By FRANK SWERTLOW

Staff Reporter

After spending years trying to keep Hollywood out of the country, China is sending a delegation to the annual American Film Market this week to woo U.S. filmmakers and bankers.

"They are coming to town in force," said Mike Frischkorn, president of the American Film Market Association. "They want to build a strong motion-picture industry, and they recognize American expertise will help them."

The film market, now in its 19th season, opens Thursday and runs through March 5 at the Loews Santa Monica Beach Hotel. The idea behind this annual movie and TV bazaar is to help producers pre-sell the rights to their projects internationally before starting production.

For years, Chinese officials have been standoffish in their dealings with Hollywood, allowing only about a dozen U.S.-made films into their country a year. Most of those tend to be big studio productions, with just one or two independent films allowed in.

Not surprisingly, Hollywood salivates at the thought of making deep inroads into China because of the country's vast population and buying potential. Chinese officials see Hollywood as a potential partner in co-productions that would bring U.S. dollars into the country, and believe that by working more closely with the industry they can better control the content of foreign films. The arrival of the Chinese at the AFM signals that both sides want to explore their mutual interests.

At least nine Chinese officials will attend the market, marking the first time representatives from the country have ever participated. Besides looking for co-production deals and meeting with movie producers and bankers, members of the Chinese delegation will take part in a seminar focusing on film production.

But Lewis Horwitz, who runs the Lewis Horwitz Organization, one of Hollywood's principal bankers for independent films, is wary of dealing with the Chinese because of a reputation for not honoring their commitments. "We don't accept their contracts," he said. "They have never been a major buyer."

Bankers like Horwitz attend the market to provide gap financing, money to make up the difference between what producers make pre-selling foreign rights and the budget actually needed to produce the project.

In terms of revenues, the American Film Market is the largest motion-picture trade event in the world. AFMA members generated $1.8 billion in 1997, the most recent year for which figures are available. Distributors close more than $400 million in deals each year at the market.

"This is a working market," said Clark Hallren, vice president for Chase Securities, a division of Chase Manhattan Corp. that funds films. "This is not a publicity event like Cannes. This is about business."

Indeed, there will be 7,000 participants from 71 countries looking to license films for theaters, TV networks and home video operations. Among the films that have been produced or licensed internationally by AFMA member companies are such Oscar winners as "The English Patient," "Platoon," "Gandhi" and "Braveheart," as well as this year's "Affliction," for which Nick Nolte has been nominated for an Academy Award for best actor.

While films like those are on the high end of independent filmmaking, AFM is mainly known for low-budget films that are heavy in sex and violence. To counter this notoriety, AFM is opening screenings to the public for the first time at the AMC Santa Monica 7.

Among the films that will be screened are "The Darklings" starring Suzanne Somers and Martin Sheen; "The Runner" starring Courtney Cox and John Goodman; and "Lady Chatterly," directed by Ken Russell and starring Joely Richardson.

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