TO INFINITY AND BEYOND: A couple impersonate superheroes at the World Expo in Shanghai in 2010 (HOU JUN)

Furthermore, Hollywood draws in Chinese audiences by including local elements such as architecture and customs, as seen in the films Mulan and Kung Fu Panda, which were both set in China.

Hollywood's ability to appeal to global audiences through universal values has also been key to its success. Zhao Jun, General Manager of Guangdong Film Co., told China Film News that movies such as Spiderman, Transformers and Harry Porter often uphold universal values such as courage and kindness, which appeal to both children and adults.

China's problem

Many experts attribute weak domestic performance to the unfledged local industry and low film quality.

Cheng told Beijing Review that China film revenue mostly comes from ticket sales, with by-products making up only a small proportion. In Hollywood, only 30 percent of revenue actually comes from box office sales while the remaining 70 percent is drawn straight from by-products such as toys and video games, Cheng added.

According to the Institute for Cultural Industries of Peking University (ICIPU), box office earnings contribute more than 80 percent of domestic film revenue. Such an over-reliance on ticket sales should be addressed by developing movie-related merchandise.

Another problem is profit splitting, which largely benefits movie houses but not movie makers. In China, movie theaters receive 55 percent of box office revenues while producers receive only 43 percent.

The ICIPU study shows that film producers in America receive 60 to 65 percent of ticket sales, those in India and South Korea 60 percent and in the European Union 55 to 65 percent.

Rao Shuguang, Deputy Director of China Film Archive, wrote in People's Daily that producers form the basis of the film industry and that if their interests are not protected, development will be hindered.

Another hindrance to the domestic film industry is the steep cost of a movie ticket, which could run as high as 150 yuan ($25) for an IMAX film. Rao adds that high ticket prices push a large number of Chinese people away from cinemas.

Chinese film director Jia Zhangke says that China's strict movie censorship policies are no help either. "Ghost and gangster movies are forbidden," he explained. "However, Hollywood offers a variety of films including gangster and disaster movies. Surprisingly, they are allowed to be shown in China. I think it is unfair to local directors."