SHANGHAI Marking its 12th year, the Shanghai Film Festival has become a much more international event, shaking off a lingering legacy of provincialism and emerging with great confidence as a broader platform for the biz. This confidence and internationalism is driven by the booming Chinese industry.

After notching up a record-breaking $630 million last year, Chinese B.O. is forecasting $800 million this year, and the country’s growing economic muscle has given the fest’s organizers a strong argument about how it is becoming more than just a regional screening frenzy.

Fest director Tang Lijun has done much to give the fest a more international dimension and shake up its slightly provincial image, and snaring a red-hot director like “Slumdog Millionaire’s” Danny Boyle as head of the jury has been a boon.

Shanghai, China’s most populous city, is secondary in the film biz to Beijing, where the government and the censors sit, where decisions get made and where studios have chosen to locate.

It’s probably premature to signal the end of Shanghai-Beijing divide, but there were plenty of Beijing accents to be heard in the lobby of the Crown Plaza hotel as the Beijing gang came to Shanghai — regulators, helmers, financiers and thesps.

Certain eccentricities aside, such as the nasal cleansing pack provided with the press kit, the Shanghai fest looked and felt more like the real deal this year.

A strong presence from Europe, especially Germany and Italy, underlined the international flavor of the fest, which opened with Chinese helmer He Ping’s historical action drama “Wheat.” The opening ceremony was very much focused on Chinese stars and product, although Halle Berry was a big hit, and it remains difficult to access for non-Chinese speakers. And the fest closes with a Hollywood pic, “Angels and Demons.”

“I don’t see any problems in the China film market, and if there are problems, China is on the right track,” says Lu Chuan, helmer of the Nanjing massacre movie “City and Life and Death.”

“Our film made over 100 million yuan ($15 million) in less than 30 days, and it’s not a comfortable film. It used to be when we visited the cinema there was a strange smell, but now that is changing. And we also see a lot of schoolchildren queuing for the movies, this is a good sign,” says Lu.

Industry veteran Gao Jun of the exhibition circuit New Film Assn. was also bullish on the outlook.

“We now have 4,000 screens in China, and I think for the next 10 or 15 years Chinese box office will continue to rise. We’ll do 10 billion yuan ($1.5 billion) in five to seven years, a piece of cake,” he says.Gao is expecting a big increase in that select group of mainland Chinese helmers known colloquially as the “100-Million Club” — directors whose films have made more than 100 million yuan ($15 million) B.O. in China.

“It used to be just Zhang Yimou, Chen Kaige and Feng Xiaogang in the club, but we’ll soon have five or 10 new directors joining,” Gao says.

“Crazy Stone” helmer Ning Hao says while interest in Chinese cinema is growing, a lot still needs to be done.

“We’re 100 years behind the Americans — before they even start a movie they have thought through a lot of the problems,” Ning says. “Their economies and their fundamentals are so advanced. We need to do our homework.”

The focus on co-productions, especially cross-border co-operations between Hong Kong and the mainland, continued this year, with regulators, including Film Bureau chief Tong Gang, reiterating the oft-repeated mantra that co-productions are the way forward.

PolyBona, one of China’s leading private distribs and production companies, announced at the fest that it has raised $15 million from the venture capital firms Sequoia Capital China, SIG and Matrix Partners China in a second round of financing to fund its ambitious expansion plans. The capital raise follows a first round of financing last year, which raised $30 million, ahead of an overseas listing planned for 2011.

This ties in with the feeling at Shanghai that there is money around for movies, and there were plenty of venture capitalists at the fest eager for their piece of the booming Chinese biz.

Yu’s group was one of the co-founders in May of Cinema Popular, a shingle formed jointly with Hong Kong helmer Peter Chan and helmer Huang Jiangxin.

Other big news included an announcement by Imax that it’s linking up with Huayi Bros. to make films.

But some things don’t change. For the people of Shanghai, the fest is an opportunity, rare in China, to watch a host of foreign movies on the bigscreen and where the country’s quota rules on foreign films are relaxed.