Hong Kong Biz is Tested Mainland

As the Hong Kong film industry has sought to keep up with the changes forced on it over the past 20 years it has been pulled in many different directions. But these days, only two sets of pressure are at play.

On one side, there is steady business in making big co-productions between Hong Kong and mainland China that are targeted at audiences in both markets, and to a lesser extent the wider Asian region.

On the other, there has been a surge of movies with a strong Hong Kong flavor faring well at the local box office. Pang Ho-cheung’s slacker comedy “Vulgaria” and Fruit Chan’s recently released post-apocalyptic drama “The Midnight After” are just two examples.

Meanwhile, new blood has entered the fray. At the latest Hong Kong Film Awards, 14 directors were in the hunt for the newcomer award — a record for recent years.

So is Hong Kong becoming no more than a piece of the mainland China production scene, or is the territory making a comeback after some of its top talent seemed to have been lost?

Veteran film producer Nansun Shi says the industry has been doing well in the past few years, especially in terms of new filmmaking talent.

“Some of the newcomers like Alan Yuen (“Firestorm”) have actually been around for years, but doing different things. They are highly competent and their debut movies appear to have been the work of anyone but first-timers. But the young ones like Juno Mak (“Rigor Mortis”) are good, too,” she says.

Big-budget Hong Kong-China co-productions, backed chiefly by mainland investors, are a mainstay of the Hong Kong industry. The financial temptations — easy funding and large potential upside — mean that even Johnnie To, one of the most local Hong Kong directors, has ventured across the border. His 2012 “Drug War” was made in China.

And in 2013 more than half of the 49 Hong Kong films shown theatrically were co-productions.

Nevertheless, there are still filmmakers who manage to generate plenty of buzz with their local creations. Fruit Chan recently took Hong Kong audiences by storm with “The Midnight After,” made on a budget of just over HK$10 million ($1.3 million) that was sourced entirely from Hong Kong and included finance from the Film Development Council pool. The film earned $2.2 million in its first 10 days at the local box office.

“Knowing from the outset that it wasn’t going to be a film for the mainland market actually made things easier and quicker — we filtered out the investors we knew wouldn’t be interested and only focused on the ones with potential,” he says. “But in a way the project was a cinematic suicide attempt. We were prepared to lose money. … It was a matter of money versus creative freedom.”

Dante Lam’s conventionally financed, but very dark “That Demon Within” and 2013’s indie “The Way We Dance” were hits inHong Kong. “The success of one or two films is not enough to indicate anything. But if there are 10 new directors making local films with a Hong Kong flavor, then it would be springtime again for Hong Kong cinema,” Chan says.

Chan points to onscreen talent as a particular problem. “There is a lack of new blood,” he says. “We’re recycling more or less the same stars. And Hong Kong actresses are a dying breed. Nowadays the cast of almost 99% of co-productions is formed by Hong Kong actors and mainland actresses.”

Shi says the crux of the problem lies in the decline of the Hong Kong TV industry. “TV is a nurturing ground for future movie stars. Today, we no longer have a vibrant TV industry to cultivate new talent,” she says.

“What can be done? As the government has refused to give Hong Kong Television Network (a planned new free-to-air channel) a license, there’s not much we can do.”

Meanwhile, some filmmakers are seeking to smooth the way for Hong Kong films to access the China market without adhering to the co-production formula. Cheung Chi-sing, vice chairman of the Federation of Hong Kong Filmmakers, says he and some industry peers recently met with Hong Kong’s chief executive Leung Chun-ying. They want him to press mainland authorities to open the Chinese film market to Hong Kong films made without a mainland partner.

In theory, that’s already a reality.

At the core of the issue is the Closer Economic Partnership Arrangement (CEPA), which was signed in 2003 and exempted Hong Kong films from the import quota that exists for non-Chinese films. Cheung says the agreement has been disappointing in practice.

“Under CEPA, Hong Kong films should enjoy the same status as mainland films in China. But this has never been realized partly because of administrative complexity and partly because the mainland’s propaganda authority has to keep a grip on what can be shown at the cinema,” Cheung says. “As a result, our film industry has not been in a healthy state. There are either big-budget co-productions or low-budget local pics. There is no in-between.”

There is hope though. In 2017 when the second round of WTO negotiations begins, China may increase the import quota, Cheung says.

“In that case, there would be greater competition from the U.S. To ease the competition, China may seek to join forces with Hong Kong and Taiwan to strengthen the Chinese film market. That may involve easing restrictions on Hong Kong films.”

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