China will allow more U.S. films to be screened in Chinese movie theaters and widen market access to the fast-growing Chinese audience for Hollywood, a move that has annoyed domestic filmmakers.

The agreement with the U.S. concerning issues related to films after their World Trade Organization dispute last year came during Vice President Xi Jinping's five-day U.S. visit last week.

"This agreement with China will make it easier than ever before for U.S. studios and independent filmmakers to reach the fast-growing Chinese audience, supporting thousands of American jobs in and around the film industry," U.S. Vice President Joe Biden said in a statement.

According to the agreement, the annual quota of 20 revenue-sharing foreign films in Chinese theaters will remain unchanged, but it allows 14 premium format films, such as 3-D and IMAX movies and similar enhanced format films, which will be exempt from the quota.

Also, the U.S. studios' share of their films' grosses in the Chinese market will rise to 25 percent from the previous 13.5 to 17.5 percent.

Chris Dodd, president of the Motion Picture Association of America, called the pact "tremendous news for the millions of American workers and businesses whose jobs depend on the entertainment industry."

China's box office has been growing at an annual rate of 30 percent since 2003, reaching $2.1 billion last year. It has become the highest-grossing overseas market for many Hollywood blockbusters, such as "Transformers 3" and "Avatar."

Chinese director Gao Qunshu said the agreement would bring more challenges for China's filmmakers, but in the long term he believed in the power of competition in an open market.

"With 14 more foreign films, the market space for local productions will further shrink," he said. "There will be pressure, but taking the changes as a motivation to make better films is the only way out. More 'lame' works will be driven out of the market."

Geng Yuejin, a senior insider of the theater business, welcomed the changes.

"A wider choice of films will attract more people to the theaters, which will boost the whole market, benefiting local filmmakers too," he said.

Qin Hong, chairman of leading privately owned film company Stellar Megamedia Group, called for the government to crackdown harder on piracy to protect local films against fiercer competition.

"Most local productions win over audiences by plotlines, not grand scenes – we are so far unable to create another 'Mission: Impossible 4,'" he said. "Films that do not have dazzling visual effects suffer more from piracy, because people tend to think they can enjoy them the same at home."

The agreement grew out of a WTO case challenging China's restrictions on the import and distribution of cultural products, which was won by the U.S.

The newest agreement will be reviewed in five years to see if it has functioned as envisioned, according to Reuters.

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