 days. [para. 1] Its total gross has now reached 14 billion yuan, ranking eighth globally and being the only non-Hollywood film among the top 10. Officials aim to keep the film in cinemas until March, projecting its potential earnings to exceed 15 billion yuan. [para. 2] Driven mainly by Chinese audiences, "Ne Zha 2" broke expectations, particularly those of producer Wang Changtian, who previously hoped for at least seven billion yuan. Enlight Media, its producer, ascribed the film’s success largely to its investments in animation since 2015. [para. 3]

Following its impressive release on January 29, Enlight Media’s stock surged, initially more than tripling to a market cap exceeding 100 billion yuan before stabilizing at 71 billion yuan. This success highlights a significant leap for China's animation industry, traditionally lacking the investment seen in Western giants like Pixar. [para. 4] Fang Xi of Citic Press Corp. emphasized that the movie’s triumph shows opportunities in the market still exist despite perceived scarcity. [para. 5] Videos of director Yang Yu showcasing his work on "Ne Zha 2" have gone viral. [para. 6] Despite not being a trained animator, Yang’s exceptional storytelling has been a key factor in the film’s success. He taught himself animation during his pharmacy studies, eventually finding success with an award-winning short film in 2008. [para. 7] Horgos Coloroom supported Yang to co-produce the first "Ne Zha" film, grossing five billion yuan and topping China’s box-office in 2019. [para. 8]

"Ne Zha 2" improves upon its predecessor with a longer runtime, more characters, and advanced visual effects, making production more complex. [para. 9] By employing a hybrid production model and collaborating with over 4,000 people from 138 companies, the film harnesses diverse expertise, including past contributors to "The Wandering Earth," once China’s second highest-grossing film. [para. 10] Enlight Media aims to emulate Disney’s approach with acquisitions and collaborations across the animation space. Coloroom Pictures has adopted a structure akin to Disney by investing in various animation firms. [para. 11] Through strategic integration and a broad distribution network, Enlight's model, illustrated by "Ne Zha 2," is set to construct a "Chinese Mythology Universe," aiming for long-term industry impact. [para. 12]

In international markets, "Ne Zha 2" faces significant challenges. Released in several countries, its overseas box office was just $23 million, far lower compared to domestic earnings. [para. 13] It ranks 20th among Chinese films abroad, trailing hits like “Crouching Tiger, Hidden Dragon” which exceeded $100 million overseas. Despite Chinese filmmakers predominantly focusing domestically for revenue, cultural differences and distribution hurdles limit overseas appeal. [para. 14] The uneven expansion was evident when "Ne Zha 2" premiered alongside "Captain America: Brave New World" in North America; the latter had a vastly wider release and higher earnings. [para. 15] Although overseas Chinese audiences support domestic films abroad, appealing to mainstream global audiences presents continual challenges. [para. 16]