Chinese state-owned Shanghai Film Group Corporation (SFGC) is setting up a joint venture with UK-based finance house Nations Trust to invest in film production, post-production and an animation production centre, SFGC president Ren Zhonglun confirmed today.

The two sides had quietly signed a Memorandum of Understanding (MoU) in February to jointly develop film production and distribution, and also renew the existing Chedun Film and TV Shooting Base, according to Ren.

Nations Trust, a private sector economic development initiative, has raised initial funding commitments of $800m for the joint venture, which Ren said should commence by the end of the year depending on the progress of negotiations.

The five-year project involves three parts: the expansion and renewal of Chedun, a SFGC property located in the outskirts of Shanghai; development of post-production and CG animation facilities, and the launch of a movie entertainment theme park tentatively titled 'East-meets-West'.

The first and second parts of the plan will take approximately two years to complete, according to Ren, while the third part will need more time and investment.

SFGC recently co-produced Ang Lee's Lust, Caution and the Jay Chou vehicle Slam Dunk. Lust, Caution was partially filmed at the Chedun base, which features 1930s colonial Shanghai scenery, and was also used as a location for Wong Kar Wai's 2046 and Stephen Chow's Kung-fu Hustle.

SFGC also owns the Shanghai United Cinema Circuit which is one of the top three cinema circuits in China.

'The growing Chinese film industry and the clearer regulations on the film and TV industries are two main reasons that help attract foreign investment in this project. We believe there will be more interest in this area,' said Ren.