Chinese blockbuster Ne Zha 2 has ousted Disney's Inside Out 2 to become the highest-grossing animated film of all time, state media reported Tuesday, citing a domestic ticketing platform.

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Ne Zha 2 has packed out cinemas in China, where it has already claimed the title of the country's biggest box-office release. The film was released last month.

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State news agency Xinhua, citing ticketing platform Maoyan, said on Tuesday that the fantasy epic had raked in more than 12.319 billion yuan (about $1.72 billion).

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That figure edged it past Inside Out 2, which took $1.7 billion following its release last year.

Ne Zha 2 tells the tale of a rebellious young deity who uses his powers to battle formidable foes after his village is destroyed.

The film was released overseas this month, sparking hopes among some Chinese that it would garner similar acclaim abroad.

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President Xi Jinping has urged more confidence in traditional culture and aims to build China into a cultural powerhouse by 2035.

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The original Ne Zha became what was then China's highest-grossing animated film after it was released in 2019.

But its sequel surpassed all former domestic box office record holders—including the 2019 sci-fi hit The Wandering Earth and 2021's patriotic war film The Battle at Lake Changjin—in just nine days.

Drawing on the 16th-century novel "Investiture of the Gods", Ne Zha 2 has tapped into growing demand for products inspired by traditional Chinese stories, and national pride in the country's technological progress.

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