Chinese elements can be found in many Hollywood movies, including Iron Man 3.

UK making headway

The buzz and the excitement about China is felt throughout the world, but it is countries like the United Kingdom that have taken concrete steps to forge strong cultural relations with China through a series of initiatives.

Nowhere is this more obvious than in London, where Electric Shadows, an initiative to forge stronger ties between Chinese and British cinema, is one of the most talked about events in entertainment circles.

Electric Shadows goes beyond the realms of ordinary alliances and seeks to build permanent bonds of friendship between Chinese and British filmmakers.

The first tangible results of the initiative were achieved after China and the UK inked an agreement recently to provide better financing options and easier market access to qualified co-productions from both countries.

Though China and the UK have similar co-production treaties with other countries, the latest agreement assumes significance as it helps British filmmakers reach out to audiences in the highly regulated Chinese film market.

China's current quota system allows the screening of only 34 foreign movies a year. Foreign production companies are allowed to retain only 25 percent of box office revenue, whereas co-productions are relatively unshackled as they are treated as domestic films.

It is forecast that China will replace the US as the world's biggest cinema market in the next 10 years, although experts indicate that it could happen much sooner. This is also the reason why more countries are keen on clinching deals with China, experts say.

Amanda Nevill, chief executive of the British Film Institute, says the co-production treaty with China, which has the largest growing film industry in the world, will be of great significance for the UK film industry, as it will pave the way for more collaboration. "An appreciation of each other's filmmaking culture is the foundation for commercial success ... We are starting to build an even closer collaborative relationship between our two industries to enable them to flourish."

Annual film production revenue in the UK was estimated to be around 1 billion pounds ($1.67 billion) last year, while British film exports were valued at over 1.7 billion pounds.

"The co-production treaty encourages and makes it easier for various countries to collaborate in a business context. Although the treaty is a government treaty between two countries, it encourages cooperation on a cultural and business level and makes it easier to forge contacts," says Julian Alcantara, producer of the UK-based Random Character Pictures.

The treaty benefits producers, investors and actors from both countries, Nevill says.

"What they need to ensure is that the films are a collaboration between a British producer and a Chinese producer. The two can even create a stand-alone company and it really does not matter who are the real investors," she says. "If it's a China-UK co-production, it would be eligible for British tax breaks provided it passes the cultural tests. For the cultural tests, it needs to incorporate British and Chinese elements.

"These elements could be behind the camera or in front of the camera, or to do with the story or to do with wherever the film is being shot. A proportion of the co-production's spending has to be used or consumed in the UK. That's the regulation."

China also has similar or even stricter requirements for co-productions, including stipulations that the main cast should include Chinese and the film should feature Chinese culture and investment.

"I think the cultural elements are important for both sides. If a country has to promote its image, then people and stories are obviously the best ways to do it," Alcantara says.

"So it's not just about China depending on Hollywood to tell Chinese stories. It's about China telling Chinese stories in the same way that the British tell British stories. So culture is always important."