Hello, I’m Evelyn. I am writing to you from Beijing. Welcome to the latest edition of The China Connection. This is a concise summary of what I have seen and heard from local companies.
Today, we take a closer look at Alibaba’s latest efforts to take on the global animation market, just as Hollywood is working hard to win over Chinese movie fans. What do Chinese executive producers think is the path to success?
enjoy!
Do you have any thoughts about today’s newsletter? Share them with the team.
big story
How do Chinese animation studios operate? alibaba Deciding what kind of story to tell?
The answer starts with internet user data.
It’s not about “what we like,” it’s about “what they like.” Huiyu Xu, producer of Alibaba’s video platform Youku, cited the app’s approximately 170 million users.
Let me say this out loud: That’s a far cry from the desire to explore concepts that Hollywood directors often start with.
We spoke to Mr. Xu, executive producer of Youku’s popular animated series “Cang Yuan Tu,” at Alibaba’s vast new Beijing office, which includes a restaurant, coffee shop, and movie theater.
The production team of Youku’s anime “Cang Yuan Tu” series will launch Season 3 on March 12, 2026 in Beijing.
CNBC | Evelyn Chen
“Cang Yuan Tu” is a fantasy martial arts story with roots in a 2019 online novel that has received recommendations from 5 million readers in just over a year. This kind of data is also a factor in rival platform Tencent Video’s interest in adapting earlier novels by the same author. Since Season 1 of “Cang Yuan Tu” aired in 2023, the Youku anime series currently has more than 9.9 million followers in China.
Therefore, it has become the most popular program among Alibaba’s programs. NetflixVideo platforms like , which offer domestic and international movies and TV shows for 25 yuan ($3.62) per month. The movie version of “Cangyuanzu” is scheduled to be released in the summer of 2027.
Xu said that to meet ever-growing viewer demand, Youku must continue to improve the production quality of its series, from the level of detail in the animation to hiring better artists to paint the watercolor stills that appear within the show.
“Compared to Disney animated movies, there’s not much difference from three years ago,” Xu told CNBC in Mandarin when we met earlier this month. “But for us, it’s like night and day.”
Despite censorship and limits on the number of American films shown each year, Hollywood remains focused on China. Disney’s 2025 animated film “Zootopia 2” could thank China for about a third of its $1.87 billion global box office gross, making it the country’s highest-grossing Hollywood film of all time.
Meanwhile, New York-based film production and distribution company A24 will also release “Marty Supreme,” the company’s highest-grossing film in its history, in China this month.
Actor Timothée Chalamet (right) and American film director Joshua Safdie attend the premiere of the movie “Marty Supreme” held in Beijing, China on March 10, 2026.
Visual China Group | Getty Images
To promote the story of a fictional table tennis star, lead actor Timothée Chalamet traveled to China for the premiere in Beijing. He even played table tennis with locals and served traditional street food from his cart, as recorded on his new celebrity account on the social media platform Xiaohongshu. Screenwriter and director Josh Safdie also appeared in Beijing with Chalamet.
However, according to Chinese online ticket site Maoyan, the R-rated film’s opening weekend box office gross was just over 3 million yuan (approximately $440,000).
Moving outside China
Meanwhile, Youku joins other Chinese animation and entertainment companies with ambitions outside China.
According to Youku, “Cang Yuan Tu” is gaining attention in Thailand and Vietnam. The company operates an international streaming platform in addition to a YouTube channel with 1.27 million subscribers for animation alone. Those who want to watch all episodes with subtitles will have to pay $3.99 per month.
In English, “Cang Yuan Tu” officially translates to “The Demon Hunter,” but it has nothing to do with the popular Netflix show “KPop Demon Hunters.”
Youku is planning other animated content this year in an urban, futuristic setting with less traditional Chinese elements, Xu said. But the company is not immune to the impact of artificial intelligence, and Xu predicts that it will likely hit special effects teams more than smaller teams responsible for creative direction over the next year or two.
In the US, A24 has reportedly launched an AI lab with funding related to OpenAI. The film company has moved away from traditional Hollywood marketing tactics to work more collaboratively with directors, and has also quietly opened its first movie merchandise store in mainland China inside Alibaba’s new Beijing office.
A24 did not respond to a request for comment.
The question of what resonates with China’s hundreds of millions of consumers transcends cultural and technological borders. When I asked Xu why the third season of “Cang Yuan Tu” seems to be centered around the mythical phoenix, he hinted at what the team wanted to convey.
“You shouldn’t stop living just because there’s a war. No matter what happens outside, people’s hearts should be bright,” he said.
need to know
Rice middle school. According to China’s Ministry of Commerce, the two sides reached a “new agreement” in Paris. This is despite President Trump postponing his visit to Beijing, which was originally scheduled for late March.
Alibaba cuts staff. The company revealed last year that its headcount decreased by 34% amid a shift to a focus on AI. tencent Last year’s earnings showed a slight increase in employee numbers.
Nvidia conspiracy. US prosecutors indict supermicrocomputer employee on smuggling charges Nvidia Chips to China.
very soon
March 24th to 27th: China Boao Asia Forum
March 25: PDD Holdings announces financial results
March 25th to 29th: China Zhongguancun National Technology Forum (Beijing)
March 27: China industrial profits in January and February
