China is on the cusp of a golden era of growth, which will see it become the world’s second biggest film market and bring with it more market liberalization, according to an upcoming report by the China Film Association Research Center.

As well as becoming the biggest film market after the U.S., by 2015 the market will see an end to monopoly control by state-owned groups; cinema construction will spread to smaller cities; there will be better branding of cinema chains; and animation will become a big part of the biz.

The forecasts could be a reference to a loosening of the quota system, which allows roughly 20 overseas pics a year into China, but which biz figures insist is becoming less strict.

“The figure of 10 billion yuan ($1.54 billion) box office last year is one of the highlights of our report, but we are not only interested in the headline figure, but also the positive way in which the whole industry developed, and the focus on structure,” said Liu Haodong, director of the China Film Association Research Centre and chief editor of the report. The report is due for release in coming weeks and weighs in at a hefty 560,000 words.

Production, financing and cinema construction all expanded in 2010, and the scale of the industry grew significantly, according to the report, while 3D and Imax technology also performed strongly.

The report notes that auds are changing, with more middle-aged Chinese going to films, whereas previously 20- and 30-somethings made up the bulk of cinemagoers.

Also, a flurry of mid-sized cinemas in central and western China are boosting the industry.

Film themes remain limited, said the report, which called for a wider selection of genres.

Zhou Tiedong, prexy of China Film Promotion Intl., said the report also shows that Chinese films currently have few markets abroad. “It’s time to start promoting overseas sales,” he said. “All the film productions which could go to the international market now are co-productions, and many are not representative of China’s industry. We have 526 film productions, and almost 500 of them are stopped at the gate,” he said.