Jackie Chan is to produce and star in The Highbinders - a police action film budgeted at $40m, thought to be the highest amount of Hong Kong capital ever invested in a film.

The Asian super-star is partnering with Emperor Movie Group (EMG) rather than his usual Hong Kong financier Golden Harvest on the project, Albert Yeung, chairman of EMG parent Emperor Group Holdings, announced on Wednesday.

Yeung sees the partnership with Chan as "our first step in marching into American and world markets". He said the film "will be a Hollywood-quality action movie financed with Hong Kong money".

Production is scheduled to begin in Australia in September next year. Casting will take place in the US, with a US director to be named.

"I've known Albert Yeung for a long time and always wanted to work together," Chan said. "He said he'll help me finance my movies, even if he loses money. People have approached me before and offered me a lot of money to make a movie, but to me it's not about the money. If the story isn't good, then I won't do it. I've waited a while and now the right story has come along."

EMG, formed in December 1999, aims to set up a distribution branch in Los Angeles, although it says its first films will be co-distributed with established companies in the US. The company, which named director Gordon Chan as its chief executive officer, aims to produce up to 26 movies in the next two years, mostly budgeted at $2.6m.

Amongst its first productions is Ito Junji's Village Of Tombs, from Norio Tsuruta, director of the first in the popular Ring horror series.

EMG's publicly-traded parent has subsidiaries involved in music distribution and concert organisation. It owns Hong Kong companies including Global Food Culture, a food and restaurant chain co-owned with Jackie Chan. Chan is not under an exclusive contract with EMG and will maintain his relationships with Golden Harvest.