The draft of the law ming to promote the development of the Chinese film industry is being reviewed by China's legislature the National People's Congress (NPC), state-run Xinhua news agency reported.
The draw legislation includes rules stipulating people in the film sector to abide by laws as well as social and professional ethics.
The bill was submitted for a second reading NPC Standing Committee which sits from Monday to Saturday.
According to the draft, people working in the movie industry, including actors and directors, should strive for "excellence in both professional skills and moral integrity," and build good public images.
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Chinese film world was rocked by a series of scandals in the recent past as some actors were involved in consumption of drugs. A number of film stars including Chinese Hollywood star Jackie Chan's son Jaycee Chan were caught in drug scandals.
The draft law also stresses that film distribution companies and cinemas should not fabricate movie screenings and ticket sales or take other improper means.
Those involved in skullduggery will be liable for administrative punishments, including fines up to half a million yuan, business suspension or revocation of business licenses, the draft law said.
The new draft cancels government qualification approvals for film shooting while adds a provision stipulating that film authorities should issue archive-filing certifications or permits to prospective scripts or abstracts.
The revised version provides that films shall not contain any content preaching terrorism and extremism, and films shall be reviewed by at least three experts.