Jia Pingwa's novel Old Kiln set during the early part of the "cultural revolution" (1966-76) was sold to the French publisher Gallimard and has been a popular success. The company has also recently sold Concession by Xiao Bai to an Italian publisher.

"The hardest market is actually the English market because there are so many great writers in English so it is very hard for foreign literature to get in. The French, in particular, are more inclined to take foreign literature," she says.

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Lu, however, believes that the market for Chinese literature in both English and non-English speaking markets could be transformed by a novel that finally breaks though and defines Chinese literature to an international audience.

"We are trying to find that novel which gives Chinese literature a voice of its own, something that truly characterizes Chinese literature in people's minds," he says.

"The Scandinavians have done that, for example, with crime fiction but we have yet to do this."

Stephen Bourne, president of Cambridge University Press, the leading UK academic and scientific publisher, says the China market is now developing an edge even over India, an established English-language market.

The publishing arm of Cambridge University and which published its first book in 1534, first came to China 12 years ago and publishes only in English.

"China is growing fast and the momentum is continuing. The main problem in India is inflation and the cost of borrowing money at 14 percent," he says.

"A lot of the institutions that buy from us have to borrow from the banks and that is having an impact on their orders."

He also says books are becoming cheaper in China than in India.

"A book might be 35 yuan (4.30 euros, $5.50) in China and the same one in India the equivalent of 25 yuan but in terms of purchasing power parity the China book is cheaper and with inflation the India book is becoming more expensive all the time," he says.

With the Chinese obsession with technology, particularly iPhones and tablets, some see digital publishing as one of the major growth opportunities in China.

Digital publishing in China hit 137.8 billion yuan last year, 31 percent more than in 2010, according to GAPP. China is already the world's second-largest e-book market, making up 20 percent of global sales.

But some major foreign publishers such as Harper Collins are still wary about entering the China digital market. "We want to wait and see until the digital market is stable here," says Chou at Harper Collins. "We don't think the rules and laws are clear yet and we still have concerns about piracy."

Chou says there is an amateurish feel about the China digital market which would make it very difficult to establish a good business model.

"You get some Chinese books that are being offered for 2 yuan which is not really viable, certainly not for us. A lot of amateur authors are putting their work out there. So there is a messiness about pricing."