(DreamWorks Animation)

(DreamWorks Animation)

DreamWorks Animation on Friday announced plans to build a studio in Shanghai, in what the Glendale-based company billed as a landmark agreement with two state-owned Chinese media companies.

The creator of the "Shrek" movies said it was forming Oriental DreamWorks, a joint venture with China Media Capital and Shanghai Media Group in concert with Shanghai Alliance Investment -- an investment arm of the Shanghai municipal government -- to establish a family entertainment company in China.

With an initial investment of $330 million, the Shanghai studio would develop original Chinese animated and live-action movies, TV shows and other entertainment catering to the China market. The deal was among several business ventures announced in downtown Los Angeles during an economic forum attended by visiting Chinese Vice President Xi Jinping, who is widely expected to be the country's next leader.

"We share the same vision with DreamWorks Animation to build a world-class family entertainment company," Ruigang Li, chairman of China Media Capital said in a statement. "Oriental DreamWorks will be a unique position to create high-quality content and interactive entertainment products for China and international markets."

The new studio, which has been recruiting some staff in Hollywood, plans to begin operations later this year and could eventually surpass the size of DreamWorks' headquarters, which employs more than 2,000 people, Chief Executive Jeffrey Katzenberg said in an interview.

"Our objective is to build an animation studio that is competitive with what we’re doing here," Katzenberg said. "We already have people working on over a half-dozen projects."

Read More >>>

-- Richard Verrier, Los Angeles Times

Photo: Logo of Oriental DreamWorks, a new joint venture between DreamWorks Animation and Chinese media companies. Credit: DreamWorks Animation.