Wu: Road to China goes through H.K.

Co-CEO of Orange Sky Talks about Legendary Buy

Kelvin Wu, co-CEO of Orange Sky Golden Harvest Entertainment, the production and exhibition company that recently bought into Hollywood’s Legendary Pictures, on Tuesday stressed the importance of the Hong Kong-Beijing axis to the future of filmmaking in Asia.

“I think that anybody trying to get into the China market should go to Hong Kong first,” said Hong Kong-based Wu — who shares CEO duties at OSGH with Beijing-based Chen Xiaowei. Wu was speaking at a UNIJAPAN Entertainment Forum on the sidelines of the 23rd Tokyo International Film Festival and its concurrent market, TIFFCOM.

Speaking to about 40 producers from across Asia, and a few from Hollywood, Wu had his audience captive as they tried to glean tips from the latest independent Chinese company offering itself up as a way into China’s box office, up 86% from January to June.

Citing Hong Kong’s transparent banking system, its rule of law and the favorable co-production terms the territory shares with China, Wu said there also were other reasons producers should consider partnering with OSGH, known in Mandarin as Chengtian.

“Hong Kong has a long history of film production and talent and story development, something that’s lacking in China, especially in the storytelling,” Wu said, adding that Hong Kong’s free market economy and position as a travel hub meant the territory was better than China at capitalizing on cultural and business exchanges with the rest of the world.

Although China’s film content is closely monitored by one-party government censors in Beijing, Hong Kong filmmakers, whose domestic audience is limited by its population of roughly 7 million, can’t afford to ignore the giant to the north, where developers and exhibitors are adding as many as three new multiplex screens a day to meet swelling middle class demand for entertainment.

“By Hong Kong standards, relatively large-budget films can be made in China because of the ready availability of cash,” said Wu, noting his belief that three to five years hence, when more profits from more theaters flow back to producers, the China film industry will relax regulations barring most sex and violence from the silver screen.

Wu noted that politics are still a major concern, saying that Hong Kong is in competition with Macau, the former Portuguese territory that reverted to Beijing’s control in 1999, to solidify its position as south China’s moviemaking hub and a gateway to the China box office.

“Hong Kong is still more free than Macau, but Beijing is giving more freedoms there, too, little by little,” Wu said, noting, nonetheless, that working with China partners, whose hands are often tied by unclear media regulations, can still frustrate guests from overseas. 

“Chinese government guidelines can change depending on who you’re dealing with,” Wu said, adding that Hong Kong’s democratically elected government is lobbying Beijing to expand the two territories’ Closer Economic Relationship Agreement, which allows Hong Kong-China co-productions favorable distribution terms relative to the 20, mostly Hollywood, imports Beijing allows to screen for a profit each year.

Wu said that working with Legendary could teach Chengtian a few things about finance while providing the company that produced Inception a natural path into China.

“Hollywood film finance systems can be imitated and taught to Chinese investors,” said Wu, adding that Chengtian has been invited by Fox International Pictures to participate in the sequel to Hot Summer Days, a $2 million Mandarin-language film FIP made with Beijing-based Huayi Brothers Media that grossed roughly $20 million.

Asked by a Japanese producer in the audience if Chengtian might help Japanese films get into China, Wu, speaking in Japanese, said he thought the two countries’ business cultures were vastly different but that if they, like Legendary, chose a strategic partner with a base in Hong Kong, they, too, could benefit.

“Look at Death Note,” Wu said, referring to the Japanese manga series that is hugely popular in Hong Kong and which Warner Bros. bought the rights to make into a live-action movie for the U.S. “If it was made in Chinese, it would be a big hit,” he said.