In the 1970s there was 'ping-pong diplomacy', but these days Sino-US relations are more likely to be developed over a movie project than a table-tennis match. And with each new project, US producers are learning more - sometimes the hard way - about how to play ball with Chinese film authorities.

Over the past year, several major US-China co-productions have been completed with relatively little trouble.

Family adventure The Forbidden Kingdom, for example, shot all around China last summer as a 'full' co-production between Casey Silver Productions, Relativity Media and Huayi Brothers. The project, says Casey Silver, 'went extremely smoothly'.

'Full' co-productions are classified as local Chinese films and are not limited by the import quota on foreign films. 'Assisted' co-productions, in which Chinese companies provide location or production assistance tend to have an easier time with the Chinese censors but are not guaranteed a Chinese release.

Thanks to less expensive local labour, the $55m Forbidden Kingdom 'looks like it cost two or three times that', Silver says. And the involvement of Huayi Brothers helped ensure a Chinese release for the film (distributed elsewhere by Lionsgate and The Weinstein Company) that produced a gross of more than $20m in its first 10 days.

Setting up Universal Pictures' The Mummy: Tomb Of The Dragon Emperor as an 'assisted' co-production proved slightly more 'tricky', concedes director Rob Cohen, but only because it involved finding ways for a major US corporation to work with Chinese entities. The studio employed intermediary Bill Kong of Hong Kong-based Edko Film to help set up a three-month Chinese shoot for the big-budget action-fantasy sequel (set for an August 1 US opening and now going through the official screenings required for a Chinese release).

Cohen confirms a few lines of dialogue - relating to the imperialistic ambitions of the story's villain, a resurrected Han Emperor played by Jet Li - were changed at the behest of Chinese authorities. If the changes had 'affected any core value I had for the movie', Cohen says he would have fought them. But with the lines concerned, 'I could see how if you had a certain mindset you could misinterpret (them). And we're making The Mummy, not The Rape Of Nanking. Politics is not what it's about and shouldn't be what it's about.'

Shanghai refused a permit

Not every recent US project, however, has found China easy to navigate. Mikael Hafstrom's period drama Shanghai for The Weinstein Company and Phoenix Pictures, had conducted three months and $3m worth of pre-production work when it was refused a permit to shoot in China in February.

Producer and Phoenix chairman Mike Medavoy says the problem stemmed from the way the script portrayed the citizens of war-torn 1941 Shanghai. Though the film has already begun shooting in London and Thailand, Medavoy says that after a recent trip to Beijing he is hoping for permission to shoot in China later this year.

'They explained their concerns,' says the producer of his meeting with Chinese film officials. 'I understood what their concerns were. We're having what you would call a comfortable discussion with them as to what we can and will do.'

Medavoy says he pointed out to officials that, ''If you are going to censor the script then we're all wasting our time because we're going to move on. If you're telling us that you have certain sensitivities to scenes, then we're willing to discuss those scenes.''

The Shanghai situation is seen as part of a wider clampdown by the Chinese authorities on what they consider to be sensitive issues in the year Beijing is hosting the Olympic Games. There are presently few US projects set to shoot in China.

'Any film about a conflict between nations, races or cultures is not advised,' says a Beijing-based film distributor.

Caution's tale

Ang Lee's steamy thriller Lust, Caution, set during the Japanese invasion of China in the Second World War, is also thought to have contributed to the new cautious climate. Although Lee delivered a China-friendly edit of the sexually explicit film to the mainland on its release in October 2007, an uncut version was available online. The politics of the film are also understood to have caused alarm.

Additionally, China's State Administration of Radio, Film and Television (Sarft) has banned the producers of Chinese film Lost In Beijing from film-making for two years, as the movie was deemed to have portrayed contemporary Beijing in a negative light.

In Olympic year, Sarft has revealed details of what seems to be a tighter censorship policy. It includes a 10-point ban on what Sarft deems the promotion in film of pornography, gambling, violence, cults and superstition or causing harm to national security and national pride and interests. What Sarft sees as perverted sexual activity, rape, prostitution, homosexuality, vulgar dialogue, music and sound effects that have a sexual connotation are also no-go areas. In particular, Sarft will not allow any kind of moral ambiguity, either in a film's plot or an individual character.

Zhang Xun, president of the China Film Co-production Corporation (Cfcc) says this list does not represent a new policy. Instead, she suggests Sarft has made its policies more explicit.

'They were in the existing regulations, called the regulations on film management,' Zhang says. 'There is no tightening of policies and no new situations for the co-production environment.'

Zhang confirms that in the case of Shanghai, the producers have discussed a revision of the script with Sarft and the project will reapply for shooting permission. 'The main issue falls on the illogical personality of a Japanese character in the story,' she explains.

A more tolerant climate

In practice, co-productions in China remain viable if producers know how to sidestep the censorship issues. From the end of 2007 to April 2008, China has approved projects such as Gordon Chan's fantasy epic Painted Skin; Disney's East-meets-West fantasy based on Snow White And The Seven Dwarves, set to star Jet Li; Hong Kong-based Sundream Motion Pictures and Huayi Brothers' Olympics-themed film The Champions; and Hong Kong-based Mandarin Film's biopic of kung-fu master Ip Man, to be directed by Wilson Yip and to star Donnie Yen. Korea's CJ Entertainment is also preparing to shoot a romantic comedy and a family film with Chinese partners later this year.

Fantasy and family films are safe choices. Contemporary films that say anything negative about modern-day China and historical pictures with any ambiguity are not.

Film-makers are optimistic a more open climate will prevail after the Olympics in August. 'I believe people will be more and more tolerant on film and cultural businesses,' says Beijing-based film-maker Chen Daming, who is preparing a Kurosawa-style period drama.

CFCC president Zhang is also reassuring. 'Our co-production policy has not changed, and in the future it will only become more and more open; it will not go backwards,' she says.

At the same time, Chinese film bodies appear to be eager to work with US producers. Han Sanping, head of state-owned film giant China Film Group, was recently in Hollywood for meetings that included what was billed as an 'intimate briefing' hosted by Loeb & Loeb law firm and Ironpond, a US and China-based entertainment venture with China-set projects in the works. Those who met with Han are not saying what was discussed, but pitching for US projects to come to China will have been on the agenda.

Currently, suggests Ironpond partner and president Teddy Zee, the relationship between Hollywood and the Chinese industry is characterised by 'a level of distrust on both sides. There's an interest in working there but the mechanisms haven't been in place for people to feel truly comfortable.'

Zee believes it is important for US companies to forge long-term relationships with China - as Ironpond plans - and to 'open up clear and consistent lines of communication' with Chinese officials.

'The Chinese government is no different in a lot of respects to the Hollywood studio system,' says Zee. 'They want commercial movies that entertain, that show people in a positive light, that aren't too violent or sexual. A lot of these concerns are concerns the studios have.'

China Top 10 Chinese-international co-productions (Jan 2007-May 2008)
1Assembly$36.2m (RMB260m)
2The Warlords$32m (RMB230m)
3CJ7$28.9m (RMB202m)
4The Forbidden Kingdom$26.1m (RMB181.5m up to May 18)
5Lust, Caution$18.9m (RMB137m)
6Kung Fu Dunk$16.4m (RMB113m)
7Three Kingdoms: Resurrection Of The Dragon$9.5m (RMB65.3m)
8Protege$9m (RMB65m)
9An Empress And The Warriors$6.2m (RMB43m)
10Flash Point$4.7m (RMB34m)

The Fixers: The co-producers to know when shooting in China

China Film Group Corporation

Credits: The Warlords (2007), Red Cliff (2007), CJ7 (2007).

State-owned company with government-level resources, which owns four cinema circuits and has an extensive distribution network.

Contact: Susan Xu, (86) 10 6225 4488

Huayi Bros Pictures

Credits: The Forbidden Kingdom (2007), John Rabe (2007), Assembly (2007).

Private company with experience of working with US studios. Renowned for its marketing team.

Contact: Felice Bee, (86) 10 6457 9338

Polybona Films International

Credits: Three Kingdoms: Resurrection Of The Dragon (2007), Brother (2007), Triangle (2007).

One of China's biggest private film-distribution companies, with a strong marketing department and experience working with Hong Kong film companies.

Contact: Jeffrey Chan, (86) 10 6551 0888

Chengtian Entertainment

Credits: Red Cliff (2007), Dangerous Games (2007), Storm Riders II (2008).

Private company which also owns Golden Harvest cinemas in mainland China and Hong Kong.

Contact: Sissy Yi, (86) 10 5920 5000

Shanghai Film Group

Credits: Lust, Caution (2007), My Blueberry Nights (2007), Kung Fu Dunk (2007).

State-owned company which also has its own cinema circuit and a distribution network.

Contact: Ellen Jin, (86) 21 62474711

Ningxia Film Studio

Credits: Painted Skin (2007).

State-owned film studio near to many scenic sites suitable for location shooting.

Contact: Pang Hong, (86) 971 615 4938

Xian Film Studio

Credits: A Chinese Tall Story (2005), Warriors Of Heaven And Earth (2004)

Like Ningxia, the state-owned Xian is also situated close to dramatic locations.

Contact: Li Feng, (86) 29 526 1147.