The third installment in the popular Iron Man movie series will be made in China in an attempt at tapping the third-largest box office market in the world, film industry officials said on Monday.

The Walt Disney Company China and its subsidiary Marvel Studios joined the Beijing-based DMG Entertainment to announce that they will work together to produce a film they hope will become the first Hollywood blockbuster to result from a partnership between companies from the two countries.

DMG will invest in the production, manage the Chinese co-production process and help produce the film in China. DMG will also work with Disney to distribute the film in China.

"Our collaboration with Disney and Marvel marks a milestone in the global entertainment landscape, as this signifies the first multi-billion dollar franchise to be produced between Hollywood and China," said Dan Mintz, CEO of DMG Entertainment.

Iron Man 3 will be the third movie made in a popular series about a Marvel superhero who dons a special armor suit to fight crime. Like the previous two installments, this one is to feature performances by Robert Downey Jr, Gwyneth Paltrow and other stars.

It is to be released in the United States on May 3, 2013, and the filming of it is expected to begin in May in the US and continue in China in late summer.

The project will mark the first time companies from the US and China have worked together to produce a movie on so large a scale. Similar collaborations in the past resulted in the films The Forbidden Kingdom in 2008 and The Karate Kid in 2010.

The booming Chinese film market has spurred US industry giants to try to gain a larger presence in the country. In 2011, the Chinese box office brought in about 13.1 billion yuan ($2 billion), a 30 percent increase year-on-year.

Titanic in 3D, a movie released last Tuesday, has made more money in China than any other part of the world, including the US. Reuters reported that it has made $58 million so far in China, and $190.8 million in the world as a whole. China agreed in February to import more movies from the United States. The country said it will welcome every year an additional 14 "enhanced" films, or those that can be shown in IMAX, which can display images at a greater size than regular film systems, or 3D formats. The country now permits 20 pictures to enter the country annually.

China has also decided to increase the proportion of box office revenues that US companies can take home after their movies are shown in China, raising it from 13 percent to 25 percent.

Many see overseas companies' willingness to enlist Chinese companies as film partners as a sign that the country's movie industry is gaining strength.

"The popularity of the Marvel franchise globally creates a huge opportunity to deliver fans yet another action-packed film," said Stanley Cheung, managing director with The Walt Disney Company China.

"The co-production of Iron Man 3 in China is testimony to the importance of this audience to Disney and the local industry's capability to deliver a blockbuster title."

Rob Steffens, general manager of operations and finance for Marvel Studios, said he and his colleagues are confident that their stories will continue to be enjoyed by Chinese audiences.

"Adding a local flavor and working with our new local partner will enhance the appeal and relevance of our characters in China's fast-growing film marketplace," Steffens said.

Working with Hollywood will also make it easier for Chinese producers to enter international markets.

"Chinese film companies lack ... experience in producing films for an international audience," said Chen Shaofeng, deputy dean at Peking University's institute for cultural industries.

Chen said establishing joint ventures may prove the best way to continuously improve the quality of filmmaking in China. He said it will help domestic film producers gain more experience with production, technologies and branding aimed at the global market.

Liu Wei contributed to this story.

Contact the writers at wangzhuoqiong@chinadaily.com.cn and huangying@chinadaily.com.cn