American sniper ... the Hollywood Reporter has described Monster Hunt’s central beastie, Wuba, as “either endearing and cute ... or simply creepy, depending on your tastes”. Photo: PR

It’s the locally-made film that has outpaced the best Hollywood can offer to become the highest-grossing movie of all time in China, with 2.428bn yuan (£247m) in receipts. But questions remain over whether live action/animation hybrid Monster Hunt secured the mantle on a level playing field.

State agency Xinhua announced at the weekend that Raman Hui’s film had overtaken Fast and Furious 7, which posted 2.426bn earlier this year, to hit No 1 on the all-time list in China. The fantasy has been a runaway hit in the world’s most populous nation, sitting atop the box-office charts for four weeks in a row and breaking numerous records, including the fastest film to hit 1bn yuan.

Monster Hunt’s plot centres on a coming war between rival factions of giant beasties, based loosely on Chinese myths about creatures who live in the mountains. While Hui, the Hong Kong-born co-director of Shrek 3, received much of his training in North America, the film’s success has been hailed as a sign that China can take on Hollywood at the box office and win. American-made movies routinely top the local charts, despite the state’s quota system of just 34 foreign movies a year. And observers have questioned why Hollywood films set in China, such as Dreamworks Animation’s Kung Fu Panda series, have performed better than similar movies made locally. Now China’s film industry has a response, though it might not be so simple.

Hollywood sites such as Variety have noted in their reports about Monster Hunt’s triumph that the film was released during China’s annual six-to-eight week blackout, known in Beijing as the “domestic film protection period”, during which few American movies are released. The lack of competition during the window meant Monster Hunt avoided going up against Hollywood summer blockbusters Terminator: Genisys, Minions and Mission: Impossible - Rogue Nation, all of which have performed extremely well at the world’s second-largest box office since their belated openings.

Variety also noted that Fast and Furious 7’s box office was recorded as $390m (£253m) in US currency, against $381m (£247m) for Monster Hunt at current exchange rates. The Chinese movie nevertheless comes out ahead in yuan because Beijing devalued its currency last month.

US sites have also begun to question the legitimacy of the Chinese box-office reporting system in recent months. The Hollywood Reporter said last week that nationalist propaganda film The Hundred Regiments Offensive had “stolen” box office from Terminator: Genisys after local cinemas were offered state incentives to deliver fraudulent reports. The US trade bible alleged that studio Paramount may have lost as much as $11m in receipts as a result. Its critic Elizabeth Kerr also handed Monster Hunt a derisive review in July, calling Hui’s film “a confused and confusing fantasy adventure” and “a sentimental dollop of easily digestible moral storytelling that doesn’t even rely on fully realised characters to make its non-threatening points”.

The film’s success comes at a sensitive time for Hollywood, which now expects to see its home North American box office overtaken by China’s in 2018, a full two years earlier than expected. At the same time, American-made movies have made more than $1.5bn at the Chinese box office in 2015, providing a welcome boost for the world’s most famous film industry.