When China resumed sovereignty over Hong Kong in July this year, it acquired a huge and dynamic film industry. De-spite a recent fall-off in cinema attendances in the SAR, Hong Kong still produces about 100 films a year, making it the second biggest exporter of films in the world after the US.
The production, technical and distribution skills that exist in abundance in Hong Kong are desperately needed across the border where the industry is much less vibrant and sophisticated. Drained of investment, China makes just 80 films a year, around half the number it used to make. The movie industry is badly in need of partners who can help to stimulate the interest of the public, and bring in money and expertise that can benefit productions. There have been many co-productions involving foreign partners, but China's role has been limited to providing logistical help. In 1996, just 35-co-productions were completed.
Low festival profile
What the mainland does offer is a potentially huge market ?China sells more cinema tickets than the US, making it a prime target for Hollywood. The annual showcase is the 10-day national film festival. Since 1993 it has been held in Shanghai, the birthplace of China's cinema industry. The 1997 Shanghai Film Festival opened in late October, screening 350 films made in 40 countries. Blockbuster titles included Disney's Hercules and Men In Black by Sony's Columbia Tristar Pictures.
However this was a low-key event in terms of participation from international executives ?it was especially difficult to spot the US film companies. This was in sharp contrast to 1995 when the festival coincided with the inaugural US-China Film Industry Conference and Hollywood was celebrating the release in China of mainstream American movies. For example, MGM was not in attendance this year, a spokesman saying the company "never sent representatives to the Shanghai film festival". Executives from Disney and Sony Pictures were keeping a low profile.
MGM and Disney have recently re-leased films in the US which have painted China in an unflattering light, to the extent that Beijing threatened retaliation unless the films were scrapped ?neither was.
Both companies hope they will not be hindered in the long-term by invoking the disapproval of Beijing, but the omens are
aamits just iu noiiywooa rums annually for distribution in its cinemas ?in 1997, 20th Century Fox received approval, for two releases. These 10 films, approved each year since 1995 by the Chinese Ministry of Film and Television, are the result of strong pressure from the US side to try to gain access to the Chinese audiences. Profits are shared between the foreign and Chinese parties but the returns so far have been small. The US is pushing hard to increase the quota in tandem with China's long-standing application to join the World Trade Organisation.
Beijing has always been wary of 'foreign influence' through cinema. Tradition-ally, the Communist Party regards films primarily as a means of propaganda ?they might also be worth watching, but the first goal was to educate the people. This stance was modified after the open-door policy started in 1978 when film-makers began to make films which con-form to state policy but also entertain the general public. Censorship has also eased on titles with violent and sexual content. Some films actually have been covertly critical of the Chinese regime, such as Yellow Earth or The Big Parade.
Hong Kong and Taiwan movies, typically of the martial arts variety or roman-tic comedies, have gained access to the mainland, and stars such as Jacky Chan and Chow Run Fat have become house-hold names in the mainland.
But in spite of the growing number of movies being shown, Chinese audiences have fallen dramatically over the last decade because of the increasing competition from television and the makeshift 'video houses' which charge lower prices than cinemas. The emergence of cheap video compact discs is an-other factor (see box). These retail at a price of just Yn40-65 a copy. Overall, cost is a big issue ?a typical cinema ticket was around YnO.2 in the mid-1980s, but by 1997 they had soared to around Yn20-30 in the plush cinemas of Beijing and Shanghai. However, some big city prices have been slashed over the last year to Yn2-3 so as to regain market share. Ac-cording to Market Daily, audiences have climbed 10-fold as a result.
Yet competition from other forms of entertainment remains strong. A nation-wide survey undertaken by Gallup and
watching sport on television (7-5 per cent of the population). This was followed by reading books (58 per cent) and photography (50 per cent), while going to the cinema was at the same level as playing music at home (33 per cent).
Foreigners are also in demand to help renovate China's ailing cinemas. A typical Chinese cinema is an uninspiring hall with bare wooden chairs, no heating or VCDs for sale Hello, VCD?" This is the first question foreign visitors are asked when strolling through Beijing's 'Sanlitun Bar Street'. If curiosity is aroused, a nervous local would take his customer to the back of one of the dozens of cafes open and open a bag filled with video compact discs (VCDs). The price is cheap ?around Yn15-20 each. One salesman said his products were manufactured in Guangdong province.
In spite of repeated promises of a crackdown on illegal CD and VCD pi-rating, factories in China's southern provinces have largely escaped the scrutiny of intellectual property rights watchdogs. However, following the signing of a Sino-US treaty on IPR in 1995, Beijing announced that it would take steps against copyright infringement. Chinese newspapers have re-ported closures of factories which allegedly copied VCDs without permission, which are then crushed by a bull-dozer. There are also occasional legal actions against companies ?in July, eight US film studios were awarded damages against Beijing Xianke Laser Products Plaza and Beijing Culture and Art Publishing House.
Yet while the market for pirated VCDs flourishes as ever before on the streets of Beijing, the legitimate side of the business is growing as well ?the country currently has some 100,000 video shops. Undeterred, Warner Brothers and MGM in February this year signed the first home video licensing deal in China. Shenzhen Advanced Science Enterprise Group is the appointed licensee. Chinese-dubbed films including Outbreak, .The Fugitive and JFK are now for sale as VCDs at major shops in Beijing and Shanghai. Disney Buena Vista Home Entertainment is eyeing similar deals.ever, Beijing nominated three cities ?Beijing, Shanghai and Guangzhou ?where cinemas could be revamped with the use of foreign funds. Until this time, involvement of foreigners in the Chinese film industry was limited to selling a small number of movies, making join-venture movies and leasing sophisticated production equipment.
Modern film complexes are popping1 1autions. In Shandong province the Zhonghua Film City in Zichuan Amusement Park was opened earlier this year, boasting the biggest screen in the world -30 metres wide and 20 metres tall. All the technology for the US$4m project was sourced locally. Shanghai now boasts a US$2m six-screen cinema partly funded by Singapore Technologies Corporation and Golden Harvest.