Shanghai on Saturday opened its annual film festival packed with star power in acknowledgement of China's role as the second largest box office in the world.

The government-backed Shanghai International Film Festival is mainland China's premier event of its kind, though capital Beijing has tried to steal the show with its own film festival which marked its third year in April.

American director Oliver Stone made a return appearance, after attending the first Shanghai film festival in 1993.

"You're bigger and more exorbitant," Stone said, referring to the changes.

Local favourites like Hong Kong star Chow Yun-fat and Taiwan's Jay Chou, who played sidekick Kato in the movie version of "The Green Hornet" made appearances on the red carpet to promote upcoming films.

"This is the only category one film festival in mainland China," Teng Jimeng, professor of film at Beijing Foreign Studies University, told AFP.

"The rise of the Chinese film market, absolutely, is why the Shanghai Film Festival is becoming increasingly popular and important in the eyes of film makers."

British director Tom Hooper, whose films include "Les Miserables" and "The King's Speech" is heading the jury for the festival's main award.

Actor Keanu Reeves is also due to attend during the nine-day festival to promote his directorial debut "Man of Tai Chi".

China's box office surged 36 percent annually to $2.7 billion in 2012, behind only North America with ticket sales of $10.8 billion, according to the Motion Picture Association of America.

But foreign films in China come under an annual quota and face censorship by cultural authorities who excise content deemed politically sensitive or obscene.

Imports of foreign films into China on a revenue-sharing basis are limited to just 34 annually, though last year the quota was raised from 20.

In a recent case of censorship, Chinese theatres mysteriously yanked director Quentin Tarantino's "Django Unchained" in April then resumed showing the film a month later, apparently with cuts to a scene showing star Jamie Foxx nude.

In the latest James Bond spy thriller "Skyfall" -- partly shot in Shanghai -- authorities cut a scene showing prostitution in Macau, a special administrative region of China, and a line in which Bond's nemesis mentions being tortured by Chinese security agents.

Such censorship is one of the reasons why Shanghai's film festival lags behind others in the Asian region, which screen movies with more edgy content.

"They (Shanghai organisers) do encounter quite a lot of challenges in terms of picking the controversial, experimental stuff from the West. Hong Kong and Tokyo don't seem to have that sort of obstacle," said Teng of Beijing Foreign Studies University.

Shanghai's offerings include a collection of Oliver Stone films and a tribute to the early works of Alfred Hitchcock.

Asian films include a retrospective of the films of Hong Kong actor Leslie Cheung, who killed himself in 2003.