SHANGHAI, Aug. 7 (Xinhua) -- U.S. film giant DreamWorks Animation (DWA) and its Chinese partners said on Tuesday that they plan to co-produce upcoming film "Kung Fu Panda 3," as well as build an "entertainment destination" in Shanghai.
The news was announced at a signing ceremony held in the city to launch a landmark Sino-U.S. cultural project titled "Oriental DreamWorks."
The two parties confirmed that the long-anticipated third installment of the blockbuster "Kung Fu Panda" franchise is slated to be released in 2016 by DWA and Oriental DreamWorks (ODW), a studio established by DWA in partnership with a trio of Shanghai-based companies.
DWA and three Shanghai-based state-owned groups -- China Media Capital (CMC), the Shanghai Media Group and Shanghai Alliance Investment Limited -- signed a deal in February to form a joint venture focusing on animation production, with the Chinese companies acting as controlling partners.
The first two "Kung Fu Panda" films enjoyed great success in the Chinese market, with the second film taking in 470 million yuan (74.6 million U.S. dollars) at the box office.
ODW is expected to produce its first original animated film in 2017. Jeffrey Katzenberg, CEO of DWA, said previously that there are seven different proposals being considered for the film.
Until then, ODW will work to release one to three films a year to keep up with the pace of other international animation companies.
In addition, the two parties signed an agreement Tuesday to establish the "Dream Center" entertainment zone in the West Bank Media Port, which is located in Shanghai's Xuhui district.
The zone, to be built with a total investment of more than 20 billion yuan, will be made up of theaters, restaurants and bars, said Li Ruigang, CMC's chairman.
The West Bank Media Port, with the "Dream Center" as its flagship attraction, is expected to see 20 million visitors a year, according to data provided by the district government of Xuhui.
Li said the two sides will strive to develop Shanghai into an international culture center.
"In the long term, we may bring more entertainment zones to other domestic cities or even build them abroad," he added.
Katzenberg was said to have "intense interest" in the entertainment zone project, a first for the California-based company.
The collaboration between DWA and its Shanghai partners, inked during Vice President Xi Jinping's visit to the U.S. in February, is expected to create new opportunities for both sides.
For Chinese domestic animators, who have suffered from an extended recession, DWA's entry into China will bring a chance to learn from the company's experience.
"The cultural industry should always target a global market. We're trying to adapt to global competition at our doorstep," said Xiang Yong, deputy director of the cultural industry research institute at Peking University.
The Chinese animation industry saw its heyday in the 1960s, when the film "Uproar in Heaven" was screened at renowned international film festivals. But now, the industry is struggling with a lack of both original ideas and professionals.
Some local animation firms said they are longing to learn from DWA's assets, such as its storytelling expertise and its world-leading 3D technology.
During his visit to Shanghai in March, Katzenberg said the Shanghai studio will focus on stories that "have a connection to the culture, history and literature of China." He also promised to bring the 3D technology that DWA has developed during the past five years to Shanghai.
The studio is also expected to give the U.S. animation tycoon a foothold in the promising Chinese market.
China has become one of the biggest film consumers in the world, with film industry revenues surging at an annual rate of 30 percent, said Zhang Pimin, deputy director of the National Bureau of Radio and Television Industry.
China is also expected to become the second country in the world to have over 10,000 movie screens by the end of 2012, following the U.S.
Some have said that the announcement of the "Oriental DreamWorks" deal has put DWA in a fierce race with its domestic rival Walt Disney, which began to build a theme park in Shanghai last April.
Nevertheless, Katzenberg and Li both claimed on Tuesday that the "Dream Center" project will not be a threat to the Shanghai Disneyland.
"The 'Dream Center' is not a theme park. It's different from any other large cultural project in China, including Disneyland," Li said.
In April, Walt Disney joined hands with Chinese IT giant Tencent and state-owned animation company China ACG Group Co., Ltd. to launch a research and development project aimed at nurturing the homegrown animation industry and training professional animators.
In addition, the U.S. film tycoon has made the upcoming "Iron Man 3" a joint production with DMG Entertainment in Beijing.
"The co-production of the film shows the importance of Chinese audiences to Disney," said Zhang Zhizhong, the company's executive vice president.