It is widely believed that Crouching Tiger Hidden Dragon (2000) and Hero (2002) had both announced the beginning of the Chinese blockbuster (dapian) phenomenon and defined a new way to interpret the increasing trend of transnational co-productions in China. The success of these marked a new trend of understanding martial arts pictures with transnational production, budget and stars, such as The Promise (2005) and The Banquet (2006). In light of this phenomenon, it seems that the notion of national cinema or the national has become something evoking alarm and trepidation. This is because blockbusters in China and national identity are no longer tied to bounded territories. However, many martial arts blockbusters in recent decades have benefited from certain states’ control, such as the quota system or exhibition arrangements that are favourable to domestic production. Also, they directly address a national audience with shared imagination, identity, stories and heroes. These measures and imaginations have protected the national film industry and secured martial arts blockbusters the place of box office top ten in China. Martial arts cinema is indisputably a national genre. However, the notion of national cinema seems incapable of grasping the multiplicities, complexities and changes of the genre, such as the national in the genre may not entail nationalism but modernization, conservatism, individualization and even colonial structure. It is no surprising that many recent martial arts blockbusters are co-produced by Hong Kong filmmakers who are capable of modernizing national narration and imagination. In this regard, imagination, narration, and cultural assets in recent martial arts cinema are not always isomorphic. Today’s martial arts heroes are no longer rebellious knight-errants or engage in justice, and they shift their businesses from jianghu to the secular world where they are more conservative, pragmatic and law-abiding. Instead of repudiating both the notion of national cinema and transnational cinema, my paper explores what the national means in martial arts cinema in a situation where the nation-state faces particular transnational destabilization; how and why martial arts cinema, once a national genre in colonized Hong Kong, in recent decades became popular in China; and in what way the change of narration in martial arts cinema is related to the rise of Chinese economy and culture. In this paper, I will discuss these issues in the contexts of martial arts co-productions like Ip Man (2008), Bodyguard and Assassins (2009), Detective Dee: Mystery of the Phantom Flame (2010), Dragon (2011) and other related films.