Chinese box office takings increased by 64% last year, helped by Hollywood blockbusters such as 3D movie Avatar.
Revenue surged to 10.2 billion Chinese yuan (￡966m), though local officials said Chinese film-makers needed to up their game to compete with US movies.
Avatar was the biggest film in China in 2010, having taken $204m (￡141.5m). In contrast the top-grossing Chinese film, Aftershock, made just $100m (￡64.5m).
China's Film Bureau has urged local directors to improve their work.
"The variety of Chinese films isn't rich enough," it said. "The development of genres still remains at the stage of simple imitation and duplication.
"A 10 billion yuan box office... is still far from the value of a movie world power and is still far from keeping pace with the country's economic growth," its report said.
The North American box office made $10.6bn (￡6.8bn) in 2009, according to the latest statistics from the Motion Picture Association of America (MPAA).
More than 300 new cinemas opened in China last year Their 1,533 new screens bring the total number of screens up to 6,200.
According to the Chinese Film Bureau, not enough Chinese productions were "truly critically acclaimed" and capable of meeting "market demands and the cultural demands of the audience".
Despite such criticisms, Chinese releases increased in popularity last year. Of 526 releases in 2010, 59 of them made more than 10 million yuan (￡960,000).