Japan anime in delicate dance with overseas markets

By Elaine Lies

TOKYO (Reuters) - Banners flare and sparks fly from the hooves of horses as warrior hordes race across the plains.

The scene is from an animated film of a Chinese epic being produced by firms from Japan and China, the latest step in a delicate dance by Japan's animation industry to expand global market share while avoiding losing skills to animators overseas.

"Japan is a giant in animation and there's many things that we can learn. There's still a huge gap in skills," Zhou Feng Ying, president of the Beijing Glorious Animation Co, told a seminar at the Tokyo International Anime Fair on Thursday.

"It's very important for us to grow through cooperation," she added, referring to the animated "Romance of the Three Kingdoms" currently being produced by her firm and Future Planet, a Japanese company.

That cooperation brings Zhou's company access to international distribution and Japanese animation know-how honed over decades, while Future Planet gains a sharp cut in production costs and a chance to tap the potentially vast Chinese market.

Such ventures are now seen as key for the industry, since despite decades of global dominance and a boom in the popularity of anime and manga comics, Japan's foreign anime profits are still surprisingly small compared to the money made at home.

In 2005, anime exports -- including broadcast rights and merchandising -- totaled some 19 billion yen ($192 million), according to Dentsu Communication Institute. In the same year, domestic profits hit 324 billion yen ($3.3 billion).

The anime fair, which features 289 companies and groups, 79 from overseas, is one effort to reach out.