Yan Bingyan wins best actress with her role in Feng Shui. Photo by Jiang Dong / China Daily

There are, however, rigid criteria for co-productions. Only when Chinese investment, cast, crew and aspects of the main storyline meet the requirements of the State Film Bureau can a co-produced film go ahead.

"The most important criterion of co-production is whether the story is about China and Chinese people, and whether it delivers Chinese values and culture," says Liang Longfei, vice-president of M1905.com, the official website of the China Movie Channel.

The rigid criteria and strong market has promoted Hollywood studios to take inventive approaches in their attempts to make their mark in China.

Paramount Pictures is working with the China Movie Channel, with the help of Los Angeles-based Jia-flix Enterprises, on the production of Transformers 4, which will be released in June 2014.

The three parties will cast four Chinese actors for the film via a reality TV show in China.

Aspiring actors need to submit footage online to take part, and 100 will be selected for the TV show that will follow them as they compete to win a role in the movie. The judging panel includes senior Hollywood insiders such as producer Lorenzo DiBonaventura and Megan Colligan, Paramount's marketing and distribution chief.

But even with the involvement of the China Movie Channel, the film will not be given co-production status.