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BEIJING — China’s film industry is on track for astounding growth this year, with domestic movies more than holding their own in the face of competition from foreign pics. But the country’s indie distributors are still watching carefully to see the broader impact of the global financial crisis.

The Chinese pic market has grown 25% annually for the past five years, and B.O. is expected to exceed 4 billion yuan ($590 million) in 2008.

“This is the kind of growth few other film markets can attain,” says Cindy Mi Lin of Infotainment China Media. “Chinese-made movies have played a crucial role in the rise in box office receipts this year.”

Local pics such as “CJ7,” “Kung Fu Dunk,” “The Forbidden Kingdom,” “Red Cliff” and “Painted Skin” have all passed the 100 million yuan ($15 million) threshold, a crucial marker of success and something that few imports, including studio films, have managed. While this is partially due to regular blackout periods for foreign movies, it is also a sign of better Chinese product.

Bi Feining, director of international distribution at Huayi Brothers, says Chinese palates are expanding. “Some years ago ancient martial movies were quite popular, but it’s hard to say which kinds of films will attract people next year.”

The global financial crisis is a big concern for local distribs as they prep for the American Film Market.

“What worries me most is the impact of the financial crisis on the U.S. film market. Many independent film companies have shut down, and it has affected the market, so I’ll be going to see how bad the impact has been,” says Chen Yongxiong, chief operating officer of Polybona.

Indie distributors are particularly interested in digital distribution, but rampant piracy and illegal downloads mean they are proceeding cautiously. “We provide legal copyrights of our films to some Internet companies, and I hope in the future this legal way of distributing films will weaken the pirate and illegal download market,” says Bi.

2008 B.O.

$230 million (through June)

Top title

“Red Cliff: Part I” ($45.6 million)

Recent pickups

“Journey to the Center of the Earth” (China Film)

“Out of Control” (Polybona)

“Mei Lanfang” (China Film)