Yin said the law was a summary of experience from previous reform measures which have helped create the success of China's movie market.

The draft also addresses box office fraud.

In late August, the producers of China's highest-grossing film, "Monster Hunt," were accused of faking screenings to boost their box office data. They denied any wrongdoing.

At a film forum in June, movie tycoon Yu Dong complained of box office fraud particularly in third-and-fourth tier cities.

The draft addresses this by proposing that all Chinese cinemas install standardized ticketing systems, and that those involved in skullduggery should be fined up to half a million yuan or see their business license revoked.

Then there is piracy. A quick search through China's social media platforms will turn up pirated movies shared freely by Internet users, with many of the movies still on show in cinemas.

To this end, the draft law explicitly forbids stealth video recording of movies in theaters.

Aside from piracy challenges from the public, Chinese filmmakers have long walked a fine line between creating quality films and violating Chinese film review rules, which many say are too vague.

That's why the new law will order regulators to formulate and publish clear criteria for their reviews.

It has been more than 12 years since film legislation was first raised in 2003, when China relaxed the number of imported films allowed to be shown in cinemas each year from 10 to 20 and began to embrace more market-oriented reform measures.

To develop, China's film industry needs diversified genres -- not just blockbusters, but art-house movies too, said Yin.

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