China has new friends for prod'n

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CANNES -- China hopes to sign four new co-production treaties by year's end as filmmakers from Australia, Britain, France and India try to compete with Hollywood in the world's fastest growing movie market.

On the sidelines of the 60th Festival de Cannes, Miao Xiaotian, vp China Film Co-Production Corp., said China, which now has co-production treaties with Canada and Italy, also hopes soon to discuss treaties with Japan and South Korea.

"When foreign filmmakers come to China under treaty, their governments give them tax breaks, they save money on cheap production, and they build good relations," Miao said. "This is the only way to compete with Hollywood in Asia."

A typical co-production treaty of about five pages spells out such things as the number of nationals from each country who must be employed by a co-produced film, and what percentage of the film's budget each country must cover.

China awaits the return of a signed treaty from Australia and is hopeful the British one will come soon, too, Miao said.

This week, U.K. culture minister Tessa Jowell was here to talk up the British co-production treaty with South Africa, which gives tax breaks in both countries. Asked about the China treaty, Jowell said it was ready to go, then recanted, saying in fact it was still being negotiated.

China won't offer tax breaks, Miao, said, offering cheap skilled labor and unique locations instead, and British producers say that the Chinese side has been intractable.

But a lack of subsidies from China has not thinned global interest in tapping the country's boxoffice growth, up 25% in 2006, to $328 million.

China added 300 screens over the last five years, and growth is expected to continue as the economy boils in the run up to the 2008 Beijing Olympics, Yang Buting, China Film Promotion International chairman said.

It's little surprise, then, that the Chinese forum at Cannes on moviemaking in China was well attended.

"China is very important and I'm here because I know nothing about it," said Argentine producer Ricardo Preve whose film "Mondovino" was an official selection at Cannes in 2004.

China has strong pent-up demand for varied entertainment due to decades of strict media control and a limit of 20 imported films a year. Co-productions, however, skirt this quota in exchange for ceding their final cut to censors in Beijing.

Still, Preve said he'd like to expand on his work about the last nights of the lives of famous people by making a film about China's last emperor.

For newcomers to China, the process could be improved through simplification, said Gordon Platt, director of international policy for Canada's culture ministry, which signed its treaty with China in 1987.

"It's still very complicated for Western producers to navigate all China's regulations and simply to find out who does what," said Platt, who will visit the Shanghai International Film Festival next month.

Despite its difficult reputation, the State Administration of Radio Film and Television, increasingly is seen as less of an obstacle. So much so, that some Chinese producers are ambivalent about it and about co-production treaties.

"Governments don't see the markets the way we do," said Hou Li, general manager of Beijing-based Cheerland Films, the sole financier of Hong Kong director Ann Hui's "The Postmodern Life of My Aunt. "If a treaty helps my films make money in the future, I won't block it." (Hou also was the Beijing-based partner for Roger Spotswood's "Children of Hangs," a $20 million picture shot in China and now editing in Australia.)

Meanwhile, a Los Angeles independent heavy is getting into the China co-production game. Backing John Woo's "Battle of the Red Cliffs," in a complex $70 million deal with the China Film Group, Japan's Apex, and Taiwan's CMC, Patrick Wachsberger, co-chairman of Summit Entertainment, said: "This is not about making movies in Asia. Making movies all over the world is one of our goals, and we'd be open to doing it again."

Gregg Goldstein and Stuart Kemp contributed to this report.
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