MACAU: India's movie stars descended on the southern Chinese city of Macau Thursday for the "Bollywood Oscars" weekend, an annual showcase for one of the world's most ambitious and prolific film industries.

The three-day International Indian Film Academy (IIFA) event will feature performances, premieres, celebrity parties, workshops and business forums.

The weekend culminates with the glittering 10th annual awards ceremony on Saturday in the giant Venetian casino resort, which organisers say will be attended by 8,000 guests and watched by 500 million TV viewers in 110 nations.

But the event comes at a tough time for Bollywood, which has been hit by the financial crisis, dwindling budgets and a damaging dispute over box office receipts.

Celebrities lighting up the extravaganza include India's most famous acting dynasty, the Bachchans -- father Amitabh, son Abhishek and former Miss World Aishwarya Rai, who is married to Abhishek.

Abhishek Bachchan and Rai have been nominated for the best actor and best actress awards this year.

IIFA director Viraf Sarkari said he hoped the decision to bring the event to China -- after last year's lavish show in Bangkok -- would encourage more collaborations between Indian and Chinese filmmakers.

"We are really glad to be hosting the event in China this year, as we think that both Indian and Chinese films have a very big global market," Sarkari told AFP.

"But it is not purely about films, it is also about business networking and cross-cultural exchange. It is like a combination of Cannes and the Oscars," he said.

Organisers were also expecting a strong turnout from Hollywood film producers, many of whom are keen to work with their Bollywood counterparts following the success of "Slumdog Millionaire", which grabbed eight Oscars.

The rags-to-riches tale set in Mumbai was essentially a foreign film using Indian talents, and Sarkari said the annual IIFA event was likely to head to the United States soon in a bid to tap potential backers.

The conference, first held in 2000, is held outside India ever year in an effort to increase the international profile of Bollywood films.

After the first IIFA awards in London, Hindi cinema ticket sales grew 35 percent in Britain over the following six months, organisers said. Other past event sites include Johannesburg and Amsterdam.

"The IIFA has already played a huge role in making the appeal of Bollywood global," Sheetal Malpani, who analyses the Indian film industry at Mumbai brokerage Brics Security, told AFP.

"Its marketing strategy caters to the global audience -- including the (expatriate) Indian population out there."

Bangkok, which hosted last year's event, has since become a popular shooting site for Indian films.

Taran Adarsh, a Bollywood film critic who attended last year's event and is in Macau this year, said: "It seems that more Bollywood movies were shot in Bangkok than in Mumbai after last year's IIFA."

India's production houses churn out about 1,000 new releases a year for its enormous audience at home, although questions remain about its ability to transfer that success abroad.

The industry has suffered in recent months because of a damaging row between producers and multiplex cinemas over how box office receipts are split. The dispute was finally settled last week after a two-month stand-off.

Even before the dispute, India's 2.3-billion-dollar film industry was feeling the pinch from the global economic slowdown, reining in budgets and actors' fees as audience numbers dwindled.

The weekly news magazine India Today described the first five months of 2009 as "Bollywood's Worst Season" -- with net box office takings down to 51 million dollars, compared with 71 million in the same period last year.