China delays blockbusters as cinemas empty out under state orders to control Wuhan virus outbreak
- The release of seven highly anticipated blockbuster movies has been put off indefinitely as China takes steps to contain the deadly pneumonia epidemic
- Media stocks face the brunt of sell-off on the last day of trading before the long holiday, with a key gauge slumping 3.8 per cent
China’s studios have indefinitely delayed the release of seven highly anticipated blockbusters just before the start of the Lunar New Year holiday, yielding to government orders to avoid public gatherings to contain the spread of a deadly viral outbreak.
Tickets will be refunded because of the quickly spreading epidemic that broke out in the central city of Wuhan in December, producers said in separate statements on Thursday.
The government orders came just a day before the start of China’s long Lunar New Year holiday, casting a shadow over the movie industry that was pinning its hopes on a recovery in box-office revenues during the nation’s most important festival.
Cinemas, along with restaurants, airlines, etc are taking a beating amid concern that quarantine measures would empty out public places precisely at the most important holiday for the nation of 1.4 billion people.
The industry is already grappling with shrinking investment amid increased government scrutiny over the past year.
A gauge of China’s media stocks slumped 3.8 per cent on Thursday, underperforming a 2.8 per cent decline in the benchmark Shanghai Composite Index on the last trading day before the holiday, on concerns the sector will endure a prolonged slowdown.
Wanda Film, owned by billionaire Wang Jianlin, plunged 7 per cent to 17.29 yuan in Shenzhen. Beijing Enlight Media slid 5 per cent to 10.57 yuan after saying it will pick up another time slot for the release of its animated movie Legend of Deification. China Film, which distributes movies and runs a theatre chain, sank 4.8 per cent to 13.81 yuan in Shanghai.
China’s box-office growth slowed to 5.4 per cent in 2019. It was the second consecutive year that industry growth slowed down, as investment shrank amid the increased regulatory scrutiny of content approval and crackdown on tax evasion. Some 1,900 companies producing movies and TV dramas shut down last year, according to the Securities Daily.
China is taking all steps possible to contain the spread of the coronavirus, imposing a lockdown in Wuhan. All public transport in and out of Wuhan, including trains, buses and ferries, stopped at 10am on Thursday as the central government imposed a quarantine to try to contain the spread of a coronavirus that has killed 17 people and infected hundreds more.
China reported 571 cases of pneumonia caused by the virus and 17 deaths, in 25 provinces as of Wednesday, according to the National Health Commission. The outbreak coincided with the nation’s busiest transport season, when an estimated 3 billion tourist trips will be made over the holiday.
Airlines, tourism and consumer companies were among the worst-hit stocks on concern the spread of the epidemic will discourage travelling and deter spending. Severe acute respiratory syndrome (Sars), which infected more than 8,000 people and killed almost 800 in 2003, slashed China’s monthly retail sales growth by half and chipped two percentage points off quarterly economic expansion that year.
Additional reporting by Yujing Liu
