According to forecasts from industrial insiders, films produced in China will decrease by 30 percent year-on-year to 500 this year, and the industry is expected to continue to shrink next year.

The SARFT is mulling a set of policies to help the industry pull through this tough transitional period, Zhang Hongsen, deputy director of the administration, had previously said without elaborating.

Current policies include a "domestic film month" that often lasts from June 20 to July 20, during which almost only Chinese films are shown in cinemas across the country.

In just three weeks after the "month" started, homemade films raked in 1 billion yuan, according to incomplete statistics.

"Painted Skin: The Resurrection", a Chinese fantasy-action film released on June 28, had grossed 516.6 million yuan by July 8.

It looks like this year's "domestic film month" will be extended through August, as Hollywood blockbusters that were set to be shown in Chinese theaters next month have been pushed off the August schedule.

However, protective measures are only temporary solutions. Film directors believe that China's film concept has lagged far behind that of Hollywood, according to a meeting held in April by the SARFT's film bureau to discuss how to cope with the impact of Hollywood blockbusters.

It is a phase that is inevitable for China's film industry, which needs some time to gradually grow and mature, said film director Wan Li.