At the Shanghai festival, which runs through Monday, seven top Chinese studio chiefs gathered for the first forum there to discuss the challenges ahead.

Yu Dong, chairman and CEO of the Bona Film Group, says last year was "a severe winter" for the industry. Nearly half of the publicly-listed film companies saw their market valuations shrink.

Following A-list actress Fan Bingbing's tax scandal, China ordered film and TV companies and individuals to fully declare their earnings and "self-examine taxpaying". A total of 11.8 billion yuan of unpaid taxes was filed with the tax authorities by the end of 2018, according to Xinhua News Agency.

Anxious about the market slowdown, Yu says Chinese filmmakers should work harder toward developing new film genres and raising the quality of their storytelling to draw back audiences to the cinema.

"When I started to work in the film sector in 2001, China's annual box-office takings were less than 900 million yuan. The figure expanded to 60.9 billion yuan in 2018. We should keep this (earlier) momentum going despite 2019 looking like a difficult year," Yu says.