Beijing-based productionoutfit Laurel Films, French producer Rosem and French sales house OnomaInternational have struck a three-way agreement to produce and sell a slate ofChinese pictures.

The trio worked together on Day And Night (Ri-Ri Ye-Ye) a rags toriches tales set in a mining town byChinese auteur Wang Chao. The film was shot in Mongolia late last year and wasproduced by Laurel's Fang Li and Rosem's Sylvain Bursztejn, and featured on thedebut sales slate of Pascal Diot's Onoma.

"We have formed an openended agreement to produce a slate of films for the Chinese and Asian market,these will be both art-house and commercial," said Bursztejn. "There are manyfactors that put the Chinese theatrical market on course for huge growth in thenext three years," said Fang. "Years of censorship means that the real talentlies at the end of the scale. We aim to unearth them and get them seen by theirhome market.

The financial arrangementssee Laurel and Rosem providing local cash, while Rosem also brings ininvestment from France's Fonds Sud cultural pool and the backing of Europeancultural broadcaster. Onoma will put up minimum guarantees. Initially, budgetswill be kept below $2m. Distribution for the films will be arranged on apicture-by-picture with China's growing band of private sector distributors.

First to shoot is Summer Palace by Lou Ye, director of Suzhou River and last year's Cannescompetition film Purple Butterfly. Itis the story of a woman and her exiled lover who come to terms with the upheavalsin of China and shoots from next month.

Next up is the JiangWen-starring Dam Street , a drama which stretches over 20 yearsdirected by Li Yu, who previously made Berlin Forum film Fish And Elephant.

Biggest budget picture onthe slate is the Bursztejn-directed Berlin-Shanghai,an English-language about a Jewish man who escapes the Nazi killings of 1938 bytaking the Trans-Siberian railway to China. It will shoot in late 2005.

Also on the initial slate isthe next Wang Chao, Twice Life, adrama about a woman who pretends to be her amnesiac husband's mistress.