Pic is the highest profile production to date for the Taiwan conglom China Magnetics Corp. Company, which has ambitions to revive the almost moribund state of local movie industry, is an equity investor in the in-production John Woo movie "Red Cliff."

CMC will co-produce "Mei Lan-fang" with China Film Group as partner on a budget of $15 million. Chen, who is now completing the screenplay, says the film will track not only Mei's development of female characters, but also his role in popularizing Peking opera with Japanese and American auds. It plays out against background of political turmoil in the first half of the 20th century; pic will highlight Mei's refusal to perform during Japanese occupation of China.

Leon Lai and Zhang Ziyi are being lined up to star.

"Mei Lan-fang" is being produced without Chen's regular U.S. partner Etchie Stroh and Moonstone Entertainment, which produced helmer's high profile flop "The Promise" in 2005. Chen and Stroh are likely to reteam on future projects according to Stroh.

CMC, which has its roots in videodisk and tape manufacturing, moved into software side of the business 10 years ago as a video distribber and expanded into production two years ago. Its first pic was ambitious contempo ghost story "Silk," which premed at Cannes last year.

Company, topped by Bob Wong Ming-hsieh and Hung Chin-wen, also fully financed "Blood Brothers," a $10 million actioner by first time helmer Alexi Tan. Produced by Terence Chang and John Woo's Lion Rock, pic is being unveiled in Cannes Market by Fortissimo Films.

"We've fully financed two pictures so far, but that limits the number of films we can make each year," CMC spokeswoman Isabella Ho said. "From now on we will be looking to be more involved in co-productions."

To achieve that, it is restructuring the group and will set up an equity fund to raise coin from third party sources.

Ho says that company's slate will be narrowed to focus on commercial Chinese-language pics.

CMC's distribution arm has also become more aggressive: It has picked up "Next," "Resident Evil 3" and Cannes competition film "The Diving Bell and the Butterfly."