When Walt Disney's The Secret of the Magic Gourd opened in China earlier July, it earned more than $1 million in its first week. That's a modest opening for a company that produced Pirates of the Caribbean: At World's End, which took $10 million in its first week in China. But what makes The Secret of the Magic Gourd special is the fact that it's the first animated Disney feature to be made outside of the United States.

Locally-made film is just one strategy that Disney and other film studios are employing to target China's burgeoning market for animated features. In years past, companies like Disney, Pixar and Nickelodeon have dubbed their American-made films into Chinese, but film fans know that there is always something lost in translation.

Disney now plans a number of locally produced projects for China. The animation leaders are currently in talks with Chinese broadcast authorities about a Disney television channel and are even planning a line of Chinese animated characters to compliment the world's favorite characters, Mickey Mouse and Donald Duck.

Overcoming air time restrictions

The Secret of the Magic Gourd is based on a Chinese tale of a boy and an enchanted, wish-granting vegetable. It was produced by China Film Group and Centro Digital Pictures Ltd. in Hong Kong. The movie is based on a story by Chinese children's author Zhang Tianyi.

"Good stories are not dominated by American creators," Stanley Cheung, head of Disney's operations in China, told the Associated Press. "We are not fixed on the idea that we have to lift stuff from the U.S. and drop it into China and if that doesn't work, we don't have business. I think that would be a narrow way of doing business."

The prospect of launching a Disney television station is daunting due to legal restrictions on showing foreign cartoons during prime-time hours in China.

"In China, because it can't fully enter local media and entertainment due to legal restrictions, the spread of Disneyland culture is greatly limited," Wang Ran, Chief Executive of media industry investment bank China eCapital Corp., told the Associated Press.

China also limits the number of foreign films allowed to distribute in the country at 20 films. By producing The Secret of the Magic Gourd locally, Disney doesn't have to battle for one of the limited import spots.

"The Secret of the Magic Gourd has not been a big success yet in terms of box office, but it's given Disney more headway in the China movie business than anyone has really had from its global peer group thus far," Vivek Couto, Executive Director of Media