China’s Ministry of Commerce has said that it’s preparing an appeal to a ruling last week by the World Trade Organization (WTO) that could open the country’s market for US movies, music and books.

“We are preparing the necessary documents and are not ruling out the possibility of an appeal,” said Ministry of Commerce spokesman Yao Jian on Monday. He added that the Chinese cultural sector suffers from a huge trade deficit and that “our competitiveness is still pretty weak.”

“Against this backdrop, I think it is appropriate and just for China to impose some controls that are in line with the country’s economic development stage, and cultural and historical tradition,” Yao said.

The ruling ordered China to stop forcing US content owners to use government-controlled distribution companies. Currently all foreign movies in China are distributed by the state-owned China Film Group Corporation, or a second company, Huaxia Film Distribution, which is part-owned by China Film.

However the ruling did not address China’s import quotas including an annual quota of 20 revenue-sharing films. Chinese regulations demand that foreign films should not exceed one third of the total number of films distributed in the country. Another 30-40 foreign films a year are distributed on a flat-fee basis.

China’s box office grew by 27% to reach $617.13m (RMB4.22bn) in 2008, of which local films accounted for a 61% market share.

China has 60 days from the Aug 12 ruling to appeal or it will passed to a vote among WTO member countries.