Ticket revenue grew 3.7 percent year-on-year to 45.7 billion yuan in 2016, a dramatic slowdown from 2015's 48 percent expansion, according to official data from China's State Administration of Press, Publication, Radio, Film and Television (SAPPRFT).
Hollywood has a keen eye on China's potentially lucrative movie market, although access for its films is restricted.
But with China's yuan currency weakening against the greenback over the course of the year, the overall performance was even worse in dollar terms, falling from $6.8 billion to $6.6 billion.
The overall number of Chinese cinema-goers rose 8.9 percent, and revenue from international films increased 10.9 percent, SAPPRFT said.
While it still grew faster than mature markets such as the United States, China disappointed forecasts it could become the world's largest movie market as early as 2017.
"At least this year's box office wasn't zero or negative growth in the end," a commentary posted on the website of one of SAPPRFT's divisions said. "But this result, whether you're a movie person or outside investors, none will be satisfied."
Analysts have attributed the slowdown to a poor crop of domestic films, the end of growth-boosting ticket subsidies, and a crackdown on box office fraud.
Broader uncertainty surrounding China's economic outlook may also have weighed on consumers' willingness to splurge on movie-going.
Nevertheless, construction of movie theatres last year was robust, with 1,612 new cinemas built in China to bring the total number of screens to 41,179, more than any other country in the world, SAPPRFT said.
Booming box-office receipts have drawn Hollywood studios and a growing Chinese filmmaking industry into fierce competition for the Asian giant's movie market, which PricewaterhouseCoopers has projected will rise to $8.9 billion in 2019 -- outstripping the US.
In November China passed a restrictive and long-discussed film law banning content deemed harmful to the "dignity, honour and interests" of the People's Republic and encouraging the promotion of "socialist core values".
The new laws also propose fines for those who provide false box office sales data, a widespread problem as firms have been exposed pumping up ticket sales to generate marketing buzz.
