With hundreds of thousands of people in China's cities flocking to the cinema each weekend to check out the latest releases, it is not surprising that the country is now the third largest film producer in the world, after India and the United States.

According to the State Administration of Radio, Film and Television, the country's film industry produced 791 films in 2011, generating a total revenue of 13.1 billion yuan ($2 billion). Combined with new releases that are mainly imported from the United States, China's movie industry has become a big screen goldmine.

With these kinds of figures Jim Gianopulos, Chairman and CEO of Fox Filmed Entertainment, is one insider who is now taking notice of future prospects.

"The growth rate of China's film industry is amazing. In this growth rate, in five years China will be a bigger market in box office than the United States," said Gianopulos at the Shanghai International Film Festival held in June 2011.  

China's box-office receipts exceeded $1.6 billion in 2010, a 64-percent increase from the previous year. In 2010, more than 520 films were made, about as many as in America. The economic recession had a largely negative impact on the U.S. market, which saw the 2010 box office drop 5.72 percent to a 13-year low of $10.57 billion. What makes the growth in this industry surprising is that China only has 6,300 cinema screens countrywide, while the United States alone has 40,000.

China's box office revenues surged 44 percent to $908 million in 2009. Chinese films accounted for 56 percent of the take. In 2005, China's box-office receipts totaled just $230 million.

East meets West

A lucrative film production venture worth $220.5 million between Hollywood and China, which is set to make big budget Chinese movies aimed at audiences worldwide. While many may think that the source of this huge investment may have come from the many booming entertainment sectors in China, it is actually a construction company that has launched this moneymaking venture.

Paul Y. Engineering Ltd., based in Hong Kong, acquired the approval from its shareholders. The company aims to further market the lucrative Chinese film industry, whilst wanting to diversify the nation's cinema to appeal to cinemagoers across the globe. The construction firm will take a 50 percent stake in the company, which has been named Legendary East.

Hollywood production house, Legendary Entertainment, will take a 40 percent share, and the Beijing based Huayi Brothers Media Corp. will take the remaining 10 percent. The two investors are already familiar names in the movie industry, with Legendary Entertainment producing the critically acclaimed Inception and the Hangover franchise, while Huayi released one of China's most successful films, Feng Xiaogang's Aftershock.

The movies that are to be produced by the partnership will conveniently be allowed to bypass the import restrictions that are in force in China. Currently, only 20 foreign blockbusters a year are shown in theaters across the country.

Wang Peichun is a film and documentary director based in Guangzhou, capital of Guangdong Province. Having over 20 years of experience, he feels that it is only a matter of time until he sees investors from around the globe pump money into the industry.

"I can feel that the film industry in China is a financial [lucrative] ticking time bomb. The global recession has not slowed business down, and more and more investors will realize the potential that investing in China's movies has," Wang stated.