Tokyo — Japanese ad shop Asatsu-DK (ADK) is partnering with the China Animation Group to enter Chinese market.

The pair will produce toons for Chinese TV and sell content around the world.

The partners aim to earn $25 million annually from toon-related businesses within three years, according to a report in the Nikkei newspaper

ADK’s Singapore subsid has set up Beijing IMMG Intl. Culture Media to kickstart its plans. CAG will supply office space to the outfit with the intention of eventually launching a joint venture company.

Meanwhile, ADK will provide CAG with animation production know-how and produce toons under the CAG umbrella. The partners plan to finish their first pic next year.

The biz in China is booming with 385 TV toons and 16 features made in 2010, according to government figures, which is strongly backing the biz.

It has hiked toon subsidies, helping the Chinese market doubled from 2009 to 2010 to $3.2 billion. This blistering pace is expected to continue, in sharp contrast to Japan, where slowing birthrates have contributed to toon biz stagnation.