Within a year, the studio was relocated to Shanghai, where they enjoyed a brief period of artistic freedom with governmental funding during the Hundred Flowers Campaign.

Initially, much was learned by studying Soviet animation, but the studio soon started experimenting with techniques based on domestic traditions.

The Proud General (1956) shows influences from both Chinese culture, with character designs and music inspired by the Peking opera, and Soviet animators such as Ivan Ivanov-Vano, as well as western ones such as Walt Disney.

During a visit to the studio, then Vice Premier Chen Yi suggested that they make an animated version of the paintings of Qi Baishi.

To keep his spirits up, he would sketch on the glass pane of a table that stood in his small room, erasing the drawings when he heard a guard approaching.