The rationale for the joint venture announced this week between Creative Artists Agency and China Media Capital is very much about growth. But to unlock that potential, CAA may need to change the way it normally works and adjust to China’s particular circumstances.

The partnership will see CAA fold its existing China activities into a new entity called CAA China. CMC will buy a stake in the new venture, as well as a strategic minority stake in the CAA parent company.

Neither party has disclosed the implied valuation of the new company or the size of CMC’s minority stake in CAA. Nor have they said whether CMC’s shares in CAA are new equity or existing shares being sold by a current investor.

But the new CAA China indisputably links up two powerhouses. CAA is majority-owned by TPG, a U.S. investment group with a wealth of interests in China. CMC boasts a portfolio of nearly 100 companies, including the multi-billion-dollar Dream Center entertainment hub being built in Shanghai, film and TV production companies, broadcast TV and Flagship entertainment, a film joint venture with Warner Bros.

CMC’s chairman, Li Ruigang, who joins CAA’s board, is a strategic thinker, prodigious dealmaker and probably the most connected Chinese businessman in Hollywood. His position in China’s ruling Communist Party will no doubt open doors for CAA China, especially as the new company scales up its operations.

With staff numbers currently at about two dozen, CAA China is much smaller than global management company IMG, which has some 70 staff in China, mostly focused on sports. “CAA China will progressively add additional senior management to help expand the business into new entertainment and sports areas,” the two founding companies said in a statement.

Current Beijing chief Jonah Greenberg will continue to lead the company’s efforts in motion pictures in China. Roeg Sutherland, co-head of CAA’s global film finance and sales group, will continue to lead the agency’s film finance business.

Up to now, CAA has focused its China operations on crossover talent (including Zhang Yimou, Lin Chi-ling, and Donnie Yen) and film finance, notably cross-border co-productions. But the more closely its works with CMC, the more CAA may need to modify its usual pure agency business model to fit with the realities on the ground in China.

Chinese talent groups operate in distinctly different ways from Hollywood’s fee-based agencies with their 10% fees. The Chinese groups include husband-and-wife management teams (in the cases of director Chen Kaige and actor Chow Yun-fat, for example), offer workshops built around a superstar (such as actress Fan Bingbing) and run businesses that are essentially extensions of production and distribution studios. Still others are focused on developing new talent.

Lee Wei Choy, who shepherded the new joint-venture deal for CMC, confirmed that CAA China would be open to consider taking positions in content productions. That is something currently prohibited for American talent agencies. But as an entity that is legally separate and has different ownership from the CAA parent company, CAA China would be more able to blur the lines.

“CAA Beijing has had good success to date with packaging co-productions and cross-over talent,” said Lee. “We see more co-productions and China’s growing importance in the global entertainment landscape as long-term macro-economic drivers. And as China grows, the business will get more structure.”

Li, the CMC chairman, could also smooth CAA China’s passage onto the financial markets. He played such a role at IMAX China, where CMC and a small consortium paid $80 million for a 20% stake in April 2014 and helped it to an IPO the following year. Including a $47.5 million special dividend, the investors’ returns were estimated at more than 230% within a year. CMC and partner Fountainvest sold their remaining 5% stake in IMAX China just last week.

But Lee said it was too early to be talking already of exit strategies from CAA China. The first order of business, he said, is to get the new joint venture off the ground.