National box office takings rose 63.9 percent on-year as more Chinese than ever went to the movies, Tong Gang, director of the State Administration of Radio, Film and Television's State Film Bureau told the China Daily on Saturday.
"Ten billion yuan is just something to feel good about, but not to show off about," Tong was quoted as saying.
"So far, it has not been possible to compete with such films as 'Avatar' and 'Inception'. Far too few domestic films are well received by the public," he added.
Combined, Hollywood's sci-fi fantasy "Avatar" and thriller "Inception" represented about a fifth of China's total box office takings while the highest-grossing domestic film, disaster epic "Aftershock", earned only 673 million yuan.
"China still lacks good films," Tong said.
Beijing officials are increasingly stressing that China needs to expand its cultural industries, which account for less than two percent of the country's gross domestic product.
China made 526 feature films in 2010 -- up 15 percent from 2009 -- making it the third-largest film producer after Bollywood and Hollywood, the China Daily said.
But critics, including "Aftershock" director Feng Xiaogang, one of the country’s most successful commercial directors, say censors at the State Administration of Radio, Film and Television often block the kind of originality needed to make great films.
"This is not an era that can produce masters," Feng told Sina.com in an interview last year.
China currently limits the number of foreign films screened in cinemas to 20 a year but in March it is due to address the World Trade Organization's call for it to open up its film market.
Tong declined to comment on what impact that ruling could have on the domestic film industry, the report said.
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