China has become a power house in the global film market in terms of box office growth, according to the 2018 Chinese Film Industry report released at the Shanghai International Film Festival (SIFF).

The festival, which is the only category A international film festival in China and one of the largest in Asia, held its 21st edition from June 16 to 25 this year, showcasing 500 movies from around the world in 45 theaters in Shanghai.

China's box office takings totaled 20 billion yuan ($3.08 billion) in the first three months of this year, surpassing the $2.89 billion raked in by the United States. This is the first time China topped the global film box earnings in a quarter, according to Zhang Hong, vice chairman of the China Film Association, the institution behind the report.

The association has been compiling the report on China's film industry for 12 consecutive years, and this was the first time an international edition was released to introduce China's film industry to foreign peers.

China's film industry has been gradually catching up with the US in recent years. In 2017, box offices in North America grossed $11.1 billion, falling by 2.3 percent year-on-year. In contrast, China's box offices earned $8.53 billion, a jump of 13.45 percent from 2016.

Feng Wei, the Greater China President of the Motion Pictures Association of America, said that North America, China and the rest of the global market now each accounts for nearly one third of international box office takings.

In an exclusive interview with China Daily during the SIFF, Jeff Robinov, a veteran Hollywood film producer who collaborated with China's Fosun Group and Sony Pictures to set up multiplatform media company Studio 8, suggested that one of the factors behind China's rise is the aggressive marketing efforts undertaken to promote interest in domestic movies.

Robinov, who served as the president of Warner Bros from 2007 to 2013, pointed out that Chinese corporations are also playing a part in this growth, having leveraged their resources to bring more overseas films to China, as well as introduce Chinese artists and productions to the global market.

In the past decade, the cost of production has gone up and this has resulted in films being financed by multiple studios instead of a single entity, said Robinov.

Studio 8, for example, was just one of the many parties, including The Ink Factory, TriStar Production, LStar Capital and Bona Film Group, that backed American Chinese director Ang Lee's experimental film Billy Lynn's Long Halftime Walk in 2016.

The film, which was shot at 120 frames per second, resulting in extreme clarity, tanked at the box office, raking in just $30 million worldwide against a budget of $40 million. Most films are shot at 24 frames per second.

However, Li Haifeng, senior vice president of Fosun International and president of Fosun Film Group, maintained that the movie was far from being a failure.

"We identify with Ang Lee's dedication to continuously exploring new possibilities of filmmaking, and hope to have a long-term collaboration with the director," said Li.

Industry players have said that the craze of plowing investment dollars into the movie industry is already cooling down in China, as investors are realizing that only a few movies among the around 600 films made every year turn a tidy profit. Though the domestic blockbuster Wolf Warrior 2 made history by earning a whopping 5.6 billion yuan in box offices to become the best-selling Chinese film ever, many local productions fail to make an impact.

During a forum at SIFF, Wang Changtian, president of Beijing Enlight Media Co, one of the leading film production companies in China, said that he foresees some challenges for the local film industry, saying: "Quite a number of film studios are having difficulty raising funds. Meanwhile, production costs have continued to grow while copyright sales are falling."

Li from Fosun noted that it is natural that the capital market undergoes periods of highs and lows and urged industry players to focus on quality instead of quantity.

"We will ultimately be recognized for our efforts and be able to create good films that resonate with the audience if we continue to prioritize the production of good content," he said.

In August, the first major Studio 8 production Alpha, a fantasy adventure aimed at family audiences, will be released in the US. Another feature film by Studio 8, White Boy Rick, will also land in the cinemas in the US later this year. The film is a crime drama based on true events in the 1980s.

It has taken a longer time than planned for Studio 8 to take off, Robinov said.

"There is a gap in the industry that small- to medium-sized films can fill, and that's in the lower budget genre film segment－this is where we can fit in," he said.

After all, there have been instances where low-budget Chinese films achieve success. In 2017, Twenty-Two, which features the tales of comfort women, had the honor of becoming the first Chinese documentary to hit 100 million yuan at the box offices. Another example is Seventy-Seven Days, a film aimed at outdoor enthusiasts and art-lovers, which earned in excess of 100 million yuan.

"In recent years, more and more Chinese audiences are calling for diversified movie content," Li Jifeng, producer of Seventy-Seven Days, was quoted by Xinhua.