BEIJING - Film industry watchers have speculated that China's annual box office sales could surpass North America's as soon as 2017.

In February, Chinese cinemas pulled in a record 6.87 billion yuan ($1.06 billion) in ticket sales, with monthly box office sales overtaking North America's for the first time, according to statistics from the film bureau of the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT).

China has become the second largest film market with its box office sales reaching 44 billion yuan ($6.8 billion) in 2015, up 48.7 percent from 2014.

However, there is still a huge gap between China's film industry and Hollywood.

"It is evident Chinese movies still lag far behind their Hollywood peers," said Luan Guozhi, deputy director of the film bureau of SAPPRFT.

Domestic films dominated last year, earning 27.1 billion yuan in ticket sales, or 61.58 percent of the country's total, but they still faced fierce competition from Hollywood.

Imported films are capped at 64 each year to protect the domestic movie industry, and 35 American movies accounted for 85 percent of revenues of foreign films.

"Our films have yet to make a breakthrough in terms of storytelling and technical competitiveness," said Luan.

Co-productions bring progress

One bright spot for the domestic film industry is cooperation between Chinese and US industry leaders and investors.

Chinese conglomerate Dalian Wanda Group announced it had acquired leading Hollywood film production company Legendary Entertainment for $3.5 billion in January.

Mammoth State-run enterprise CITIC Group established the first China-US joint film venture last April by working with Dick Cook, president and CEO of Dick Cook Studios (DCS).

CITIC plans to invest $150 million in the studio and become one of the largest shareholders, while also setting up a branch in Beijing.

The joint venture plans to make three films in the next three years at its Beijing studio, which will combine Chinese stories and Hollywood techniques.

CITIC announced last month that it is the sole investor in a Hollywood film, which will be directed by Oscar winner Paul Haggis and begin filming this year in Britain.

The film, a screen adaptation of the best-selling "Ranger's Apprentice" series by Australian author John Flanagan, is expected to rival the Harry Potter series in its success, the joint venture said.

"The years 2016 and 2017 will be crucial if our film industry wants to blend into the international market," said Guo Xiaoxian, chairman of Beijing Times Films Company Ltd.

In addition to investment and new technology, including 3D and high frame rates, a persistent pursuit of perfection is also crucial for China's movie industry to catch up, said Hollywood producer Don Hahn.

Success only comes after trial and failure, and film crews must harness their emotions to produce genuine and moving films, Hahn said.

Cheryl Boone Isaacs, president of the Academy of Motion Picture Arts and Sciences, said the core of filmmaking is exploring and expressing human nature.

Filmmakers should regard themselves as artists, break with traditional thinking and use different modes of storytelling, said Paul Haggis.

The most effective way to learn from Hollywood's experience is still through co-production, said Hou Guangming, president of the administrative council of the Beijing Film Academy.

In 2013, Chinese authorities doubled the number of foreign films for import and allowed foreign enterprises to invest in Chinese film production companies. China's film professionals have since learned a lot from US producers and distributors, and the market posted average annual growth of 30 percent.

In 2015, 12 China-US co-productions received administrative approval, with seven of them already having completed filming. Among the most successful was Kung Fu Panda 3, which grossed nearly 1 billion yuan in the domestic market and did well in North America.

China and the US film administration launched a talent exchange program in 2015, and so far China has sent two delegations to study at Paramount Pictures and Walt Disney Pictures.

Chinese film companies are also cooperating on other projects with Hollywood to build an entire industrial chain, covering film and TV education, derivatives development, movie theme parks and an international filmmaking base.