Shinkai's "Suzume", among the contenders for the Golden Bear at this year's Berlinale film festival, has made a splash amid a global boom in Japanese anime.
But "Art College 1994", Chinese director Liu Jian's animated portrait of a group of art students in the 1990s, has also got the critics talking.
Screen Daily said it "evokes a specific time and a place so vividly that you can almost taste the stale cigarette smoke and cheap beer".
"The quality of (Chinese) movies is improving rapidly, and they're also able to build those unique characters that we have in Japan," Shinkai told AFP.
"So I think that sooner or later they're going to overtake us."
Until 10 years ago, Japanese anime creators were "very confident that they were creating the best and most unique animation movies in the world", Shinkai said.
"But I think that this has changed in recent years, and most of my peers think that way as well."
The global market for Japanese anime grew 13 percent to an all-time high of 2.74 trillion yen ($20 billion) in 2021, according to the Association of Japanese Animations.
But Chinese films are catching up.
"In recent years there are more and more Chinese animation films coming out and they are becoming more and more diverse, not only commercial but also arthouse," Liu told AFP.
"Many commercial Chinese animations are influenced by Japanese animation but they are starting to find their own style," he said.
- McDonald's and Michael Jackson -
"Art College 1994", based on Liu's own experiences as an art student in the 1990s, is also competing for the Golden Bear, to be awarded Saturday by jury president Kristen Stewart.
The film tracks half a dozen young people as they pursue their studies, caught between Chinese traditions and Western influences.
Deep discussions about French literature and German philosophy are held as the students contemplate the meaning of art and their place in the world.
Not-so-subtle signs of Western influence are everywhere, with McDonald's and Michael Jackson both putting in a cameo appearance.
The early 1990s was "a very special period... where art and literature were prospering not only in China but also worldwide", said Liu, 53.
"At that time not only students but also people outside the campus were talking about these kinds of topics. It was a very energetic period."
Liu himself studied painting at Nanjing University of the Arts and began making animations in 1995.
He now also works as a college teacher and said some of his students who were born in the 1990s or later had watched the film.
"They are very curious about that period because it's very different, they don't have cellphones or the internet at that moment," he said.
Liu's dark comedy "Have a Nice Day" was the first Chinese animated film to compete at the Berlinale in 2017.
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