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Chinese director Zhang Yimou waves as he poses for the media during a news conference for his opening film "Under the Hawthorn Tree" at the 15th Pusan International Film Festival in Busan, about 420 km (261 miles) southeast of Seoul, in this October 7, 2010 file photo. [Photo/Agencies]

"If Zhang and Chen's income in 2012 exceeded two times the average yearly income of local people, they will pay additional fines, which is one or two times the average yearly income," Chen said.

"Compared to Zhang's income, the amount of money is not large," he added.

In 2012, the average yearly income of Wuxi residents living in urban areas was 35,663 yuan.

An authority with Wuxi's commission of population and family planning who spoke on condition of anonymity said that it is difficult to investigate celebrities' incomes because of the country's faulty taxation system, and Zhang, therefore, may not be fined in accordance with his real income.

"The commission is urging Zhang to declare his real income for the years when his three children were born in order to calculate an accurate fine," the source said.

Southern Metropolis Entertainment Weekly reported that Zhang, 62, had at least seven children by several women - an ex-wife, two mistresses and Chen, a former dancer who is 31 years his junior.

In the statement posted on the studio's micro blog, Zhang denied that he had seven children and said that "some people with ulterior motives" followed his children for two years and fabricated rumors that "severely interfere with the daily lives" of his family members.

The incident has caught public attention more than other cases of family planning violations as it exposes the social divide between rich and poor and fuels concerns that the policy has lost its constraining effect on celebrities, experts say.