More US films set for China

China has agreed to open its market to more US films and provide better terms to US studios whose films are released in the country, a move that has created a stir among Chinese filmmakers.

China and the United States have reached an agreement concerning issues related to films after their World Trade Organization dispute last year, according to Xinhua News Agency.

"This agreement with China will make it easier than ever before for US studios and independent filmmakers to reach the fast-growing Chinese audience, supporting thousands of American jobs in and around the film industry," US Vice-President Joe Biden said in a statement.

The agreement came during Chinese Vice-President Xi Jinping's five-day US visit, which ended on Friday.

It does not change the annual quota of 20 revenue-sharing foreign films in Chinese theaters, but it allows 14 premium format films, such as 3-D and IMAX movies and similar enhanced format films, which will be exempt from the quota.

Also, the US studios' share of their films' grosses in the Chinese market will rise to 25 percent, from about 13.5 to 17.5 percent now.

Chris Dodd, president of the Motion Picture Association of America, called the pact "tremendous news for the millions of American workers and businesses whose jobs depend on the entertainment industry".

China's box office has been growing at an annual rate of 30 percent since 2003, reaching $2.1 billion last year. It has become the highest-grossing overseas market for many Hollywood blockbusters, such as Transformers 3 and Avatar.

Chinese director Gao Qunshu said the agreement would bring more challenges for China's filmmakers, but in the long term he believed in the power of competition in an open market. "With 14 more foreign films, the market space for local productions will further shrink," he said. "There will be pressure, but taking the changes as a motivation to make better films is the only way out. More 'lame' works will be driven out of the market."

Qin Hong, chairman of Stellar Group, a leading privately owned film company, called for the government to crack down harder on piracy to protect local films against fiercer competition. "Most local productions win over audiences by plotlines, not grand scenes - we are so far unable to create another Mission: Impossible 4," he said.

The agreement grew out of a case challenging China's restrictions on the import and distribution of cultural products, which was won by the US at the WTO.

It will be reviewed in five years to see if it has functioned as envisioned, according to Reuters.