The increasing number of imported movies into the country is putting pressure on the Chinese film industry.
Tian Jin, deputy head of the State Administration of Radio, Film and Television (SARFT), announced at a press conference Monday that the market share of domestic movies had dropped due to the increasing number foreign film imports.
From January to October, the box office of domestic films accounted for 41.4 percent of the total, down from that of the same period of last year. Though it increased by 40 percent year on year to 13.27 billion yuan ($2.1 billion), according to Tian.
According to figures released earlier by the SARFT, the box office of domestic films in the first six months of the year only accounted for 35 percent of the total.
Last year, domestic films contributed to 53.61 percent of the total box office in China.
"On the other hand, it shows that China has kept its promise to the World Trade Organization (WTO) regarding opening up the film market and foreign films having a smooth channel into China," Tian said.
In February, China and the US agreed on a memorandum of understanding on films in the WTO's China-audiovisual case. According to the memo, 14 more US films will be imported into China annually, in addition to the original 20-film quota.
The quota rise has affected the industry since Hollywood productions are of better quality and attract more audience, said Wang Changtian, president of Enlight Media, a leading domestic film and TV production firm.
Cash flowing into the film industry has begun to slow down, which showed less confidence among investors, Wang said.
However, insiders admitted that opening the market was inevitable and the industry should improve its quality and sharpen up its competitiveness.
Wang Xingdong, a renowned playwright and national political advisor, said Tuesday that improving creativity and the quality of screenplays was urgently needed.
"Although budget and technologies play a very important part in a film, people want to watch a good story first," he said. "Today many domestic films fail to tell a good Chinese story."
Domestic films will not beat Hollywood films by copying them, Wang said, adding that they need to create unique storylines based on the country's reality, in order to attract Chinese audiences.
In addition, to encourage the creation of good films China needs to better protect the copyrights of producers and playwrights, Wang said.
"It will be a long campaign between domestic films and foreign blockbusters as improvement in quality will not be made in a few days through some preferential policies," he warned. "The whole industry and policymakers should realize that.