The poor performance of Disney’s The Little Mermaid at the Chinese box office has reopened questions on Hollywood’s increasing difficulties in the world’s second-largest economy and the role racism has played in the film’s reception.

The live action remake has grossed just $3.6m (£2.9m) since its release in Chinese cinemas on 26 May, according to Box Office Mojo.

The film, starring Halle Bailey as the mermaid Ariel, arrives as Hollywood tries to edge back into a market increasingly dominated by domestic productions, and as Chinese authorities have shown reluctance to approve western films for release.

Some have blamed racism for the flop. A racially charged backlash in the west followed the announcement in 2019 that Bailey, an African American actor, was to take the lead role of Ariel, and appeared last month to be joined by the Chinese state media tabloid the Global Times, known for fanning the flames of western culture wars, when it published an article accusing Disney of “forced inclusion of minorities” and “lazy and irresponsible storytelling”.

The Little Mermaid has just 2.5 stars on Douban, a popular Chinese review site. IMDb, an American review site, last week claimed the film had been the target of “unusual voting activity” from people trying to downgrade the film’s rating.

But many of the negative Douban reviews are critical of the film’s plot and execution, rather than Bailey’s casting specifically. And in Hong Kong, the film took in about $634,000 on opening, making it the second-best performing film that weekend, according to Box Office Mojo.

Chris Fenton, the author of Feeding the Dragon, a book about China and Hollywood, said the film’s difficulties in China reflects a broader challenge for Disney. “Hollywood has lost huge ground in the market in the past decade, but Disney, in particular, has faced some tough headwinds from Beijing in recent years,” he said.

That has included the efforts by Bob Iger, Disney’s chief executive, to woo Beijing while also placating US lawmakers who are increasingly hawkish on China.

Iger returned to the helm at Disney in November, less than a year after stepping down as CEO. He has been credited with improving the company’s relationship with the Chinese government, negotiating the opening of theme parks in Shanghai and Hong Kong. Days after Iger returned to Disney, Avatar: The Way of the Water was approved for release in China.

In April he met the US congressional China committee, reportedly speaking about the difficulties in dealing with China. In 2020 the entertainment company was heavily criticised after it emerged it had cooperated with authorities in Xinjiang, a region in western China where Uyghurs and other minorities are harshly oppressed, to film parts of Mulan.

Fenton also noted that Ariel is not a well-known character to Chinese audiences. In 2020, Disney’s Mulan took in $23m on its opening weekend in China. “Thanks to a world-class domestic film industry, Chinese audiences now have the choice of seeing well-known, relevant stories created by their own film-makers on the big screen.”

But many people still feel that Chinese audiences are too resistant to black characters. Murjana, a Hong Kong-born Nigerian trainee lawyer, said she was used to experiencing racism in her home city.

“It’s 2023 and if you’re black or dark skinned in Hong Kong, there’s a 95% chance there will be an empty seat next to you on the sardine-packed train … It’s not so much surprising as it is amusing that people still allow something as arbitrary as the degree to which one’s skin produces melanin to dictate whether they would enjoy a movie about a fictional half-fish half-human.”