Hong Kong’s profile in Europe, especially the Berlinale, remains as high as ever, but it is increasingly enmeshed with mainland China in people’s minds as more and more of the territory’s filmmakers head across the border to make movies.

Nansun Shi, who produces Tsui Hark’s films via Film Workshop and is executive director of Asian pic sales outfit Distribution Workshop, believes China is a fact of life for Hong Kong filmmakers these days — though it’s not all plain sailing.

“Hong Kong filmmakers who are making very local films without distribution in China will find it more difficult to find backers for their films,” says Shi.

At the same time, Hong Kong filmmakers who work in China are still trying to deal with an unstructured and chaotic market where the standard industry practices are not in place.

“Also, rising costs are a big challenge,” Shi adds.

Emperor Motion Pictures topper Albert Lee says to answer the question about the state of Hong Kong cinema, you have to ask another question.

“What is Hong Kong cinema? The distinction between Hong Kong cinema and mainland cinema is getting more murky,” Lee says. “All the films are made are in China with Chinese talent. The identity is blurring, and it’s becoming a pan-Chinese market.”

A classic example of this growing synergy came recently when EMP inked a five-year, three-pic deal with top mainland Chinese thesp Ge You and said it expected to invest no less than $78 million into the three projects.

Ge is a major star in China: His last three pics have grossed more than $200 million at the box office in mainland China alone.

“We all love watching Ge You, who is a truly remarkable actor,” says Lee. “Hopefully, we will be able to see other aspects of his talent through this new collaboration.”

Under the terms of the deal, Ge will develop and star in each of the three projects and may also step behind the camera as producer and director if he chooses to do so.

Ge collaborated with EMP on Jiang Wen’s “Let the Bullets Fly,” which is the highest-grossing domestic movie in China of all time. Ge starred opposite Jiang and Chow Yun-fat.

Hong Kong has always been the territory with the skilled workers and with the financing expertise. That remains the case, especially on crew.

“Hong Kong film for the last year has been quite buoyant in that it’s quite hard to get production crews,” Lee says. “We’re looking around for people like line producers and camera people, and a lot are not available — they are all working in China.”

It’s not all necessarily a perfect fit. Shi reckons that Hong Kong auds are getting tired of action films and period dramas.

“Many films which do well in China do not do comparable business in Hong Kong,” Shi says. “The Hong Kong audiences does not relate to the Chinese contemporary romantic comedies, due to the very different lifestyles.”

Hong Kong is also still attractive because the rule of law is so much more sophisticated there.

“Many U.S. companies have been knocking on doors in China in the last few years,” Shi says. “Unless these U.S. companies already have a special relationship with some entity in China, it is still best to go through Hong Kong companies who understand both sides, i.e., the U.S. companies and the Chinese companies.”

Looking at some recent Hong Kong-mainland co-productions, one can see how China is catching up, with greater sophistication at shingles like Huayi Bros. and Bona.

A major challenge facing Hong Kong cinema right now is how to compete not just with the influx of mainland Chinese movies, but also to deal with the resurgence of Taiwanese movies.

In terms of Chinese-language films, Taiwan is enjoying a renaissance right now, with pics like “Monga,” “Cape No. 7,” and “Seediq Bale” wooing auds with great success, both in Hong Kong and other Chinese-language areas.

One of the biggest phenomena in Hong Kong this year, indeed in Chinese-language cinema generally, has been the Taiwanese rites-of-passage pic “You Are the Apple of My Eye.” An autobiographical pic by Taiwanese novelist Giddens Ko, which cost only $1.65 million to make, “Apple” was the must-see Chinese film of 2011.

In December, it became the highest-grossing Chinese-language movie in Hong Kong’s history after B.O. receipts surpassed the previous record of $7.86 million, overtaking previous incumbent Stephen Chow’s “Kung Fu Hustle.”

It looks to be spreading that appeal into 2012, causing the same kind of stir on the mainland as it has in other Chinese-speaking markets, taking $4.35 million in its first week in China.

The Taiwanese government subsidizes movies to a much greater degree than Hong Kong, and this would also appear to put Hong Kong’s filmmakers at a disadvantage.

However, most Hong Kong filmmakers are pleased with the fact that Chinese-language cinema generally is enjoying such a revival, and tell you there is room for everyone right now in such a booming market.

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