The first cinema city on the Chinese mainland funded by US Warner Bros International Theatres opened here on Saturday, representing a major step forward by the US entertainment giant in the Chinese film market.

Warner Bros has a 39 per cent stake in the 30 million yuan (US$3.63 million) investment in the Shanghai Paradise Cinema City located on the sixth floor of Xujiahui's Grand Gateway Shopping Mall.

The other two investors are Shanghai Paradise Corporation Ltd with a 51 per cent share and Hong Kong Guangyu Investment Co Ltd with a 10 per cent share.

Zhu Yongde, vice-president of the Shanghai Media Group (SMG), said Warner Bros will soon get a transfer of the 10 per cent share held by the Hong Kong investor, giving it a 49 per cent holding.

"The transfer agreement is in the process of approval," Zhu said.

He said the joint venture is a big co-operation effort made by the Sino-US entertainment giants.

"Shanghai's ambition is to play a leading role in China's film market by launching a venture with Warner Bros," said Ren Zhonglun, president of the Shanghai Film Group Company.

Zhu added SMG is negotiating with Warner Bros about new co-operation, saying "the projects to be launched in the future will be bigger." But he declined to reveal details.

Millard Ochs, president of Warner Bros International Theatres, said Warner has the intention to establish more advanced cinemas worldwide, including China.

Thanks to the Closer Economic Partnership Arrangement signed between the Hong Kong Special Administrative Region and the central government, Warner Bros is seeking preferential treatment for its further investment in cinemas on the Chinese mainland.

"We will apply to the Chinese Government for a 51 per cent stake for the next cinema projects," Ochs said.

Warner Bros will establish an office in Shanghai with Ellen Eliasoph as its managing director for China to oversee the subsidiary's Beijing office as well as its Hong Kong-based production personnel.

Ochs said the office will also supervise the theatrical distribution activity in China and work with other subsidiaries of Warner Bros Entertainment to ensure successful entry into the fast-growing Chinese market.

"Over the last few years, we have identified China as a major growth market," Ochs said.

"As it develops into a consumer-driven film market, Warner Bros will pursue every opportunity to build a vibrant pictures distribution business."

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