China’s State General Administration of Press, Publication, Radio, Film and Television (SAPPRFT) has confirmed on its website that DreamWorks Animation’s Kung Fu Panda 3 will receive official co-production status. The news means the film will be treated as a domestic film and bypass the quota system usually imposed upon foreign films. The filmmakers also receive a larger share of box office receipts- 43%- than if they were deemed a foreign film.

DreamWorks Animation, its Chinese unit Oriental DreamWorks and their Chinese partners China Media Capital, Shanghai Media Group and Shanghai Alliance, filed and received co-production status for Kung Fu Panda 3 on January 15.

The news does not come as a surprise, given that much of the animation work is being done in China and the film franchise is inspired by Chinese mythology. It does offer Jeffrey Katzenberg some good news after a tough day yesterday where he announced cutting 500 jobs and a major restructure after a series of commercial misfires.

There is no Chinese release date yet for Kung Fu Panda 3, although the film is set for domestic release March 18, 2016. It had originally been set for release December 23 this year.