A slowing of its fortunes in the past few months isn’t expected to stop Chinese box office from overtaking the U.S. in 2017 for the first time. That’s according to new data compiled by Bloomberg. Middle Kingdom moviehouses are on track to rake in $10.4 billion in 2017, versus an estimated $10.2B for the U.S. market, according to average projections by IHS Markit and PwC. It’s important to note here that the figures do not rep North America, which are projected by comScore to hit $11.6B in 2016. The projections in question are just for the U.S. market versus China.

Next year will be particularly interesting to watch given a new U.S.-China contract is to be negotiated. That will update and replace the February 2012 agreement that saw the Middle Kingdom increase quotas and revenue share for the studios. Who the American president turns out to be could also certainly have an impact here.

Looking at this year, things got off to a strong start. In February, Stephen Chow’s The Mermaid helped push Middle Kingdom box office to a record 6.87B yuan ($1.05B) for the month. That was the first time Chinese turnstiles outspun those in North America during a single month. U.S.-only box office was bested by the PROC in February 2015.

Chinese ticket sales are expected to increase by 22% in 2017, says Bloomberg. But this year has been topsy-turvy since February and that has resulted in skeptics wondering if the breakneck momentum China has demonstrated is experiencing a temporary hiccup or something more permanent.

Warcraft 1
Universal Studios

The second quarter of this year was down 4.6% with July’s takings then off about 18.6%. That was the first time in five years that such a decline has been witnessed in the rapidly expanding market. June, however, was buoyed by Warcraft which at $221M in receipts is the No. 3 movie of the year behind Zootopia at No. 2 with $236M and The Mermaid at $527M. Those films helped push overall box office up over 2015 in the first frew months of 2016.

The rest of the year has been marked by some local misfires, particularly in July which is traditionally a blackout month where homegrown pics thrive. The star-studded League Of Gods fell hard in its second week, for example. The summer has now delivered only two Mandarin-language movies to cross $100M: Skiptrace with Jackie Chan (and Johnny Knoxville and partly in English) and the recent 3D adventure fantasy release Time Raiders.

“Local films just aren’t resonating like they did last year,” an industry source recently told me, but this person also suggets a reversal ahead. As Chinese audiences grow more sophistocated, local films are expected to attempt production values that emulate Hollywood.

Another reason box office has slowed this year is believed to be the government’s vow to crack down on the practice of inflating returns. Last year’s Monster Hunt was hit by reports of empty but sold out screenings every 15 minutes, and producer Edko Pictures admitted to giving away $6.2M worth of tickets near the end of the run. It also said it was instituting serious criticism to those involved at the ground level.

The authorities this year slapped the distributor of March’s Ip Man 3 with a one-month suspension for fraud. But some sources believe manipulation continues and has negatively affected moviegoers who can’t see films they want — instead opting out of going to the movies at all — and that has a trickle-down effect. There are also fewer discounts on tickets.

The next big Hollywood releases in China are Jason Bourne and Ice Age: Collision Course which both go out next Tuesday. That mid-week release date means some things haven’t changed from last year when we saw the tactic of double-dating and few Friday releases in the fall for Hollywood. Star Trek Beyond is set for September 2 and should also give a boost to business. The amount of screens is expected to rise to about 40K by the end of 2016. Beyond that, it’s a wait-and-see game as there are currently no Hollywood and few Chinese films dated into 2017.