BEIJING (AFP) ― China’s film industry has been “shaken” after the country’s cinemas were opened up to show more foreign productions, a government official said Sunday on the sidelines of a pivotal party congress.

China, which is set to become the world’s second-largest movie market this year, agreed in February to lift its quota of foreign movies per year from 20 to 34 in a move long sought by Hollywood.

“This has brought handsome profits to the American film industry but has also posed pressure and challenge to the Chinese film industry,” vice minister Tian Jin said at a press conference on the sidelines of the Communist Party’s 18th congress in Beijing.

“Domestic films are facing great pressure,” said Tian, who is the party member responsible for radio, film and television.

“The objective reason is that more foreign films in the Chinese market have dealt a blow to domestic films, and the subjective reason is that the domestic film industry needs to be more competitive,” he said.

He urged domestic filmmakers to “enhance creativity.”

Scores of cinemas are being built across China to cater to growing demand which has seen box office takings of more than 13 billion yuan ($2.1 billion) this year until the end of last month ― up 40 percent from the same period last year, Tian said.

But the domestic industry’s takings were just 40 percent of that total, which was “much lower than last year,” he added, without elaborating.

Tian denied that Beijing had imposed restrictions on the scheduling of foreign films in China.

“The release schedule of films is purely a market act,” he said, responding to a question about a ‘month-long restriction’ on foreign films.

“The government will never impose a schedule to any film or release.”

China has shown foreign films for many years, but agreed to open its cinemas to more overseas productions in February following a visit to the U.S. by Vice President Xi Jinping last year.

The move was also forced upon China by the World Trade Organisation, although a 2009 ruling against Chinese limits on the import of films, DVDs, music and books initially brought little change.