China may overtake the U.S. as the world's biggest film market by 2020. The Asian country continues to make its way into various sectors, proving itself to be an industry leader and solidifying its position as a global superpower.

Estimates made in Ernst & Young report reflect China's continuous moves toward building its entertainment industry, as it seeks not only to screen more films nationwide but also to become a movie-producing power player.

China's largest entertainment group, Dalian Wanda Group, owned privately by a real-estate mogul, bought out U.S. theater company AMC Entertainment Holdings Inc. this year for $2.6 billion, according to the Guardian.

China's expansion plans include adding several thousand theaters across the nation over the next five years.

But to surpass the very established American film market, China needs to begin making high-caliber movies with international appeal that are produced locally and made by Chinese. Even Chinese -- at least ethnically Chinese -- celebrities need to break out of pigeonhole roles as martial-arts experts.

However, Hollywood is starting to buy into China's growing industry. The third installment of Marvel's superhero franchise "Iron Man" was co-produced by a Chinese company. As the movie is prepared for its release, China will be involved in its marketing, keeping a larger proportion of its revenue, and screening it in theaters for a longer period, compared with other foreign movies.

Having a Chinese name behind the movie will also likely help ticket sales. Although "Iron Man 3" already has a loyal fan following -- like most superhero franchise movies -- additional fans will likely be made out of citizens excited about China's producing prospects.

Bloomberg News cited Chris Fenton, general manager of the Chinese media agency DMG's North America offices, as saying that Chinese viewers are eager to see their country compete in the industry.

"If the Chinese feel it's something of theirs, it helps in every way possible; it becomes relevant to them," he said.

DMG may be a channel through which Hollywood can begin tapping China's market. This year's science-fiction time-travel blockbuster "Looper" was financed in large part by DMG. Scenes in the script, which originally took place in Paris, were changed to Shanghai after DMG came on board. This move toward a Hollywood-style production and away from traditional scenes of kung fu, lanterns, and old imperial cities is a central aim for the Chinese film industry.

One young Chinese filmmaker, Xue Yin, or Fox, has a front-row ticket in the budding industry. She sees the potential of the market, assuming some obstacles are overcome.

"Everyone feels like China is going to take over the world. So Chinese filmmakers, especially those who speak English, have a great advantage working with major Hollywood studio films in the future," she said.

However, China's deeply rooted culture could be its biggest disadvantage.

"Culture and language barriers are still the biggest challenges for Chinese filmmakers. [Chinese director] Feng Xiao Gang has great humor for his films, but those are inside jokes for [the] Chinese that if translated may not be universally funny," Fox said.

Additionally, Fox said she thinks that the Beijing central government should relinquish some control over the industry. The Chinese Film Bureau still has many restrictions on the content and degrees of vulgarity that a movie can have, but without an official ratings framework like the U.S. Motion Picture Association of America system.

"What steps do they need to take? Well, that's a question of when the Chinese Film Bureau will embrace more sex scenes and more curse words on screen or agree to show Chinese characters as villains in co-production films," Fox said.

Fox could be referring to movies such as "Men in Black III" and "Pirates of the Carribean: At World's End," which had scenes of Chinese actors playing villains that were cut from the screenings in China.

Although original Chinese films reaching Hollywood blockbuster success may occur closer to the year 2020, the Chinese film industry between now and then will continue to capitalize on providing soundstage, visual effects, and other post-production resources, as well as raking in profits from Hollywood co-production investments.