True to this comment, the highest-grossing film in China last year was "Lost in Thailand," a locally produced lowbrow, slapstick comedy.

While China has lots of good stories, it has too few directors dedicated to creating quality movies with integrity, according to Myul.

In recent years, new generations of Chinese directors have chased profits in China's cinemas.

"Box office seems to be the sole evaluation criterion for one's work. People feel embarrassed if their movie has not earned one hundred million yuan," said Chinese director Lu Chuan.

Chinese movies are though to be overly emotional, lacking in insight.

"Domestic movies are catching up with Hollywood levels. The point is the large gaps on the choice of theme and expression," said director John Woo, who headed this year's festival jury.

China lacks works concerning social reality, in Woo's view. The flipside is that foreign directors brought in to helm Chinese productions often don't understand local culture.

"Inject typical Chinese spirits while utilizing Western technologies," Woo recommended..

Bollywood director Rajkumar Hirani, a judge at the festival, takes hit drama "Slumdog Millionaire" as an example of a successful marriage between domestic and foreign film industries. "It had a Hollywood director but with Indian content. It was very connected to them, so they will see it."

Xinhua correspondents Zhao Wanwei, Shi Yang also contributed to the story.