BUSAN, South Korea: A Taiwanese romance has become the island's box office champion this year, a rare victory for Asian film over Hollywood blockbusters.

"Cape No. 7" has made more than US$9 million in the Taiwanese capital, Taipei, as of Thursday, beating "The Mummy: Tomb of the Dragon Emperor," "The Dark Knight" and other American movies, Taiwanese film official Bill Chang told a film policy conference Saturday on the sidelines of the Pusan International Film Festival in South Korea.

The result marks the first time in more than 20 years that a Taiwanese film has earned more than Hollywood movies in the island, with the exception of Oscar-winning Taiwanese director Ang Lee 's spy thriller "Lust, Caution," which was a U.S.-China co-production, Chang said. Lee is also now based in the U.S.

"This is such a wonderful development," Chang said.

"The Mummy" has made US$7.3 million in Taipei and "The Dark Knight" US$7.2 million, he said. "Iron Man" is fourth with US$5.5 million, "Hancock" sixth with US$4.8 million and "Indiana Jones and the Kingdom of the Crystal Skull" seventh with US$4.7 million.

"Cape No. 7," made by unheralded director Wei Te-sheng without major stars, is about the romance between a Japanese teacher and a Taiwanese woman when the island was a Japanese colony in the 1940s — and a parallel modern-day love story.

Officials from other Asian countries who spoke at the film policy conference also said Hollywood films had invaded their markets.

In Malaysia, American imports accounted for 67 percent of the box office last year, with Malaysian movies taking 12 percent, Mohd Mahyidin Mustakim, director general of Malaysia's National Film Development Corp. said.

The Philippines has seen its local output drop from up to 220 films a year in the 1980s to 1990s to 15 or 16 annually due to the Hollywood invasion, piracy and the emergence of other forms of entertainment, Nestor Jardin, a board member of the country's Film Development Council.

Once the pride of Asia for its ability to fend off American film, the South Korean industry is also in decline.

In Seoul, seven out of the 10 biggest box office hits in the first half of the year were imports, according to the latest edition of the Korean Film Council's quarterly newsletter.

One exception is China, which limits the import of Hollywood blockbusters by setting an annual quota of 20 revenue-sharing foreign films.

La Peikang, deputy director general of China's Film Bureau, said Saturday Chinese films have made more money in the country than foreign films in the past five years. La said a record 402 Chinese films were released in 2007, a 22 percent increase from 2006.

He said China's movie theater industry is also growing rapidly, with 1,427 urban theaters in place by the end of 2007, 102 more than in 2006.

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