Partners Asia, Ltd., a Hong Kong-based media consultancy, told Beijing Review.

Integrated business approach

Disney's foray into the Chinese market, launched in earnest in 2005 after the opening of a Disney theme park in Hong Kong, includes a strategy for Internet programming. Disney established Steamboat Ventures in 2006 and opened a Hong Kong office to explore partnerships with online broadcast companies. So far, Steamboat has invested in three Chinese online start-ups. One of those partnerships is with UUSee, China's largest Internet TV operator and the only peer-to-peer network approved by Chinese authorities, according to Dow Jones.

The integrated business approach Disney is taking to the Chinese market is expanding to consumer products as well, such as books and merchandise, Couto said.

"It's likely they will use this whole model to make more locally-produced movies in China and push its business further," he said, adding that movies like The Secret of the Magic Gourd test the conditions of the market to see how far these partnerships can go without pushing the boundaries of the regulatory framework.

Chinese studios are meeting the flood of U.S. animated films head on, with partnerships like the one between Centro and Disney as well as a bid to raise capital through a new national exchange center for the animation, cartoon and game industry. Trading on the new exchange, launched by the Shanghai United Assets and Equity Exchange, began at the end of June. Thirty items, including publication rights of Chinese folklore cartoons in Europe, debuted on the market worth an estimated $4 million, according to Xinhua, China's central news agency.

The Chinese animation, cartoon and game industry has an output value of $2.36 billion per year and has a market demand of more than $7.9 billion a year, said Xinhua.

Kai-lan to Teach Mandarin to U.S. Tots The success of American animated films in the Chinese market may now make way for the success of Chinese-flavored content for American children. Viacom Inc.-owned Nickelodeon announced on July 13 a new program for its fall Nick Jr. line-up called Ni Hao, Kai-lan. The half-hour, animated series is aimed at teaching Mandarin and Chinese culture to children aged two to five years old. The show is Nick Jr.'s first series to feature a Chinese-American family and follows the life of a five-year-old girl named Kai-lan. The universal themes of taking turns, disappointment and jealousy are addressed, according to a company release, with traditional Chinese touches like dumplings, lanterns and Lunar New Year celebrations. Another bilingual series by Nickelodeon, Dora the Explorer, has already paved the way with its highly popular mix of Spanish and English content. Production of the series is being done with the help of Wang Films and the Wang Studio in Greater China, according to the release. The creator of the show is Karen Chau, a Chinese-American woman who based the series on memories of her own childhood.