Mainland, Hong Kong look ahead to more collaboration

There is a palpable buzz about the Hong Kong and mainland Chinese film biz these days, and China is sure to figure in many a conversation at the European Film Market.

Creatively and commercially, China is on a high. B.O. rose 44% last year to 6.2 billion yuan ($910 million), and the country’s high profile was exemplified by the choice of 2007 Golden Bear winner Wang Quanan’s “Apart Together” to open the 60th Berlinale.

Zhang Yimou is also in contention for the fest’s highest honor with “A Simple Noodle Story,” the helmer’s first film since “Curse of the Golden Flower” in 2006.

At the same time, there is widespread frustration that the Chinese market remains difficult to access for foreign investors.

It’s quite a conundrum. As “Avatar” showed recently — the pic realized more than $100 million at China’s b.o. — the Chinese market is too big to ignore.

Zhou Tiedong, prexy of China Film Promotion Intl., notes the rapid expansion of the mainland market.

“The main reason is that, I think, China has got more films every year, and more theaters and screens,” Zhou says.

Hong Kong helmer Peter Chan, who last year linked up with Beijing distributor Polybona and Chinese helmer Huang Jiangxin to form the shingle Cinema Popular, believes this year will see a certain reality creep back into the business.

“Last year was too good to be true. This year everything will go back to being real,” he says, and that there will be a continued focus on trying to get films onto China’s bigscreens, the number of which, though rising, is still limited.

Hong Kong is a Special Administrative Region of China with strong cultural and ethnic ties to the mainland, and the Hong Kong biz was quick to spot the opportunities of the booming China market.

Last year the big theme in the Asian film business was the blending of the Hong Kong and China markets on a number of levels, especially financing, and this theme is expected to continue in the Year of the Tiger.

“Hong Kong producers are still relying on the funding from China due to its huge, rapidly growing market. On finance, China has been luckier due to the expanding market,” says Ricky Tse, head of distribution at Media Asia.

As to the kind of movies that will be made, Nansun Shi of Asian sales outfit Distribution Workshop believes the big successes will be the ones aimed at the Chinese market.

“The kind of films that will come in this year will be films which can pass the China censors. The market is so big now, it cannot be ignored,” says Shi, who is also managing director of Irresistible Films, which promotes new filmmakers and produces her helmer-husband Tsui Hark’s films via their Film Workshop shingle.

“This year there is more and more of a blending of Hong Kong and mainland Chinese areas. There will be more and more investment and distribution cooperation,” Shi says.

China has launched a film development plan promising financial incentives and a helpful regulatory background to create a “Great Leap Forward” for the domestic biz.

The Five Year Plan by the State Council, China’s Cabinet, stresses the importance of China’s quota system to help promote domestic pics, saying the country’s growing ranks of cinemas must devote two-thirds of screening time to Chinese films.

This is a headache for the overseas biz. There is a quota of about 20 foreign movies allowed into China every year on a revenue-sharing basis, although overseas studios prefer flat fees, as a big hit can make more money.

This means a lot of countries fight over a small number of slots.

The Five Year Plan is a positive development for Hong Kong, however.

The former Crown colony, which reverted to Chinese rule in 1997, does not fall under the film-quota rules because of favorable regulations, such as the CEPA trade deal.

The number of tie-ups between Hong Kong and mainland companies is expected to be roughly the same as 2009, which was a bumper year for these linkups. “Megaprojects need more time, finance and talent support, so I expect the quantity of the huge projects will be more or less the same this year,” Tse says.

As far as financing goes, Asia has been luckier than other regions, especially for Chinese-language films, because of the fast-growing mainland China market.

Shi believes the industry really needs to take time to build its infrastructure. “Everything happened so quickly that people are ignoring all the important basic elements,” she says. Big films from big filmmakers are still being greenlit.

“But there have been some disappointments this year, too, so, some prudent investors will be more careful. But still, so much silly money out there,” she says.

The success of last year’s propaganda epic “The Founding of a Republic” — China’s most successful domestic film of all time, earning $60 million at the B.O. — means the Chinese are trying to make decent local product, and a lot of this is happening with Hong Kong expertise.

Indeed, “The Founding of a Republic,” co-directed by Han Sanping, head of China Film, and Huang Jianxin, featured plenty of Hong Kong thesps, such as Jackie Chan and Andy Lau, in prominent cameos.

The Beijing central government will also continue to support the building of digital cinemas in cities and towns through subsidies and tax breaks and will also allow state-owned film companies to consolidate and apply for stock market listings. This will benefit Hong Kong, too, as it will, in theory anyway, make mainland companies more transparent. And it means Hong Kong remains the most efficient route into the Chinese market.

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