BEIJING — Chinese toons have long struggled in the face of stiff competition from the likes of “SpongeBob SquarePants” and Japanese anime classics, but Sun Lijun, one of China’s top animation helmers and teachers, believes the local biz is set to explode.

Dean of the animation school at the Beijing Film Academy, Sun recently directed the $12 million 3D chopsocky toon “Legend of a Rabbit,” which has sold in 60 territories and has been bought by Cartoon Network. And he just signed up with Magic Dumpling Entertainment to helm animated 3D pic “Tofu Boy,” a Chinese-themed spin on the Pinocchio tale set in today’s Shanghai.

” ‘Legend” signaled a new era in Chinese animation, and I hope it’s a fresh start,” Sun says. “It (achieved some) commercial success, but there is still a long way to go.”

The pic marked a welcome step forward from the controversy surrounding recent toon “High-Speed Rail Man,” which had an identical storyline to the Japanese anime “Hikarian,” produced by Tomy in 1998. Many have said plagiarism has been endemic in Chinese animation.

“Legend” won for animated feature at China’s Huabiao Awards. The pic was made by formerly state-owned Tianjin North Film Studio, now emerging as a shingle to be reckoned with. Pic was co-produced by the Beijing Film Academy and Beijing Century Butterfly. Tai chi master Jing Jianjun was the pic’s martial arts choreographer.

Sun now turns his attention to “Tofu Boy” (working title), which Beijing-based Magic Dumpling is developing from a screenplay by Yi Yan and Wen Feng, with Disney alum Kevin Geiger, for a holiday 2013 release.

“I think the Chinese culture element is very important, but we need a better way to carry it to the rest of the world,” Sun says. “Kevin (Geiger) can give us a more international platform.”

Many acknowledge that the Chinese toon biz still needs to resolve issues, including a lack of creativity. Projects like “Legend” and “Tofu Boy” rep efforts by Chinese shingles to upgrade the quality of local animation.

Helping matters is the availability of state subsidies, including grants and tax breaks, for toonmakers.

No other country offers as much support as China for cultural industries as it tries to transform the toon biz, Sun says.

In 2010, total box office revenue from Chinese animated films was $31 million, a relatively small figure, and most animation is made for TV. Approximately $20 million of that total came from mainland toon “Pleasant Goat and Big Big Wolf,” while Hong Kong creations, such as cartoon pig franchise “McDull,” also did decent B.O.

Still, that reps only around one third of the $92 million that “Kung Fu Panda 2” grossed in China in the first six months of the year.

Last year, China produced 385 animated skeins totaling 220,530 minutes of programming, compared with 21,800 minutes in 2004, ranking the country first in the world in terms of output, according to a government report on the industry published in July.

Signs point to a confluence of China’s and the West’s toon cultures: A Chinese story like “Mulan” has become a Disney classic, while the Chinese elements in the “Kung Fu Panda” pics easily won over global auds. At the same time, U.S. toons such as “SpongeBob” are extremely popular in China.

Meanwhile, China’s biggest online video streaming site, Youku.com, has just struck a deal with DreamWorks Animation for online distribution of the “Kung Fu Panda” franchise, the first time the studio’s films will be available online in China. The toon shingle is also planning an animation studio in Shnaghai to produce content for the Chinese market.

And with the fastest-growing box office in the world and a population that includes 367 million kids, China market potential for toons remains huge.