RISING CHINESE FILM INDUSTRY WANTS TO TAKE ON HOLLYWOOD. "WATCH OUT" SAYS ONE AMERICAN PRODUCER IN CHINA - "60 MINUTES" SUNDAY

Holly Williams in her First 60 MINUTES Story

In China, it's usually forbidden to shoot films in The Forbidden City. So an enterprising former farmer built his own movie set version, part of what is now the world's largest movie lot. It was a gamble that paid off, because China's film industry has grown so big so fast, that it is now looking to compete with Hollywood. CBS News correspondent Holly Williams reports from China in her first 60 MINUTES story to be broadcast Sunday, April 10 (7:00-8:00 PM, ET/PT) on the CBS Television Network. Watch an excerpt.

Dede Nickerson has seen the rise of Chinese cinema as a film producer there for the past two decades. She thinks it won't be long before the Chinese are ready to muscle in on Tinseltown's territory. "They are smart. They understand storytelling. They are... super well-versed in what works in their own country. They are super well-versed in what works globally," she says. "I couldn't be more excited. So I would say... Hollywood, watch out."

Even as the economy slows in China, the country produces some 600 films a year for a domestic audience growing so fast that 22 new screens open every day. The Chinese box office over the last five years has grown 350 percent. The spectacular Hengdian World Studios, where 60 MINUTES cameras capture the replica of The Forbidden City and other massive movie sets, hosts 30 different productions every day.

U.S. filmmakers are very much aware of the growing Chinese movie market, says Nickerson. She says Chinese audiences are now a consideration in the decision-making process at every major Hollywood studio. "They have to because oftentimes the Chinese box office is larger than the U.S. box office. Especially for the big blockbuster films."

More and more big Hollywood productions are being made in both countries for both audiences. "Transformers 4" made $300 million in China and was partially shot there. Kung Fu Panda 3 was animated in California and Shanghai at the same time, and in the Chinese version, the characters' mouths were made to look like they were speaking Chinese.

But one of China's biggest filmmakers says the Chinese are ready to make their own films for the U.S. and Chinese markets. Dennis Wang, who runs Huayi Brothers studios with his brother James, says he and his colleagues in the Chinese industry are eager to use Hollywood directors and stars to compete directly with U.S. studios, making blockbusters for English and Chinese audiences "I think we'll be doing that in the next one or two years. Maybe in five years we'll be doing it really well," Wang tells Williams.