The mainland has great ambitions to pump up its comics and animation sector. Early ripples in Shenzhen's animation scene emerged in the 1990s when Hong Kong companies began outsourcing labour-intensive work across the border. The industry took hold as eager young animation artists flocked to the boom town, and in their wake came US and Japanese production houses seeking cheaper and more productive alternatives to outsourcing partners in South Korea and the Philippines.

Much of the animation work was laborious, back-end assignments, but that may change as Shenzhen tries to shift from manufacturing towards higher value, creative industries.

In 2004, the Shenzhen government earmarked 300 million yuan to promote the sector, with animation as one of its pillars.

As part of the drive, officials set up an animation hub last year in a complex once occupied by Shenzhen Television.

Located on a tree-lined street in Huang Bei Ling district, the Shenzhen Animation Base offers creative enterprises a jumpstart by waiving rent for the first three years, and offering cheap loans and improved distribution channels. Units whose work is selected for broadcast by mainland television stations earn a cash bonus.

Super-Engine is among the 33 companies taking advantage of cheap space at the Base. Although there are a handful of foreign joint-ventures, most are small mainland outfits such as Tang Animation, which makes Han Ba Turtle, a TV series about an adventurous turtle.

The big brother of them all is Dreamland Animation and Art Dynamics, an umbrella enterprise that accounts for more than 10 of the animation units. A subsidiary of state-owned Shenzhen Radio, Film and Television Corporation, Dreamland has far more resources than most of its neighbours, with an annual operating budget of five million yuan.

Even so, operations manager Sunny Li Xuan is conscious of the challenges.'Overseas, a great cartoon is like a money tree,' she says. 'Their markets are mature, and there's lots of legal protection. We're looking for ways to apply their methods in China. Our goal is to synthesise a new platform for the domestic market.'

After liberalisation in the 80s, foreign productions, especially those from South Korea and Japan, dominated the market, accounting for 90 per cent of animated movies and television cartoons. To give local producers a boost, the central government last year banned foreign animation from being broadcast on television during the prime-time slot of 5pm-7pm.

But Li suggests that this policy will have little impact. 'Chinese television stations get foreign animation very cheaply. Since their budgets aren't being increased, they'll probably just scrap animation from those slots,' she says.

Dreamland sees linked merchandise as a way to get better returns on its efforts. Recalling how McDonald's in Hong Kong sold more than two million Happy Meals in three days in the early 90s under a Hello Kitty promotion, Li says: 'We want to do this kind of stuff in China. We want to create products that match our client's image. We don't have the resources to just churn out films. We need safe returns.'

Graphics collective Magic Cat has made a start with an eponymous cartoon character. Its magic feline is already being used for merchandising, and a line of accessories has been sold to local fashion retailers

Meanwhile, Dreamland is eyeing opportunities with China hosting a number of international events such as the Olympics and the Asian Games. 'There are some big events coming up and they'll all need animation,' says Li.

The company also plans to tap the various exhibitions held in Shenzhen, including the Cover-Culture Exhibition in August. 'We hope to use it like a mini trade fair to test our products on potential investors.'

But Li recognises they need to produce creative, original material to succeed. Lamenting the stagnation in Chinese animation, she says: 'My kids are watching the same Monkey King cartoons that I saw when I was their age. There's nothing else on.'

Schools such as the Institute of Digital Media Technology are helping to energise the sector. Set up in 2000 as part of Hong Kong animation venture Global Digital Creations' (GDC) mission to produce world-class material, the institute imported Hollywood talents to train its first batch of 400 computer graphics designers, supervisors and technicians. Aiming to meet the full spectrum of talent needs in the industry, its programmes cover all aspects from content production to merchandising, licensing, distribution and hardware. The top students are retained by GDC.

'Because the top students will become our co-workers, we train them with everything we've got,' says assistant general manager Teresa Cao Hui. 'And most graduates join Shenzhen's other firms, which is good for the industry. After training here, they can usually go straight to management.'

GDC, which was set up by computer graphics veteran Raymond Neoh and his brother Anthony, started off on a grand scale with Through the Moebius Strip, a US$15.7 million sci-fi odyssey based on French graphic novelist Jean-Giraud's original story of the same name.

Although it was hailed as a breakthrough for computer graphics on the mainland, the 2005 animated feature fared poorly at the domestic box office and has yet to be distributed overseas, leading detractors to dismiss it as a waste of money.

However, Cao remains upbeat. 'We never expected Moebius to make money here. The global media saw what we're capable of. They saw that the 'Made-in-China' label can mean something great.'

GDC's current computer graphics offerings, screened in its own movie theatre, are impressive. Drawing from the treasure trove of Chinese culture, Summer, a short, features a lotus that opens to reveal a three-dimensional ink-brush paradise where a reclining maiden recites an ancient poem extolling the season's virtues. Another short brings traditional Chinese shadow puppets to life in 3D ink-brush landscapes. Despite running at a loss for years, GDC remains the driving force in Shenzhen animation.

But Super-Engine hopes to make a dent in that position with its rodent road movie. Liu is convinced that his parable of Gray Mice and Looka - in which the two field mice stumble into the urban jungle of Shenzhen in their quest for tasty apples - will have a wide appeal.

Combining computer-generated characters with real images culled from forays through Guangdong province, Gray Mice captures the vitality of country life as well as the urgency of Shenzhen. 'I think audiences will realise that we're different,' says Liu. 'The quality speaks for itself.'

More importantly, the story of triumph over adversity is one 'that people can relate to', he says.