The proximity of Chinatown to the Hollywood studios opened opportunities in the nascent business of cinema. Some movies were shot in Chinatown itself. Some Chinese, like Willie Fung, found employment as actors. However, Hollywood routinely depicted the Chinese as sinister characters. Chinese Americans started making their own movies. When she directed "The Curse of Quon Gwon" in 1917, Marion Wong became the first Chinese-American filmmaker and one of the earliest female filmmakers in the world. In 1922 Anna May Wong, an ethnic Chinese born in Los Angeles, starring in Chester Franklin's film “The Toll of the Sea", became the first Chinese movie star of Hollywood. She starred alongside Marlene Dietrich in Josef von Sternberg's "Shanghai Express" (1932). The second Chinese-American star was Keye Luke, popular in the 1930s. Eventually, a Chinese-American production company was established in San Francisco: it was called Grandview Films.

The Chinese communities were wealthy enough to be considered worth the trip across the ocean by stars of the Cantonese opera (like Li Xuefang who visited San Francisco in 1927) and of the Beijing opera (like Mei Lanfang who spent almost the whole of 1930 in San Francisco).

During the Great Depression that started in 1929, the Chinese-Americans community continued to suffer from prejudice but also continued to make inroads in mainstream culture.

Hostility towards the Chinese community led to the demolition of Los Angeles' Chinatown in 1931 to make room for the city's new train station. Chinese-American farmers were devastated by the Great Depression and by the competition of Japanese-American farmers. The latter often took over the farms of the former.

Thanks to activist and investor Peter Soo Hoo, in 1938 Los Angeles' New Chinatown opened (north of the original one) and also absorbed much of Market Chinatown. Soo Hoo's association found a way to purchase the land and hired architects Erle Webster and Adrian Wilson to create attractive buildings with Chinese motifs, including two gates and a five-tiered pagoda. The intention was to make it a tourist attraction, just like its San Francisco counterpart. This was a fancier Chinatown, with restaurants that drew Hollywood stars. One of the first movies produced in New Chinatown was Josef von Sternberg's masterpiece "The Shanghai Gesture" (1941). This is where You Chung Hong, the first Chinese-American lawyer of California, lived. Like its San Francisco counterpart, New Chinatown was funded and constructed by Chinese Americans. Many buildings were designed by the first Chinese-American architects to graduate from the University of Southern California: Gilbert Lester Leong and Eugene Choy (the first affluent Chinese American to build a home in the Silver Lake neighborhood, soon followed by others). Fung Chow Chan, owner of a famous New Chinatown bakery, founded the first Chinese-American commercial bank in California: Cathay Bank.

In 1935 two second-generation Chinese, Chingwah Lee (an art historian and the son of a merchant who had emigrated to San Francisco in 1877 and had become a herbalist of traditional Chinese medicine and an art collector) and Thomas Chinn (born in Oregon, whose maternal grandfather had arrived in California in 1849), founded the Chinese Digest, the first English-language magazine written by and for second-generation Chinese Americans.

Chiang Kai-shek, the new leader of the Kuomintang after Sun’s death, reunified China in 1927 and moved the capital to Nanjing, but civil war erupted between the Kuomintang and Mao’s Communist Party, founded in 1921. Chiang Kai-shek's economy experienced a boom from 1927 until 1931. His economy was insulated from the Great Depression because China was on the “silver standard” instead of the “gold standard” of the West and of most Asian countries. Since the 13th century its main coin had been the silver yuan. For more than a century, China had been selling its goods to the New World in exchange for silver. As the world sought safety in gold, the price of gold increased and the price of silver decreased, making Chinese goods exports more competitive. Modern industries began to appear in China, particularly in the cities of the Yangtze Delta, like Shanghai, and a rich urban bourgeoisie emerged. In June 1931 the floods of the Yangtze Kiang killed more than three million people, in September 1931 Japan attacked Manchuria, and in November 1931 Mao declared a Chinese Soviet Republic in pockets of land controlled by his communist rebels. But the most lethal blow dealt to the Chinese economic boom came from the USA: in June 1934 the USA decided to purchase silver because it made the Chinese currency appreciate (one year later, China abandoned the silver standard). And then in July 1937 Japan launched a large-scale invasion of China, whose most notorious event was the “rape of Nanjing” in which 350,000 Chinese were killed and 100,000 women raped. The Chinese intellectuals of the USA were now fighting on three fronts: fighting Japanese imperialism in Asia, communism in China itself and racism in America. Starting in 1938 and until 1941, the Chinese associations were successful in mobilizing public opinion with their annual "Bowl of Rice" parties that were basically fund-raising events to benefit Chinese civilians. They were held simultaneously in the major Chinatowns of the USA and in many other participating towns. More than 200,000 people attended the one in San Francisco in 1940. This was an important moment: for the first time a large number of white people joined the Chinese in Chinatown (to celebrate a national Chinese issue). Clearly those white people didn't think of Chinatown as a nest of opium dens and brothels.