Promotional material for Operation Mekong Photo: IC

Chinese filmgoers buy tickets below a banner for the movie The Mermaid at a cinema in Central China's Hubei Province in 2016. Photo: IC

Long anticipated by those working in the Chinese film industry, China's Film Industry Promotion Law finally came into effect on March 1. With this being the first national law aimed at regulating the film industry in China, many film veterans have high hopes that it will provide for the continuous prosperity of the Chinese film industry.What does the law hold for the future of the Chinese film industry? How will it influence Chinese films' global standing? These are some of the issues that need to be examined with a clear mind.US films established a dominant position in the global film industry long ago, making Hollywood a household name for filmgoers around the world.Hollywood has an annual share of around 80 percent of the global film market. Data shows that in 2016, global box-office revenue reached $38.1 billion, of which Hollywood films contributed $28.9 billion, or around 76 percent.Currently there are only four other nations in the world whose own films account for more than half of the box-office share in their home markets: China, Japan, India and South Korea.These four nations have certain things in common: They are all Asian countries, have distinctive national cultures and, most importantly, have strong domestic film industries.In comparison, the market performance of European films has not been that promising. For example, in 2016, France only saw five of its domestic films rank in the top 25 highest box-office films in its home market. The same was true for German films in the German market, while Italy only had four in its home market, the UK three and Russia two.From a global perspective, for the foreseeable future, Chinese films are the only force that can rival the dominant position of Hollywood.With its long history, rich culture and well-established film industry, Chinese film has a well-spring of resources to draw upon to develop films.At the same time, China also has a gigantic film market. From 2005 to 2015, the box-office revenue of Chinese films maintained an annual average increase of 30 percent. In 2005, box-office revenue in the Chinese mainland reached 2 billion yuan ($289 million), about 2.8 percent of what the North American box office ($8.84 billion) earned that year. However, in 2016, the Chinese mainland box-office revenue reached 45.71 billion yuan, making it the second highest box-office take in the world that year after the US' $11.4 billion.China has an enormous domestic market, which is the comprehensive embodiment of population and economic strength. This market is equal to combined markets of the UK, Japan, India and South Korea, who respectively rank from third to sixth place in terms of global box-office revenue.The Mermaid, the sci-fi romance film that screened during the Spring Festival period in 2016 set a new record by bringing in 3.39 billion yuan to become the highest-earning film in China. This milestone demonstrated that the Chinese film industry is capable of producing a blockbuster film on a budget of $100 million.Another advantage Chinese films have is their close relationship with audiences in China, who deeply favor domestic productions.Many middle-aged or elderly Chinese may remember the crowds that used to form at ticket offices during the 1970s and 1980s. Now, after a slump during the 1990s, Chinese audiences are once again enjoying Chinese films, although there is still a lot of criticism.Despite the fact that some people believe Hollywood films are superior to domestic works, an increasing number of Chinese moviegoers are becoming fond of Chinese films that use "our language" to talk about "our feelings and stories."This trend is reflected in the box-office share domestic films have acquired over the years.During the 12 years from 2005 to 2016, domestic films held onto a 50 percent market share, except for 2012 when the share was 48.46 percent.In 2016, a year when film market growth had slowed considerably, the market share of Chinese films still reached 58.33 percent. That same year, 14 domestic productions made it into the top 25 highest earning films of the year.Chinese filmmakers and film studios need to be aware that Chinese audiences are their strongest supporters. Any Chinese film production company that keeps this in mind is sure to become a world-class cultural enterprise.Of course, Chinese films have their problems and shortcomings and there are a lot of things that need to be done to develop the industry. There are three pillars that will be crucial: better quality films, a more regulated market and a broader mind.Above all, the core of the film industry is filmmaking. If China does not produce enough quality films, the fast growing number of screens will only serve to make money for Hollywood.So what constitutes a quality film? To meet this standard, Chinese films must contain the right ethics, have humanistic concerns and stick to their principles.In their pursuit of popular IPs, Chinese studios have fallen in love with new idols and romantic films that cater to young audiences, instead of focusing on how to tell a good Chinese story and increasing their technical skills, incubating talent and increasing creativity.Ensuring that the market is well regulated is also an important factor for the industry's success. Related government departments should more severely punish behavior such as box-office fraud, copycat productions and the use of films for capital speculation. They should also establish higher standards for facilities and services in cinemas.It is also important that society as a whole be more tolerant of films that try to tackle challenging topics or new filmmaking styles. 2016 action crime flick Operation Mekong was a successful example of this type of tolerance. The film created more realistic image of Chinese policemen who have human faults, while in most films Chinese policemen are presented as perfect and boring.Over the past 10 years, the Chinese film industry has achieved many seemingly "impossible" milestones. We should have faith that the new Film Industry Promotion Law will ensure more "impossible" dreams will be realized in the future.The author is a film studies PhD candidate at Beijing Normal University