Was Marvel Studios' original plan to not use Shang Chi until the next Avengers movie or was it a consecuence of the whole Simu Liu-China problem?
Shang Chi was one of the best received post endgame movies, the fans seemed to like both him and the movie, and it kind of prepared the ground for a possible sequel. He was a perfect character to get the old heroes treatment (like Cap, IronMan and Thor) both individual saga and Avengers movie. However, we never got to see him again until Avengers Doomsday.
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Would have been nice to have him show up in something else, but I understand he’s not really intertwined with many other characters in the universe yet so it would be a stretch to add him to something like Captain America or Thunderbolts. His connection last we saw was Wong, Bruce, and Danvers… so potentially a role in The Marvels but again, it would probably feel like a narrative stretch.
They made his movie then put him on the back burner until the post-credit scene has purpose.
Creton was once working on Kang Dynasty and developing Wonder Man, there was the writers strike, possible that the Shang Chi sequel was gonna be about Kang but Kang was dropped. Leading to Marvel not knowing what to do with the character etc. I personally believe they were gonna tie Shang Chi's 10 rings and Kamala's bracelet to Kang in some form and the post-credit scene was related to Kang.
According to a trademark filing Marvel Studios did 3 years ago, the title of the movie was "Shang-Chi and the Wreckage of Time". And according to an allegedly leaked script of what would have become Avenger: Kang Dynasty, Shang-Chi's rings (as well as Kamala's quantum bands) were planned to be Kang's heirlooms and would have played a similar role to the Infinity Stones in Infinity War, as Kang would have been on a quest to retrieve them in order to achieve his plan.
Of course this was a pretty common theory at the time, due to plenty of pieces of evidence:
1. Kamala's great-grandma found one of the Bands in a Ten Rings temple.
2. The Quantum Bands can open rifts in space-time.
3. Kang's ship in Quantumania had giant rotating rings that looked a lot like Shang-Chi's, down to their etched inscriptions.
4. The beacon that the rings were emitting in the post-credits scene of the movie was said to be neither inter-dimensional, nor interstellar, leaving the only possibility to be that it was inter-universal. Plus, the way the whole scene was structured screamed "set-up for the next Avengers movie", leading many to believe that the rings belonged to Kang.
5. Marvel Studios hired Destin Daniel Cretton, the director of Shang-Chi for Kang Dynasty, leading many to believe that Shang-Chi and his lore would be instrumental for the story of Kang Dynasty.
Now, as to why the movie was eventually put on the back-burner:
Well, the answer is basically the 5th point from above. When Marvel put Destin behind the wheel of the next Avengers movie, he had to kinda let Shang-Chi 2 to the side. And if that wasn't enough, Destin signed on a big deal to spearhead both Movies and TV series for Marvel Studios, eventually leading to the creation of Wonder Man, which Destin was co-overseeing while working on Kang Dynasty.
The fact however that once Kang Dynasty changed into Doomsday and was taken over by the Russos, Marvel made Destin the director of Spider-Man: Brand New Day, instead of allowing him to properly continue the development of Shang-Chi 2, means that either that movie will be given to another director, potentially even with the draft/outline had Destin had already crafted before leaving the project aside, or it will just not happen unless Destin is freed up again. And if Destin takes over the entire second Spider-Man trilogy, that won't be anytime soon.
The film made about 430M on a budget between 150M and 200M (per wiki). It was probably a success, but not a real big hit.
The original director wasn't available immediately for a sequel, as they were going to direct Avengers: Kang Dynasty.
There wasn't an obvious story to tell.
Most likely, Shang-Chi was going to be an important part of the Kang Dynasty, possibly linking the rings to Kang or something similar. With hopefully increased popularity, they could then consider a sequel. Obviously Kang Dynasty didn't happen, and things got pushed back to Doomsday.
I would guess there's a low chance of a sequel.
But also the other problem is that the director of the first film is attached to do the sequel, but he's jumping from project to project in the MCU instead of focusing on this film, after Shang-Chi he went to do Kang Dynasty......that dies, then he's doing Wonder Man and then he's doing Spider-Man 4. so unless they hire a new director, Shang-Chi 2 has to wait until he's finished with his other MCU commitments