How to cater to audiences in both markets is an issue that even big filmmakers are grappling with. Due to the cultural disparity between the East and the West, many producers find it hard to win both the markets, even though the film is co-produced.

An example of this is The Karate Kid, which earned just $7 million in China, less than 1/20 of the earnings in North America. "You cannot assume that an idea or story that was successful in the US will always be successful in China," says Wolf.

"The Chinese audience is sophisticated and does not accept that a young foreign boy can be bullied around by a group of Chinese students. The plotline of bullies beating a new student worked well in the original film but unfortunately it does not translate smoothly into Beijing settings."

Wendi Deng Murdoch also admits that it is hard to attract audiences from different cultural backgrounds - the $6 million budget Snow Flower and Secret Fan earned just $1.35 million in the US and $302,258 outside of the US, says Box Office Mojo, an online box-office database affiliated to IMDB.

Experts also suggest that having co-production should not just mean Chinese scenes or several Chinese characters. "It should be much more than that," says Zhang Xun, managing director of CFCC.

"We received some scripts which are totally Western-oriented. They just changed the foreign character into a Chinese face and obviously had no idea of Chinese culture. Such plots do not go down well with Chinese audiences."

Deng also echoes similar views. "The Chinese market has its own characteristics. For example, there is no rating system in the market, so it is inappropriate to screen bloody and adult content to some audiences. If the foreign partners really want to make profit in China, they must adapt to the situation."

Clockwise from top: A scene from US-China co-produced The Karate Kid featuring Jackie Chan; Yin Hong, associate dean of the School of Journalism and Communication, Tsinghua University; Deng Meng, director of cooperation and contracts at China Film Group Corp. Photos Provided to China Daily