After a decade in which admissions have collapsed from 16 billion a year to some 2.1 billion, the Chinese film industry is now facing up to the challenges of globalisation.
Worried by the perceived threats to the film industry brought on by the opening of its borders, the Chinese central government has announced a programme of modernisation measures.
Chief among these is a restructuring of the country's production system that sees the number of studio groupings fall from ten to six. Each will be responsible for a particular region and take on additional functions such as film marketing.
"Consolidation is key. It is the only way for China to survive," said Wu Ke, deputy director general of the film industry administrative bureau. "The aim is to have giant studios with the ability to distribute."
Zhu Yongde, director of the Shanghai Film Studio, said: "Until now each province had its own policies and kept its own revenues. That simply is not efficient. We need to adapt to the market, that means building large corporations capable of surviving change."
In a similar vein, the ministry of radio, film and TV is also pushing for integration of different media into new multi-media groups.
The reform process has taken on a new urgency as at inter-governmental level it was announced this weekend that the US and China had reached agreement on the issues that had held up China's accession to the World Trade Organisation. That could mean that China joins the WTO by the end of this year or early 2002 and is forced to progressively pull down its barriers to international trade.
Zhu spoke of the "great pressure" facing the Chinese film sector in the run up to the WTO signing, and the fear of being over-run by Western films thereafter. But he said that there was no need to feel overwhelmed. "In our own films we will emphasise national and local characteristics. As everyone now knows, nothing sells so well abroad as a film which is true to its local roots."