James Cameron's blockbuster film Avatar was wildly popular in China last year, earning more than US$200 million (Dh734.6m) at the box office, double the figure of its nearest competitor.
Yet many Chinese films also did well, with 17 earning more than 100m yuan (Dh56.5m), helping to lift the country's total box office receipts to 10.2 billion yuan, a 64 per cent increase on 2009.
According to official figures, the number of cinema screens increased by about a quarter last year to 6,200, and foreign operators such as IMAX are expanding their presence.
The film-making sector is expanding too, with the number of Chinese-made features increasing from 456 in 2009 to 526 last year, putting China's industry third behind Bollywood and Hollywood.
Also, the big Hollywood studios are looking at the Chinese market more enthusiastically as the most popular films gross dozens of times more revenue there than they would have in the not-too-distant past.
Yet, despite the success of the likes of Avatar and Inception, which also cleaned up in China, overseas film companies continue to face a major hurdle.
China has yet to comply with a World Trade Organisation (WTO) ruling two years ago that was aimed at lifting restrictions on the number of foreign films shown in the country.
The annual limit of 20 should have been scrapped in March this year, according to the WTO ruling, but it remains in force.
Additionally, distribution of foreign films remains in the hands of the state-owned China Film Group, and foreign studios take a much smaller cut of box office revenue than in most other markets.
Yet the gossip from Hollywood suggests pressure is being brought to bear and the limit could be lifted.
Tinseltown has a powerful new advocate in the shape of the former Connecticut senator Christopher Dodd, a one-time presidential contender who recently took over as chief executive of the Motion Picture Association of America.
According to the Los Angeles Times, insiders have said negotiations are taking place that could result in the quota being doubled, although in public Mr Dodd has been careful not to sound overly assertive on the issue.
Experts believe there is an enthusiasm in China for foreign blockbusters that can be met only if the authorities allow more of them to be shown.
"There's a big demand for Hollywood films in the mainland and Hong Kong," says Ian Aitken, an associate professor of film studies at Hong Kong Baptist University. "If there wasn't a quota [on the mainland], Hollywood would regard China as a huge new potential market."
Efforts to dismantle the quota could be complicated by the issue of whether the limit is simply a matter of trade protectionism or reflects wider concerns.
Prof Aitken believes the ceiling of 20 films a year exists because of concern over "western values and images and ideas and ideologies" coming in.
China may have opened itself up in many areas of trade, but in some respects, foreign influence remains limited in the world's most populous nation, particularly in comparison with some neighbouring countries.
Recent census data showed that less than 0.05 per cent of China's population is foreign, and for all the modernisation that has taken place, the effects of decades of isolationism under Mao Zedong have yet to be fully swept away.
Add to that the reality that the Communist Party of China has shown no sign of relinquishing its grip on power or taking even tentative steps towards multi-party democracy, and it is perhaps unsurprising that there may be concerns at the highest levels about western influence.
"With the authorities worried about the spread of western values of one sort or another, they will want to keep certain limits," Prof Aitken says.
One compromise he believes is for the quota to be relaxed for films such as science fiction works or those that are set in the distant past and are less likely to be ideologically problematic
That would mean more films allowed in, but Beijing would still tightly control what was let in.
The less-problematic films, including action adventures such as Transformers, are the western movies that Chinese people are in any case most keen to watch, says Dr Chen Junsong, a lecturer in marketing at the China Europe International Business School in Shanghai.
When it comes to more character-based films, Dr Chen suggests, Chinese audiences would rather see Chinese films. Allowing more western films into the market would therefore have "not much" effect on the local industry, he says.
One thing it would mean, though, is that local film-makers would be competing head-to-head with Hollywood, and this could promote the improvement in standards that the Chinese authorities have said they are keen to see.
This year the country's film bureau said "the development of genres still remains at the stage of simple imitation and duplication" and lamented that too few Chinese films achieved real critical acclaim.
For the moment, though, the "great film quota wall", as some have dubbed it, remains in place and the takeover that Hollywood has achieved in markets around the world has yet to be repeated in China.
