Is the domestic box office boom a lipstick effect?

As frequent data underline the fact that China’s manufacturing is slowing, it is convenient and common for almost all the world’s economic woes to be laid at its door.

Some observers have even gone so far as to shrug off the Chinese economy’s few bright spots like its soaring movie box office as merely another case of the “lipstick effect”, which describes the trend for women to buy more affordable luxury goods such as lipstick during times of economic uncertainty.

But is China’s box office really inversely correlated to the country’s economic health?

A cursory glance at China’s robust box office growth and the gradual decline of its GDP growth over the past few years may give credit to such a lipstick view. While China’s box office quadrupled between 2010 and 2015, the growth of the world’s second-largest economy has steadily slowed from 10.6 percent to 6.9 percent, the lowest in a quarter century. Therefore, it seems plausible to conclude that more Chinese people have gone to cinemas to seek temporary relief from the economic headwinds.

But a close examination of the two sets of statistics indicates that the assumption that the ongoing surge in the number of movie-goers in the country can be used as an inverse index to gauge economic health is a fallacy, because it simply flies in the face of the Chinese economic reality, which is far more complex and interesting than expected.

China’s annual box office returns reached 44.1 billion yuan ($6.7 billion) in 2015, up nearly 50 percent over the previous year. And its movie market is a major one continuing to grow.