The past few months have seen a constant flow of deals and announcements that look like an imminent convergence between Hollywood and China, which is already the world’s second largest film territory and continues to rise. But the reality is tougher.

“Everyone is talking about co-productions between China and the U.S. But as I’ve discovered, it is so much harder that you can imagine,” said Kathy “Rain” Li, who is in the final stages of completing her film “Beijing, New York.”

“Every element the U.S. wants in the film and the way the story is told, the Chinese don’t like. Everything the Chinese want, the U.S. parties want to drop.”

Li’s story on the surface seems a natural fit for a co-production. It involves a Chinese woman who travels to New York to live out her American dream, but finds herself torn between men, cities and cultural traditions.

“Half the dialogue is in English, half in Chinese. It is about a woman who genuinely tries to integrate. It is nothing like last year’s hit ‘Finding Mr. Right,’ which was really about the Chinese community in Vancouver. So it should have been the perfect co-production, but drama translates so much worse than action and genre.”

The picture stars Taiwanese supermodel Lin Chiling (“Red Cliff”), top Chinese actor Liu Ye (“The Last Supper”) and Richard de Klerk (TV’s “Stargate”). Li was able to attract such a high profile cast and financiers thanks to a 10-year career as a cinematographer on pics including Gus van Sant’s “Paranoid Park” and Stanley Kwan’s “Showtime.”

Born in Beijing, Li normally calls London home, but she has spent most of the past three years shuttling among London, New York and Beijing, first trying to raise the finance, latterly to find affordable post-production facilities. U.K. company Argosy Pictures and its principals Pierre Proner and Alan Miller are producers on the movie and structured the deal with a London post-production company to help get the movie completed.

“The problem is all about money and control. And that’s why 50-50 doesn’t work,” Li said. “It has to be either an American film or a Chinese film, but either way that turns off half your potential audience.”

“The moment you call it a ‘co-production,’ or even worse an ‘international film,’ the conversation starts to go downhill. You just can’t use that vocabulary, you’ll lose your investors.”

“Beijing, New York” was made on a $5 million budget, largely provided by individual private investors in China and U.S. backers including Rob Barnum (producer), Cassian Elwes (exec producer) and financier Rampart Films.

The Chinese investors put up the majority of the cash, and have equity but initially only enjoy the China rights. The U.S. backers are the first out, with their recoupment coming from the rest of the world. The parties are not cross-collateralized. International rights are handled by Easternlight, the Asian-focussed offshoot of U.S. sales agency Arclight Films.

“The ideal would be to make two cuts of the same film. But the Chinese authorities don’t allow that. In the end we have to go with one vision, so it might as well be mine.”

An early version of “Beijing, New York” is screening this week in the Cannes Market. Li said it is 70% finished, and that the target is to get the completed movie into Venice and Toronto. “We are committed to an early September release by the Chinese distributors – Taihe, and Dadi Century —who licensed the local rights from the investors.”

“I feel like I’ve been back in college for three years,” said Li, who is being offered numerous scripts by way of follow up. “I’m tempted to go back to DP-ing next.”