East Meets West

Hollywood Studios Explore Chinese Movie Partnerships

Almost a decade down the line, China, despite a potentially lucrative market generated by its 1.3 billion population, still has institutional grey areas when it comes to welcoming foreign investments in films. The yet-unresolved rampant piracy over the vast mainland remains a major obstacle to foreign studios.

"[Piracy] is still a huge problem, and until that problem is reduced, it will be continue to be difficult to get any kind of reasonable money out of the Chinese market," says Barbara Robinson, managing director of Columbia Pictures Film Production Asia, a Sony Pictures Entertainment company. The Motion Picture Association estimates that, just last year, the losses to physical piracy such as counterfeit VCDs and DVDs soared to US $280 million.

The rampant piracy problem is viewed as a result of the central government's control over imported films. China's film industry, mainly regulated by the State Administration of Radio, Film and Television (SARFT), imposes a quota system limiting the number of imported foreign films to 20 per year and a revenue-sharing scheme allowing foreign studios to take a paltry 13 percent of the Mainland box office.

Co-productions with Mainland studios are thus regarded as one of the easiest ways to tap into the market, especially after China's entry to the World Trade Organization at the end of 2001. Unlike foreign imports, co-productions are treated as domestic productions, allowing them to bypass the quota system. Co-productions also have the option to choose whether to have the state-owned China Film Corp., the sole importer and distributor of foreign films, distribute their films.

Hong Kong-based Columbia Pictures Film Production Asia, which focuses on making Chinese-language co-productions with Mainland film studios, was the first to get there in 1998. Last year, the China Film Group, Hengdian Group and Warner Bros. Pictures partnered to create Warner China Film HG Corporation ("Warner China Film"), China's first Sino-foreign joint-venture filmed-entertainment company. It was reported that Warner China Film will engage in film and TV series productions. Warner Bros. also launched a home-video distribution and marketing arm, setting up CAV Warner Home Entertainment Co., a joint venture with state-owned China Audio Video. And this October, The Weinstein Company set up a branch handling Asia acquisition and co-productions.
"We are actively developing co-productions with Mainland China film companies at the moment," says Bey Logan, VP, Asia acquisition and co-production for The Weinstein Company. The company hasn't set a limit on how many co-productions will happen in the year ahead, he notes. "But most films would range between US$10 million and US$12 million. With a major star like Jet Li, we will be looking at US$20 million," Logan states. "Filming in Asia is more economical. US$20 million is the ceiling of what you look at, unless it involves a major Hollywood director or cast."
Robinson says that one to three films are planned for the next year, but they are still in scripting stage, following the popular and critically acclaimed Stephen Chow comedy Kung Fu Hustle, a co-production of Columbia, China's Huayi Brothers Film Company, Beijing Film Studio, China Film Group and Hong Kong's Star Overseas. The film has grossed more than US$20 million in China and a sequel is in the works.

Robinson notes that Columbia's production arm in Asia has made 12 films, nine of which were made in China and most of them co-productions. The company's first attempt was Zhang Yimou's Not One Less in 1999. Other notable successes include Ang Lee's Crouching Tiger, Hidden Dragon (2000) and Feng Xiaogang's A World Without Thieves (2004).

"They did very well. But after a hundred million RMB being spent, will people spend another part of their salary or savings? Obviously they did," Robinson says. "There's certainly an appetite. Our future plan is to make films of that scale, the Crouching Tiger and Kung Fu Hustle scale."

The record-breaking box office set by Kung Fu Hustle, Robinson notes, was largely due to the tight security measures imposed prior to the screenings. "We kept all our prints and screenings very secure. This particularly helped the box office on the Mainland. At least in the first few weeks, pirated copies of any quality were not seen."

Regarding censorship, which requires script approval, the players are well aware of the Mainland government's control over movie content. "When you go into a film, you know which areas are sensitive," Logan says.

"We never had a problem," Robinson asserts. "People working in the industry know that there are certain subjects or genres completely not allowed. Just don't go there. In general they are loosening it up a bit. Some of the movies we made, I don't want to name names, had a little cut here and there. There's a lot of interaction between those bureaus and filmmakers."

Sam Ho, the Motion Picture Association's director of operations for Greater China, feels that the lack of a rating system on the Mainland is the greatest problem. "Locally written scripts are more likely to pass the censorship. But if [the authority] thinks that the film could have negative impact on the society and children, they tighten up the control. We hope that there will be a rating system set according to age differences in the near future."

Despite the potential of the Mainland market, studios still rely on talent supplied by Hong Kong, despite its slumping industry, with production figures dropping from about 300 a year in the early 1990s to roughly 50 this year.

"The Hong Kong film industry lost its commercial strength in the '80s," Logan says. "But in Chinese productions, both above and below the line, Hong Kong talents still dominate, especially in action films. Mainland, for some reason, failed to produce male leads, whereas Hong Kong produced 40 to 50. Even someone like Jet Li, I would argue, became a major star in Hong Kong films."

"Films we've done like Crouching Tiger were made in China, but a lot of the crew were from Hong Kong. That's a nice marriage," Robinson says.

"For the time being, we are staying in Hong Kong," Robinson adds. "You can get the right people on the team. But I'm sure eventually everybody will be on the Mainland."

Vivienne Chow is the entertainment writer at the "South China Morning Post," based in Hong Kong.