After notching up a record-breaking $630 million last year, Chinese B.O. is making $800 million this year, but the biz still needs to grow in sophistication, Yu Dong, head of the Polybona distribution group, said on Sunday.

Speaking at a lively forum at the 12th Shanghai International Film Festival, Yu said work still needed to be done to improve the Chinese biz.

“We are short of things – we have limited kinds of movies. In the next five or six years we have to lay a foundation and cultivate a team of professionals. China is at an infancy stage,” Yu told the forum, called “Made in China: What Kind of Films Does the Domestic Market Want?”

“The market has developed but outsiders will come in soon – like the arrival of Hong Kong directors. Also Hollywood, which was initially scared but now sees opportunities for co-production,” said Yu. The Shanghai Fest, which runs until June 21, opened with He Ping’s historical action drama “Wheat” on Saturday.

Polybona was one of the co-founders in May of Cinema Popular, a shingle formed jointly with Hong Kong helmer Peter Chan and helmer Huang Jiangxin.

The issue of how to nurture the strong growth in the biz is one of the key themes at the Shanghai fest this year. The fest has long been seen as a provincial affair, but the growing influence of the Chinese film biz means it is of greater interest than ever this year to the biz abroad.

One of the main reasons why Chinese cinema is booming is improved distribution, and the forum featured presentations by two key cinema chain figures, Chen Guowei of Wanda Cinema Line and Wu Hehu of Shanghai United Line.

“After the financial crisis, the Chinese film business could become the engine of the world film business,” said Chen.

Wu said distribs were there to support film makers.

“Audiences are like flowing liquid, flowing into places that interest them. Our job is to make them flow into movies,” said Wu.

The age-old debate between art and commerce in the movies reared its head as top helmers debated how best to take the Chinese biz forward after years of strong growth.

Debating the knotty issue were Lu Chuan, helmer of the Nanjing massacre movie “City and Life and Death” and Ning Hao, director of 2006’s breakaway hit “Crazy Stone,” as well as Wang Xiaoshuai, critically acclaimed director of “Beijing Bicycle” and Taiwanese director Wei Te-shen, who scored a big surprise hit with “Cape No 7.”

Lu and Ning are both members of a select group of mainland Chinese helmers known colloquially as the “100-million Club” – directors whose films have made more than 100 million yuan ($15 million) B.O. in China.

Wang’s films are resolutely arthouse and there was quite a stir among the gathered film makers, producers and media at the Forum when he launched a broadside against his populist fellow panelists.

“These films have all made more than 100 million yuan at the box office but as directors they fail. People say I should switch to commercial films but I want to stick to art. I believe in art and I believe in culture,” said Wang.

“I’m thinking of a greater good,” said Wang, whose “In Love We Trust”

won a Silver Bear for screenplay at Berlin last year.

Unlike Hollywood where the helmer is often seen as another major figure in an overall production process that also stresses the role of the producer and the stars, China’s film business is still heavily focused on the director. They have the kind of power the great auteurs of French cinema had in their heyday and are often producer-distributor-helmer all rolled into one. Critics of the Chinese biz say the multi-tasking needs to end if Chinese films are to become more successful abroad.

Lu Chuan defended his work and said Chinese film makers needed to stop focusing so heavily on international film festivals and start thinking more about the huge market at home.

“Film makers are working in a changed market. Instead of deliberately separating art and commercial films, we should follow what the audiences want. The market is growing up and audiences are maturing,”

he said.

“Arthouse and commercial films are in there together. What we acutely need in China are films like “The Godfather” or “Apocalypse Now,” he said.