Amid all this, the number of Chinese cartoon characters with IP protection has grown dramatically, thanks to a government campaign to develop the animation industry and make it more profitable, the Dezan Shira report said.

IP licensing deals allow buyers to use images of copyright-protected original characters on their products like TV and video content, electronics, toys, books, magazines, apparel, accessories, foods and beverages.

Yet, even as recently as five years back, an IP license to use a Chinese cartoon character would cost no more than 20,000 yuan.

Now, a similar IP license for a popular Chinese cartoon character could generate up to 2 million yuan in revenue, said Yaxley of Huhu, which is working on an elephant's adventure story called Beast of Burden.

The first co-production of China and New Zealand, 3D cartoon film Beast of Burden is expected to release this year.

Luo Bao Bei tells stories of a Beijing girl and her bonds with her neighborhood, friends and family.

Luo Bao Bei, the girl character is popular abroad because she is not the usual stereotypical cartoon who wears a red dress and waves a magic stick, Tian said, referring to her chats with foreign partners of MagicMall Animation.

"By showing details of her life, real life-like scenes of Chinese community and family in modern times can be displayed, which surprisingly won popularity from the Western world."

The company has already sold Luo Bao Bei IP licenses to book publishers and indoor theme park operators. It will authorize commodity producers and toymakers next, Tian said.

Beijing Zhiyou Culture Communication Co Ltd invested over 10 million yuan to build Luo Bao Bei Land, an indoor theme park in Beijing inspired by the cartoon character. It opened for business in July last year.

Chen Yifan, the park's director of operations, declined to share financial details but said the company is quite satisfied with the revenue level achieved so far.

Parents pay 228 yuan for a visit so they and their kids could enjoy the slides, make paper cuttings or play other games together in the 1,500-square-meter Luo Bao Bei-themed park that has decorations and toys transplanted from the animation serial.

The park offers different activities like making red lanterns and lucky bags, in line with the animation serial's philosophy of spreading Chinese culture, Chen said.

Luo Bao Bei's success could make IP licensing of Chinese cartoon characters even more popular, making China the biggest such market in Asia by 2020, industry insiders said.

Their view is based on Chinese parents' search for authentic cartoons and related merchandise for their children, as well as the world's growing interest in China, experts said.

Retail sales of IP license-based products and services exceeded $260 billion globally in 2017. About 3 percent of them were contributed by China, according to License Global data.