If approved, the deal would be a signal that China is prepared to meet commitments to open up its film industry made when it joined the World Trade Organisation.

Warner Brothers, a division of AOL Time Warner, is being invited to take just under a half share in one of the biggest cinemas in booming Shanghai.

The Shanghai Paradise City Cinema hopes to benefit from Warner's experience in cinema management and film marketing.

Film piracy booming

China vigorously protects its film industry, allowing only 10 major foreign movies into the country each year, including those from Hong Kong.

That number will double to 20 this year and eventually will reach 40 under its WTO agreement.

But film piracy is rampant in China with cheap copies of blockbusters easily available on DVD or video in most major Chinese cities almost immediately after a film's release elsewhere.

"They are beginning to understand the best way of controlling this is to make all of this officially available and make it available in cinemas," media analyst Stephen Vines told the BBC's World Business Report.

The Chinese government is keen for its film industry to benefit from foreign money and expertise but has concerns over the content of foreign films for political and other reasons.

"They are sensitive about what they perceive to be pornography, about what they perceive to be revelling in the Western lifestyle and transmitting Western values," Stephen Vines said.