Two men walk past pirated DVDs on sale on a sidewalk in Beijing  (10 March 2006 file photo)

An American film group has said China needs to allow more market access for foreign films to fight widespread piracy in the country.  The Motion Picture Association says piracy in China is the worst in Asia, costing over $2.5 billion a year in lost sales, most of which would have gone to Chinese filmmakers.  Daniel Schearf reports from Beijing.

The Chinese government allows only 20 foreign films into the country each year.  The Motion Picture Association, which represents seven major American film studios, says that limit creates room for pirates to fill the demand.

Michael Ellis is the head of the MPA's Asia-Pacific division.  He told reporters in Beijing on Thursday that 93 percent of films sold in China are pirated copies and more than half of the sales lost would have gone to Chinese film studios.

Ellis says China needs to meet the needs of both foreign and domestic filmmakers.

"We don't have market access.  And there needs to be that recognition that in spite of all the really good work that people are doing it's not really going to pay dividends unless you open up the market and you build a legitimate film industry here for everybody's benefit…Until that happens you will always have this vacuum through which pirates will just plug it with pirated products," Ellis said.

Ellis also says the way China enforces anti-piracy laws is not transparent and even when the government closes down illegal manufacturers and retailers, they soon reopen.

He also says China should eliminate the requirement that copyright violators make a profit of at least $12,000 in pirated goods before they are prosecuted.  

"We don't want any threshold," Ellis said.  "If someone is selling pirated products they're engaged in commercial piracy…there really should be no limit on the number of products that are seized or sold or the amount of revenue they're generating."

The MPA is also concerned about government control of movie distribution. Those films that make it past government censors have to be imported and distributed through quasi-government agencies. 

Ellis says the box office share of profits for foreign films in China is the lowest in the world at only 13 percent, while the world average is 50 percent.