The China Syndrome

If outsiders had to describe Hong Kong's film scene, they might use words like prolific, thinking of the seemingly endless kung-fu films that the city's studios have churned out. Or, if they knew their art-house fare, they could call it sophisticated, with a nod to the international acclaim that such exquisitely shot films as Wong Kar-wai's In the Mood for Love (2000) have won in recent years. But, in fact, what was once one of the world's busiest film industries has been in financial and creative decline for some time. With just 50 homegrown movies hitting the city's cinemas, last year's output was a dismal shadow of the annual 200-plus figures of the early 1990s and a deeply worrying development for an industry whose output has been enjoyed by millions and inspired directors from Quentin Tarantino to Martin Scorsese.

Hit by piracy, the Internet, shrunken regional markets, competition from ever more spectacular Hollywood effects movies and a more sophisticated hometown audience that is harder to satisfy with formulaic celluloid offerings, the famous Hong Kong film scene is in crisis. Granted, overall cinema takings rose slightly in 2007, helped by flashy new movie houses like West Kowloon's Grand Cinema, where are seats wired to shudder and shake along with the mostly imported on-screen action. But now, tough times loom and the industry's recovery is by no means certain. The only real prospect of hope on the horizon, selling films to China, is also fraught with compromise.

Under a 2003 trade pact, Hong Kong – Chinese co-productions are recognized in the lucrative mainland market as Chinese films, not as imports subject to tight quotas. This partly explains the current trend for big-budget period pieces, which by being politically uncontroversial play very well in China. (Each one also bears the potential to cross over to international viewers in the way that Ang Lee's Crouching Tiger, Hidden Dragon did after it was released in 2000.) "I can say the China market is even more important than the Hong Kong domestic market," says John Chong, CEO of Media Asia, a leading production house and a backer of Peter Chan's historical movie The Warlords — the big winner at the Hong Kong Film Awards in April. In fact, no filmmaker aiming for a significantly larger audience or budget can afford to ignore China, whether they're making epics or otherwise. This year's family hit CJ7, a sci-fi flick from hometown actor-director Stephen Chow, scored with expensive computer animation — and a ton of cross-border finance.

But there is a big catch to having a production classified as Chinese, and that's censorship. Mainland regulations can stifle creativity and place tight restraints on Hong Kong cinema's anything-goes style. Ghost stories are ruled out or carefully tweaked, as are sociopolitical comment and almost anything racy. Finales with wrongdoers walking off scot-free are among other no-nos, too. For some, meeting Chinese standards is a matter of good business sense. "You just have to adapt when it comes to the market," says Wellington Fung, secretary general of the Film Development Council (FDC), a government body established last year to promote local filmmaking.

But complying with censorship is a running concern for local filmmakers like Johnnie To, a jury member at the 2008 Venice International Film Festival, which kicks off later this month, and the acclaimed director of such films as Exiled (2006) and the Election gangland duology (2005, 2006). "Are you giving up your imagination and creativity in your filmmaking?" he asks. Tightened restrictions and a slowdown in mainland approvals in this Beijing Olympics year have added to filmmakers' worries. "Nobody knows what's happening," says director Lawrence Lau, who is known for gritty youth dramas like May's Besieged City. "In that sense we don't have any idea of what's allowed and how much we can get away with." Then there are questions of whether audiences in China and Hong Kong actually understand films in the same way because of the significant cultural divergence between the two populations. "So why not go back to filming localized movies?" says To. "When you try to serve both markets, actually you will normally lose something."

To is chief among filmmakers championing hometown stories, and his latest work, Sparrow — a stylish pickpocket caper starring Simon Yam that premiered in February in Berlin and opened at the top of the box-office list in June in Hong Kong — is infused with an affection for Hong Kong's people and cityscape, as well as concern for threatened urban landmarks (a very topical preoccupation). "The movie is a way to gently vent my protest," To says. Among other directors, Sylvia Chang's accomplished triad-cum-family drama Run Papa Run, released in April, covers decades of Hong Kong's social transformation, while Ann Hui's low-key new release The Way We Are offers a compelling grass-roots community portrait.

While some filmmakers are lucky enough to secure funding from elsewhere — Yu Lik-wai's Venice competition entry Plastic City has partners in Hong Kong, Brazil, Japan, France and China — the choice facing most directors is stark. "You either do very low-budget films for the local market, or some side markets like Southeast Asia, or you do really huge, huge-budget films as a co-production with China," says Lau. Medium-sized productions are few, meaning that up-and-coming directors are finding it hard to make the transition to mainstream features. Occasionally, established filmmakers will nurture protégés. To is producing medium-budget movies from editor and director Law Wing-cheong and screenwriter-director Yau Nai-hoi. Also nurturing talent is prolific filmmaker Eric Tsang, who produced Magic Boy, a vibrant 2007 love-triangle pic from second-time feature director Adam Wong, and Heiward Mak's recent debut High Noon, a drama of troubled youth shot with arresting flair.

Other filmmakers can apply to the FDC for partial funding and, to its credit, four projects, including those of first-time directors, have received awards since February. But funds are modestly capped at just over $460,000 per film. To get a sense of the competition facing industry entrants, one only needs to compare this level of financing to that of the Chinese-language film dominating the city's movie houses this season — John Woo's Chinese historical drama Red Cliff, which with its estimated $80 million budget is Asia's most expensive movie to date. The trend for increasingly expensive epics will eventually lose steam, of course. But nobody is sure that Hong Kong's film industry will be ready with a replacement when it does.