AFM Special Report: Hong Kong

Boxoffice may be up, but the outlook is troubled

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Take a quick look at the Hong Kong movie industry and the picture couldn't be more rosy: After all, at a time when other indigenous production is floundering, Hong Kong has been buoyed by a small but notable spike in domestic releases -- up to 60 titles for the year ending in October, compared with 56 the previous year. Veteran helmers like Herman Yau are continuing to maintain a vast output. And even the notable Shaw Brothers, a bastion of Hong Kong cinema, have returned to the moviemaking scene with a new production, "Turning Point."

But that good news masks a troubling reality, as Hong Kong filmmakers struggle to maintain their own identity, compared to China at large, and have to cope with the fact that the burgeoning Chinese market is luring them away from their own small territory. More important still, they are having difficulty finding money for films that are not joint ventures with the mainland or aimed at larger Chinese audiences.

China is where the money is, and some of the most prominent Hong Kong directors have moved either to Beijing or Shanghai, even though many profess they'd rather remain in Hong Kong.

"If there (were) enough films to make in Hong Kong, I'd rather not go anywhere else," says Yau, the hugely prolific Hong Kong director who works with three crews simultaneously -- even while many technicians have followed the helmers to the mainland. "Although a large number of Hong Kong filmmakers are now working in China," he says, "they can't bring all the film crews with them, so there're still a lot of local crew members stranded here, unemployed."

But even Yau has succumbed to the lure of China and is now filming in Hangzhou, on the mainland, where he is prepping the Chinese New Year release "All's Well, Ends Well 2010" for Pegasus Film -- that's the follow-up to the highest-grossing 2009 Hong Kong film so far ("All's Well, Ends Well 2009"), which made HK$24.6 million and which took in more than 42 million yuan in China.

Yau's next film will also be a China/Hong Kong co-production, "Young Ip Man," a biopic on the early life of Bruce Lee's martial arts teacher, Ip Man, which cashes in on the popularity of the eponymous 2008 hit on the life of the Wing Chun master that starred Donnie Yen.

Even with Hong Kong grosses up, they are dwarfed by the potential money available in China. A case in point: the animated China-Hong Kong co-production "McDull Wudang," which raked in 75 million yuan ($11 million) in China compared with HK2.5 million ($320,000) in Hong Kong.

With the great bear of China looming over everything, authorities in Hong Kong have taken action to try to preserve the identity of their own industry and, even more important, allow local filmmakers to access mainland money.

Six years ago, the Hong Kong government introduced the Close Economic Partnership Agreement, a financial-incentive package for local industries to aid them in entering the Chinese market. While that package applied to all industries and not just motion pictures, the movie business was also covered.

This might have been helpful, except for the fact that co-productions with China tend to be high-profile movies with established filmmakers, limiting the ability of new directors to find funding for their projects.

To assist small-to-medium scale projects, two years ago the Hong Kong Film Development Council set up the Film Development Fund, with HK$300 million ($38.6 million) designed to provide up to 30% of the budget for selected projects.

Fourteen projects have been approved since the fund's inception in 2007, including "McDull Wudang," which received HK$3.6 million and proved the most commercially successful of the films the fund helped. (Another FDF project, "Claustrophobia," got a HK$1.6 million subsidy and was at least a critical if not commercial hit, garnering lead actress Karena Lam the best actress accolade from the Chungmuro Film Festival in Seoul.)

The success of "McDull Wudang" in China -- though notably not in Hong Kong -- is telling. As a China/Hong Kong co-production, the filmmakers could access mainland money to cover the production costs. Armed with a certain degree of brand recognition in China, where the title character, a naive, dimwitted, kindergarten-age pig, is known in the southern part of the country, the picture was able to tap China's huge audience.

But for filmmakers with less bargaining power in China than "McDull's" own producers, Bliss Pictures, finding a Chinese investor for a co-production is a challenge. And whatever CEPA promises, the Chinese market continues to be out of reach for many Hong Kong producers.

Because of that, Hong Kong has taken another step forward, launching a platform for Hong Kong filmmakers to meet other Asian producers and investors. The platform, known as Hong Kong New Action and organized by the local Film Development Council, is a touring business and promotion venture that kicked off in March at the Hong Kong Filmart and has included multiple stops in Beijing, Taiwan, Singapore and Malaysia. Two further stops are planned for Guangzhou and Shanghai in early 2010. It organizes meetings between Hong Kong filmmakers and others -- whether producers or investors -- interesting in partnering with them.

The first project created as a result of Hong Kong New Action is director Dennis Chan's "37," a joint venture between Beijing's Stellar Mega Media and a relatively new Hong Kong production company, Manner Movie. The HK$10 million film, about a Mongolian children's choir and the mother and daughter whose lives are transformed by it, marks the return to the screen of Liu Xiao-qing, the six-time Hundred Flower best actress award-winner known throughout China.

"The (New Action) platform gave me an opportunity to meet with Chinese investors like Stellar," Chan notes.

"We started to talk as soon as we met in March." Now the film is in postproduction, and is slated for release in China in 2010.

The meetings set up through Hong Kong New Action were not just meant to find producers and investors for Hong Kong filmmakers, but also to establish new markets for Hong Kong films. It is unclear to what extent it has been successful in that regard, though insiders are optimistic.

"Whether or not our film industry can survive depends on the expansion of the market," says Wellington Fung, secretary general of the Hong Kong Film Development Council. "Now the Chinese market is emerging, we try to grab hold of it. But it doesn't mean the other markets are not important. From our visits to Malaysia, Singapore and Taiwan, we found that the demands for films -- quality films that suit their taste -- is rising."

Still, it is money that matters most, both in terms of production and boxoffice -- and for the latter, China is definitely the place to go.

"It's only natural to put our eyes on China, as that's where the money is," Fung says. "Even after our trips to Singapore, Malaysia and Taiwan, the investors and producers there were focused on making films that can be released in China," he says. "(If) Hong Kong filmmakers can line up with investors from China as well as overseas, the films have access to the Chinese as well as overseas markets."

Then, he says, "Everybody is happy."