DMG - a Chinese entertainment and marketing group - will invest in Iron Man 3, manage the Chinese co-production process and jointly produce the film in China. Along with Disney's China unit, it will also distribute the film in China, the companies said on Monday.

Iron Man 3 will star Robert Downey Jr., Gwyneth Paltrow and Don Cheadle. It will be released in the United States on May 3, 2013.

Monday's announcement comes after China in February agreed to allow in more foreign films and reflects the fast-growing Chinese middle class spending more money in theaters and less on pirated movies.

Last week Disney said it would work with China's Ministry of Culture and Tencent Holdings to promote the animation industry in China, while Dreamworks Animation SKG Inc in February said it would build a studio in Shanghai as part of a joint venture with some of China's biggest media companies.

Comcast Corp's NBC Universal Studio is also said to be in preliminary talks with Tianjin about a joint venture to build a theme park in the port city.

(Reporting by Clare Baldwin; Editing by David Holmes)

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