HOLLYWOOD is making a beeline for China but it will miss the big box office payoff if it only tacks on superficial Chinese elements. Yao Minji reports on what Hollywood needs to do to realize its China Dream.

The fourth installment of "Transformers," one of the bestselling movie franchises in China, will include scenes at Beijing's Bird's Nest and the Water Cube and features six Chinese actors, including Li Bingbing, who played a minor role in "Resident Evil: Retribution."

Director Michael Bay and his "Transformers" are the latest in an increasing number of Western filmmakers lured to the lucrative and growing Chinese market.

"Of course we want a piece of that action. That's part of the motive to share in the second largest market," Sid Ganis, former president of the Academy of Motion Picture Arts and Sciences and now its vice president, tells Shanghai Daily.

"Years ago, China was all not that important when it came to distributing Western products. Now it's very important," he said in a recent interview during the Shanghai International Film Festival.

Ganis, an expert in publicity and distribution, played a major role in introducing Bay and Paramount Studios to their Chinese partner www.m1905.com.

In the past three years, it has become popular, fashionable, and, some say, necessary, to add some Chinese elements to major Western productions to be shown in China.

These include footage of Shanghai skyscrapers in the latest James Bond film "Skyfall" (2012), casting Chinese actresses, as in "Cloud Atlas" (2012), featuring Chinese culture, as in Keanu Reeves' directorial debut "Man of Tai Chi" (2013) and product placement of Chinese brands in "Transformers: Dark of the Moon" (2011), among other ways.

China's box office grew by 30 percent to 17.07 billion yuan (US$2.74 billion) in 2012. Last week, the 2013 revenue reached 10 billion, pushing the year's projection to more than 20 billion yuan.

The number of screens has been increasing, especially in second- and third-tier cities, at a rate of 5,000 a year, and industry observers expect it to reach a nationwide total of 25,000 within five years, second largest after the United States.

The incentive to appeal to the China market was enhanced with the agreement between China and United States, signed last February, to increase the quota of 20 imported films to 34 since last year, and the US share in profits from 17.5 percent to 25 percent.

Including Chinese elements has helped films get one of those 34 foreign movie slots and helped box office in China, since the audience likes to see familar faces, places and cultures in Hollywood blockbusters.

"Iron Man 3," a collaboration between Marvel Studios and China's DMG Entertainment, was a hot topic in China since the studios announced inclusion of famous Chinese actor Wang Xueqi and actress Fan Bingbing. The Mandarin, one of thee most famous foes in the comics, was changed to an obscure non-Chinese ethnicity for the film.

Chinese taste

Some say inclusion of Chinese elements and at times, modifications considering Chinese tastes, also help passing the censorship committee in the country, known to be difficult to please.

The superhero movie grossed more than US$1.2 billion worldwide and became the fifth highest grossing film of all time.

Its box office in China was the largest overseas, second only to the US domestic market.

Chinese audiences heavily criticized the movie, though, after they found out the three extra minutes with Chinese actors were specially edited for the China edition.

In the worldwide release, Fan never showed up and Wang had one line, saying, "Hello."

"If you want to grab money here, you have to do better," says an ordinary, frequent filmgoer, Jack Ma. "After a while, with so many Hollywood movies containing Chinese elements, it won't be so easy to get our feet into the theater with just seconds of a Chinese face and a special Chinese edition."

He says he hopes that "a true collaboration," a co-production involving cast and crew from both countries in the creative process, will develop very soon.

Such simplistic and "fake" collaborations, as some Chinese film industry insiders call them, are not enough anymore, as foreign studios compete for the huge market and the Chinese audience wants more meaningful Oriental elements.

"'Transformers 4' is not like those other movies that just stick in, all of a sudden, a Chinese person, that doesn't have anything to do with the story," Ganis says.

"The story not only includes China. China is part of the story and director Michael Bay wanted to shoot in China. It has got a lot of action, a lot of technology, but it has also got a very good story, which is the most important thing for a Chinese audience, and for all audiences."

Ganis, and many others, see such collaborations as not only a way for Hollywood studios to appeal to a Chinese audience, but also a way to familiarize a Western audience "to not be afarid of seeing a Chinese movie.""Now, they are afraid, because they feel that's so distant from me, that's so not my own culture. American audiences don't even like French movies, sometimes, not even Canadian movies, and we have to help them get used to Chinese elements," he said.

"Gigantic, massive projects like 'Transformers' will help the American audience to get used to Chinese faces."

Two-time Oscar-winning Best Director Oliver Stone agrees on the role of Chinese movie stars.

"You can't sell a Chinese movie to broad Western audiences until the West can accept a true love affair between the Oriental and the West," he said in a recent interview. "You have to let Western audience fall in love with Chinese faces."

He added that it is important to have good stories about people and their relations to make the connection between East and West and make a love affair possible.

Stone the director and Ganis the marketer both say there is no need for Chinese movies to adopt Western styles in order to get a Western audience.

Dropping overseas sales

As China's domestic film market revenue doubled since 2010, its overseas sales dropped dramatically, according to the 2012 Annual Report on the international distribution of Chinese movies, released by Beijing Normal University.

The report calculated an income of around one billion yuan from overseas sales of 75 Chinese movies to more than 80 countries and regions, a surprising 48 percent drop from around two billion yuan in 2011.

The report pointed out, from its survey of more than 1,000 overseas interviewees, that most foreigners still only know about the kung fu movies. More than half of them said Chinese films lack logic, are hard to understand and need better scripts and translations.

Shortcut to markets

"It [the introduction of Chinese films to a Western audience] can be done in a number of ways and a big part of it is marketing," Ganis says. "I have been working on offering more Chinese films for American audiences. We have to help them get used to it."

"It is a process and it takes time. We just have to be patient."

He recently watched a Chinese film, which hasn't been released yet in China, about the problems young adults face in Beijing and friendships among a group of young people. He is not releasing the name for now.

"That is very universal and totally acceptable by an American audience. They can relate to the same problems," Ganis says. "This is the kind of films I ask producers to pursue for Western distribution."

The desire for collaboration comes from both countries, as Hollywood studios see it a shortcut to the Chinese market and Chinese companies hope it will pave their way to the US market, where foreign films traditionally don't do well.

Bob Iger, CEO of Disney, said earlier that a co-production would be US studios' new strategy to appeal to the international, and in particular, the Chinese market.

A qualified co-production must satisfy Chinese government standards, including at least one third of investment from China and some Chinese actors in lead roles, among other requirements.

Qualified films mean the US partner's share of profits rises from 25 to 43 percent.

Growing interest

Many famous film directors have expressed interest in working with China. Luc Besson said he had been working on a collaboration between China and France.

Oliver Stone told Shanghai Daily he had been writing a love story between East and West and hoped to direct it.

Collaboration goes beyond making a film together.

Walt Disney Co is spending almost US$4 billion on a Disneyland theme park in Shanghai while a Dreamworks Animation partnership will build Oriental Dreamworks in Shanghai, planning a US$3.1 billion entertainment zone.

Dalian Wanda Group, China's leading commercial real estate developer and a major film distributor in China, acquired the second-largest US cinema chain AMC Entertainment Holdings Inc last year, becoming the world's biggest owner of movie theaters.