At the 15th Beijing Student Film Festival, Zhang Hongsen said these efforts would allow films to be sold as commodities on the market, break up filmmaking monopolies and help to raise overseas funds for filmmaking.

This, in turn, would lead to more commercially successful films in China's cinemas, he said.

"Chinese film workers have liberated their minds and produced many films acclaimed by audiences" in the 30 years since China began opening up to the West, he was quoted as saying by local media Saturday.

"In particular, after China adopted the policy to commercialize its film industry in 2003, the box office takings of Chinese films have risen by 20% annually," Zhang said.

However, he conceded that commercialization was just beginning and many aspects of the industry were still under the planned economy.

Last year, Zhang caused a stir when he slammed a number of "shameful" arthouse movies, including helmer Li Yu's "Lost in Beijing," which he said took advantage of ideological differences to chase international awards.

He said at the time, "Our directors should consciously defend the honor of the motherland."

China produced 402 pics last year with a B.O. of $434 million.

"Among the 402 films, only a few had a clear plan of investment, production and marketing. We lagged far behind the United States, Japan, the Republic of Korea and India," he said.

"We will show more respect for the art of film and the film market as well as the demand and choices of the audience and filmmakers."

© Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

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