The new regulation, aiming at strengthening supervision of the industry, will go into effect as of February 1, 2002. At the same time, the country will abolish its current management regulation concerning the film industry which was issued by the State Council on June 19, 1996.

According to the new regulation, which comprises eight chapters and 68 articles, enterprises, governmental departments and social organizations as well as individuals are allowed to invest in film production, building new cinemas, and cinema reconstruction.

Apart from film studios, no domestic organization or individual is allowed to carry out film production cooperation with overseas film producers, according to the regulation.

Meanwhile, overseas film producers and individuals may cooperate with domestic film studios on film production, but are forbidden to solely conduct film production in China.