CO-PRODUCING IN CHINA: American actor Joseph Gordon-Levitt (right), best known for his role in the film The Dark Knight Rises, chats with a director at the Bund in Shanghai in April 2011 (FILE)

Money matters

Because China's policy allows co-produced movies to enjoy equal treatment as domestic movies in terms of distribution and scheduling, Hollywood is keen to expand the Chinese market in the form of co-productions, said Shao.

Hollywood moviemakers who co-produce with Chinese companies enjoy additional benefits and a greater percentage of total box office returns. Whereas imported films take only 25 percent, co-produced movies can reach upwards of 43 percent. That's why Hollywood movies began clamoring for the "co-production" label, said Shao.

For instance, Iron Man 2 raked in 172.7 million yuan ($27.2 million) in China. If calculated as an imported movie, the investor would have taken 43.17 million yuan ($6.80 million); as a co-produced movie, the investor receives 74.26 million yuan ($11.70 million).

Mindful of the gap in revenue, Walt Disney Co. and Marvel Studios announced on April 16 a deal for a co-produced Iron Man 3 with China's DMG Entertainment.

What's more, the restriction on the number of imported movies serves as another reason for Hollywood to seek co-production with domestic companies. The number of imported U.S. movies is limited to 20 in 2012.

"Hollywood movies that enter our market as co-productions can circumvent restrictions on the number of imported films," said Shao.

Moreover, co-produced movies can enjoy favorable tax policies. They only need to pay 10-percent income tax, whereas imported movies must pay customs duties.

Concerns

Hollywood producers came to China not to help the Chinese film industry but to earn bigger profits from the market, said Jean-Jacques Annaud, the renowned French director who chaired the main judging panel of this year's Shanghai International Film Festival in June.

Chinese officials and experts concur with the director's thoughts.

"SARFT meant to export Chinese culture and values to the outside world through co-producing movies with Hollywood, with hopes these movies could tell Chinese stories. But in reality, the movies told American-style stories and presented a stereotypical image of China," said Shao.

For instance, The Painted Veil, a movie co-produced by China and the United States in 2006, told a story of a young British couple who came to rural China in the 1920s. The movie presented to the world the image of a poor, backward and war-torn China.

"In the movie, foreigners come as saviors in the end," said Shao.

On the contrary, the U.S. side argues it is difficult for movies dominated by Chinese characteristics to be accepted by overseas audiences.

"Despite the added Chinese elements, upcoming movies like The Expendables 2, Iron Man 3, and Cloud Atlas are still dominated by American images," said Luo Juan, a film industry analyst. "According to the new regulations, whether these movies can be considered co-produced is still a question."

Future blockbusters

This year, the number of movies co-produced between China and the United States has surged.

At the Shanghai International Film Festival in June, plans for more than a dozen new China-U.S. co-produced movies were announced. They include Annihilator, featuring a Chinese superhero. The character was invented by Stan Lee, the 89-year-old creator of figures such as the Hulk and Iron Man. Other films slated for production include The Way of Rats and A Jewish Piano.

At this year's Beijing International Film Festival on April 23-28, Iron Man 3, The Art of War, Gods and a number of others were added to the list of China-U.S. co-produced 3D movies.

Tom DeSanto, a renowned Hollywood film producer and screenwriter who produced Transformers, signed on to join the production team of the planned China-U.S. co-produced fantasy trilogy Gods, a tale of a superhuman pantheon that draws on China's classic literature. The deal was signed between Chen Baiyi's Beijing-based Yi Shang Media and DeSanto. As lead producer, DeSanto will have the final say over all creative aspects of the trilogy.

The most captivating aspect of the cooperation is the chance to present a story about Chinese history and share it with the world through modern production methods. "It was great to exchange ideas in an open manner and allow for the collision of different cultures," said DeSanto.

Many cinemas are under construction in China, highlighting the domestic audience's growing appetite for movies. Films from the West should take this into consideration and try to satisfy the demands of the Chinese market, said DeSanto.

Email us at: yuyan@bjreview.com