What I've read is the stuff you're talking about is privately made or not sanctioned by the government which when found out gets stopped. Just like I heard that some small second or third tier city in China, their tv station did a Chinese version of the TV Show 24. All this stuff could be made but when the governement finds out about it they stop it. They control what is shown in movie theaters in China so many movies can be made underground but the government prevents it from being shown in China or distributed outside China for commercial business.
No, just no. All the movies and tv-series I talked about are very popular, widespread, and some of them are produced by CCTV.
There is pressure for China to change the rules. Because of how movies like Avatar, 2012, and Transformers making more money than any other Chinese film, Chinese filmmakers have been complaining because those rules prevent them from making those kinds of movies and considers it an embarrassment that foreign movies beat Chinese movies in China. Kung Fu Panda outraged Chinese filmmakers that it was an American movie company making a Chinese story and not them. And why they can't make those movies is because they're fantasy films breaking rule No.4.
For the last time, there are PLENTY of fantasy films in China. Plenty!
Also, don't take what Western media reports as the attitude of Chinese
netizens to be facts. Chinese netizens, like people on the internet everywhere, are a vocal minority. It's true that the Chinese animation industry sucks, and people may lament this fact after seeing Kung Fu Panda, but saying that Chinese filmmakers cannot make successful movies is just wrong.
Western movies make more money not because they're better in quality (which, since you mention 2012 and Transformers, you should be well aware of), but because these big-budget special-effects extravaganza are more fun to watch on the big screen, while other excellent and popular movies that don't use special effects (such as
Fei cheng wu rao) do not attract as many people to the theatre. (Did you know that movie tickets cost upwards of 60-100 RMB? Most working class Chinese would never want to spend that kind of money when pirated DVDs are available on the street corner for 2 RMB.)
The effects of censorship in China works differently from what you think. You have to remember that in China,
the Law is always flexible. When you're a big producer like Zhang Yimou, Feng Xiaogang, or CCTV, you can take more liberties than you could if you're a small, independent producer. Censorship in China is like a hill: if you're influential enough and you don't carry too much bagage, then you can move over it. If you're a small-time filmmaker, and you don't know the right people, then chances are, your movie is going to get shut down by the bureaucracy.
All that means it's the same people who are making all those movies, and obviously, they will keep making the same styles of movies.