The distribution of Hollywood movies in China now has the backing of the law after a bi-lateral agreement was reached during President Xi Jinping's state visit to the United States in September, the Motion Picture Association of America (MPAA) confirmed on Friday.

This deal will aid Hollywood film companies in the collection and verification of payments from their distribution networks in China.

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The new agreement, which was first disclosed by The Hollywood Reporter in October, will set the terms for the trade in movies in both countries and facilitate the growth of China's box office.

This agreement between Hollywood and China formalizes an initial accord between the two countries almost three years ago. The U.S.-China film agreement in 2012 gave China an opportunity to open its market to more Hollywood films. It also increased the box office revenue shares of U.S. distributors.  This 'Memorandum of Understanding' was declared certified during President Xi's recent visit to the U.S. The deal is set to be turned into an official trade contract.

The trade contract will contain an addendum of terms and conditions, such as a promise that American studios will be paid by Chinese distributors in a reasonable period of time.

"We are grateful to the leadership of SAPPRFT and the China Film Group Corporation for recognizing the importance of the growing partnership between China and the United States with regards to our film industries," said MMPA in official statement on Friday.

MMPA added that the proliferation of Chinese movie fans and the country's contributions to the international film industry continues to solidify this mutual agreement. The two industries anticipate further growth as a result of this collaboration.

The recently signed deal titled 'Agreement in Cooperation in Importation and Distribution of Revenue Sharing Films', is amenable to renegotiation in February 2017.

Tagshollywood, distribution agreement, MPAA