China is already a huge market for American-made films, but looks to increase its purchasing power by expanding the number of American-Chinese co-productions in the coming year.  Chief among them is the Marvel movie Iron Man 3, which is currently filming.  However, a snafu occurred recently when questions were raised as to what exactly comprised a "co-production."  The two sides hashed it out at a joint film summit held at UCLA on Monday and things look prosperous for the future.Starring Robert Downey Jr., Sir Ben Kingsley, Gwyneth Paltrow, Don Cheadle, Guy Pearce, Rebecca Hall and Jon Favreau, Shane Black's Iron Man 3 is slated to open May 3rd, 2013.  Hit the jump for more on the American-Chinese co-production of Iron Man 3.THR reports that the American-Chinese co-production of Iron Man 3 is moving ahead as scheduled.  Recently, concerns on both sides had arisen as to the nature of what constitutes a co-production.  A legitimate co-production more evenly splits the box office revenue between the parties, but also shares the cost upfront.  The question isn't just a matter of a percentage of film time in a given location, or a number of scenes shot divided by the total number in the final cut; it's more complex than that.  Co-production status also factors in the hiring of natives (in this case, the Chinese) as both cast and crew.Normally, co-productions in China are used for films that are aimed at Chinese markets, ie  probably won't see a wide release stateside.  The problem is distribution.  If a studio wants to bring in the international box office bucks, it had better get it approved by the Chinese government for distribution in their country.  The only way to do that? Co-production.  Co-productions are considered "domestic" and don't need to be subjected to the rigorous importation process.  But lately, parties on our side of the pond have been scrimping on the requirements needed to achieve co-production status, and the foreign studios are allowing it to draw in the ticket proceeds.  Case in point, Rian Johnson's Looper was a co-production of the U.S.-based Endgame Entertainment and China's DMG Entertainment.  The film included the Chinese actress Xu Qing and several scenes shot in Shanghai, ones that only made it into the cut of the film shown in China (they didn't "test well" here).  So is this technically a co-production?The issue came to light again when the recent trailer for Iron Man 3 debuted and was conspicuously absent of any obvious Chinese influence or inclusion.  Was this another example of skirting the spirit of the law?  When it looked like Iron Man 3 wouldn't make it to Beijing before the end of the year, "Zhang Xun, president of China Film Co-Production Corp., which is part of the state-run China Film Group and oversees all official co-productions in the country, said it was looking doubtful that “Iron Man 3” would qualify and that no script had been submitted for approval.

“They have not applied for any co-production” status for “Iron Man 3,” she said. “If they have already finished filming in the U.S., it might be hard for such a movie to meet the requirement for a co-production. Because you cannot make a film with a few cast members from China and a few scenes in China and expect that to be a co-production.”

There's also the tricky dance of including a character named THE MANDARIN and pretending he's not of Chinese origin by getting Kingsley to play him.  Anyway, it seems as if things are back on course and Iron Man 3 is still expected to be a co-production.  At the joint summit, William Feng, the general manager of the Motion Picture Association’s China Office, said American filmmakers were going through a "learning process" and Xun herself squashed the "rumors" about problems circulating around the picture (please see her direct quote above...).  The group is forecasting thirteen American-Chinese co-produced films to be released in 2013, up from five this year.

An in-depth look into China's State Admission of Radio, Film and Television (SARFT), this issue and how this process has changed can be found here, with a follow-up here, from Beijing-based IP/IT lawyer and law professor, Stan Abrams.