Chinese animation producers need to increase original script, improve production quality and industrial chain to seek stronger development of the country's animation industry, industry insiders have said.

China produced 385 TV animation works and 16 animation films in 2010, 50 times more than its output seven years ago, according to the recently released Chinese Animation Industry Development Report 2011, China's first authoritative report on the animation industry.

The core products' value in the animation industry quadrupled from less than 2 billion yuan ($308 million) in 2005 to 8 billion in 2010, noted the report, which was released during the 7th China International Cartoon and Animation Festival held in East China's Hangzhou city from April 28 to May 3.

China has surpassed the United States, Japan and the Republic of Korea to become the largest animation producer in terms of the annual output of animation works, according to the report.

But quantity is not everything, and China still has a long way to go in terms of the quality of their animation works, insiders said.

"In China, you often hear people brag about how many animation companies there are and how many minutes their works are. But for companies like Disney and Pixar, quality is what matters more", said Kevin Geiger, who worked with Walt Disney Feature Animation for 12 years and is now President of Magic Dumpling Entertainment.

Xia Lie, vice dean of International Ani-Com College of Hangzhou Normal University, said that "The script is the root of animation" and whether the industry becomes successful depends upon the quality of scripts.

"For Chinese animation to develop, we should promote the idea of pan-animation, which means that all the links, ranging from the animation production to distribution, should be integrated," said Song Qihui, of the cultural market division of the Ministry of Culture.

"A complete industrial chain should cover traditional sectors like publication, garment, toys, as well as emerging sectors such as animation design, games and development," said Song.

As for the profit model, China can learn from the US and Japan, but more importantly, "it should suit China's culture and national conditions," said Song.

"The animation industry is not like the manufacturing sector. The core of the industry is cultural creation," said Wu Jianrong, president of Zhejiang Zhongnan Cartoon Co, Ltd, whose export takes up 80 percent of China's total animation exports.

The Chinese government issued the Guidance on the Development of China's Cartoon and Animation Industry in 2004, which signaled that the  government would began to actively assist the industry.

In 2008, the central government earmarked 7 million yuan to support the development of original animation works. One year later the financial input had doubled, from which over 100 projects benefited.