The Beiqijia exit from the Jingcheng Expressway is about an hour northeast of Beijing. The Baolong Apparel Company, ground zero for the manufacture of costumes for major period-piece films, sits here on the outskirts of the city. Though nothing special from the outside, the facility's interior walls are decorated with posters from Hero, Curse of the Golden Flower, and House of Flying Daggers that highlight its costuming achievements. When we arrive, Taiwanese director Su Chao-pin and Japanese costume designer Emi Wada are discussing the look of characters in Su's new film, Jianyu Jianghu.

Wada won an Oscar in 1985 for her costumes for Akira Kurosawa's Ran, which she spent three years creating. More recently, she has become the go-to designer for mainland Chinese period films. Pressed for time after only receiving the Jianyu Jianghu script in mid-August 2009, Wada has nonetheless managed to design more than 70 costumes for the assassins, knights-errant, officials, and common folk that appear in the film. Featuring large swaths of blue and red fabric, Wada's designs are quintessentially East Asian and tremendously visually effective.

The Chinese film industry performed very well in the wake of the 2008 global financial meltdown, growing its box-office receipts by 30% and continuing to rapidly add new theater complexes. The photo on the facing page shows Beijing's renowned Wanda International Cinema.

Transnational cooperation

Jianyu Jianghu is a classic example of cross-cultural cooperation. Mandarin, Cantonese, Japanese, and English are all used in the workplace. Director of photography Horace Wong, martial arts choreographer Stephen Tung, and most of the key production staff are from Hong Kong. And the film itself is an even bigger production than Su's 2005 horror film Silk.

Two years ago, director John Woo's producer Terence Chang asked Su to tailor-make a martial arts film for Malaysian-born star Michelle Yeoh. The film tells the story of a female assassin skilled in the martial arts who wishes to leave the underworld and take up an ordinary life. She gets to know a plain, optimistic man in a small town and starts to think about settling down, but the martial-arts underworld proves reluctant to let her go. When they come after her seeking the much coveted Buddhist relics she possesses, a bloodbath ensues.

Chang funded the US$11.5 million production by assembling a group of investors that included China's Beijing Galloping Horse Productions, Hong Kong's Media Asia, and Taiwan's Sanlih Entertainment and Gamania.

Su is the only Taiwanese on the film's production teamshoot, but as director, the venture's success rides on his shoulders. His view of the project is matter-of-fact: "It's been too long since Taiwan shot a major period piece. The production criteria on the two sides of the strait are just too different." But he goes on to explain that shooting in Shanghai and at the Hengdian Studios in Zhejiang costs about one-fifth what it does to shoot in Taiwan. "The Chinese prop and costume makers are professional enough, and there are clear advantages in terms of both human and material resources," says Su. "I think if I continue to direct films, I'll likely find the road easier in China."

Growth in Chinese film production, 2001-2008 / source: China Film Industry Report 2008, china.com.cn

More product, rising ticket sales

In the book Culture + Creativity = Fortune, Hua Jian, a researcher with the Shanghai Academy of Social Sciences, writes that "good films need big stages," a statement that aptly describes the current state of Chinese film. How big is the stage for Chinese film?

In 1993, China's State Administration of Radio, Film and Television (SARFT) instituted a series of film reforms. The first allowed private-sector participation in the distribution of films by allowing production companies and local distributors to decide for themselves how to release films rather than requiring that all films be released through the formerly state-run China Film Group Corporation. In 1996, SARFT permitted private enterprises, NPOs, NGOs, and citizens to invest in or otherwise support the production of films. In 2000, SARFT began allowing joint ventures to own and operate movie theaters provided the foreign investors were minority partners. In 2003, SARFT permitted foreign companies to enter the Chinese film-production business.

The liberalization of film policy has resulted in investment opportunities for private enterprise and increased the number of films made from an average of about 100 per year in 2001 to about 400 per year since 2007.

Ticket sales have grown even more rapidly. Though box-office receipts were just RMB1 billion in 2003 when the SARS outbreak closed theaters for three months, they have grown by RMB500-600 million per year since. In 2008, China's movie industry bragged that its revenues had reached RMB4.3 billion and that its 30%-per-annum growth was outpacing that of the electronics industry and traditional manufacturers. In fact, box-office receipts increased by more than 400% over just six years.

Many now predict that within 10 years China will have the world's single-largest movie market.

"The next three to five years will be a golden age for Chinese film," says Yu Dong. "Ticket sales will certainly exceed RMB10 billion. Where we are now is only the beginning." Yu is president of Polybona Films, which in 2002 became the first privately held firm to receive a film distribution license in China. He says that the US, with a population of more than 300 million, supports more than 30,000 theaters and produces more than 600 films per year. Yu sees China, which is adding screens at a rate of about 600 per year, having 4,600 by the end of 2009, and projects, based on China's 900 million movie admissions in 1979 (when tickets cost just RMB0.10), that this figure will grow by at least another 10 times.

Chinese cinema box-office revenues, 2003-2008 / source: China Film Industry Report 2008, china.com.cn

Chinese vs. Western films

Though China has made big investments in theater construction, the Chinese film market still differs from those of Taiwan and Hong Kong in a very significant way: the Chinese government refuses to allow Hollywood films to dominate its market and actually has an annual quota for Western film imports. Though the World Trade Organization cracked open the door to the Chinese market in 2001 by forcing China to liberalize the importation of films, its efforts have had limited effect. China continues to protect its domestic film industry and today permits only 50 foreign films per year into the country, just 20 of which may be American.

Though the Chinese limited US imports to just 10 films per year prior to 2001, American films were accounting for more than 50% of Chinese box office receipts. In those days, the Chinese industry was no match for Hollywood. It had too little capital, too few skilled personnel, too much old equipment, and an industrial system that hadn't yet matured. But as reforms took hold and the economy transitioned away from central planning and towards a market system, the Chinese industry began attracting talent. This enabled locally produced films to outsell imports for the first time in 2003, achieving a 55% market share that they have since maintained.

Taiwanese director Kevin Chu's year-end spectacular The Treasure Hunter stars superstars Jay Chou and Lin Chiling. Shot over several month's in the Gobi Desert, the film features many thrilling scenes.

The Hong Kong and Taiwan edge

Co-productions have been at the heart of the mainland film market since 2003.

China has permitted co-productions with foreign filmmakers for 30 years. It began in 1979 when China initiated a soft diplomacy based on cultural and athletic exchanges with the rest of the world. China's purpose was to end its long isolation and create the impression that it was reforming and liberalizing. Hu Yaobang, then head of the Publicity Department of the Communist Party of China, inaugurated Chinese-foreign film cooperation by recommending the establishment of the China Film Co-Production Corporation (CFCC) to serve as a unified management entity under SARFT. (See "The Last Emperor," p. 20.)

Hong Kong has long been China's most important co-production partner. In fact, Hong Kong filmmakers have been involved in 70% of the 750 co-productions made over the last 30 years. It also accounted for 70% (201 projects) of the 286 projects shot during co-production's 2001-2008 heyday. Its involvement dwarfs that of Taiwan (23 projects) and the US (29 projects).

CFCC president Zhang Xun recently explained the co-production application process to an eager audience of Taiwanese directors and producers in attendance. Speaking on October 26 at the third annual Cross-Strait Film Co-Production Forum in Taipei, Zhang said that the CFCC requires that the story and characters involve mainland China in some way, but places no restrictions on the setting. She advised applicants to avoid stories that are of a sexual, violent, or religious nature, touch on the reputation of other nations, are damaging to China's image, are too vulgar, or violate Chinese law. She added that while the screenwriter or writers may be of any nationality, at least one-third of the principal actors must be Chinese.

Once the applicants have completed their script, they must seek out a mainland production partner of good commercial standing, either state-run or private. When the co-producers have finished negotiating investment ratios, markets, and the allocation of rights, they must submit their script to CFCC for review. If the script doesn't meet the appropriate criteria, CFCC will ask that it be revised. CFCC will issue a permit only after it has approved a script. Once the film is complete, the producers submit it to SARFT for review. SARFT's approval is required to release a film in China.

Taiwanese director Chen Kuo-fu's long-delayed The Message is a huge production with a large cast. The film, a tense spy-versus-spy thriller, has kept audiences on the edge of their seats in both China and Taiwan.

The Hong Kong experience

China's stringent standards for scripts and films have caused many Hong Kong and Taiwanese filmmakers to hesitate. After all, did the Hong Kong film industry's march into China more than a decade ago save the Hong Kong industry, or destroy the diversity and character that made it special?

Hong Kong and China signed the Close Economic Partnership Arrangement (CEPA) in June 2003. Aspects of CEPA that affected the film industry included agreements that Mandarin-language Hong Kong films distributed in China would not be counted under the quota on imported films; that Hong Kong-China co-productions would be considered domestic Chinese films for purposes of distribution in the mainland; and that Hong Kong companies could participate in the construction of movie theaters in China as partners in joint ventures, and could operate them via holding companies.

China went even further in January 2005, permitting Hong Kong companies to establish wholly owned subsidiaries in China to distribute domestically produced films. All of these measures made it easier for the Hong Kong film industry to do business in China.

Taiwanese director Kevin Chu's year-end spectacular The Treasure Hunter stars superstars Jay Chou and Lin Chiling. Shot over several month's in the Gobi Desert, the film features many thrilling scenes.

The allure of co-production

At an October 2009 conference on Chinese-language film production sponsored by Taiwan's Government Information Office, Hong Kong producer Ng See-yuen and director Peter Chan shared their thoughts on co-production with Taiwanese film industry personnel.

"Hong Kong film has always had one fatal flaw-our population is under 7 million," said Ng. "Even if half of us were to go to the movies, it wouldn't be enough to support the industry. We desperately need foreign markets." Ng said that even while the industry was booming 20 years ago, he recognized that it would have to develop the China market to survive.

Ng, who is an investor in seven movie theater complexes in China, also described recent changes in the Chinese film market. "They haven't been an H-bomb, but they been the bomb," said Ng. Going to the movies is a social thing for people under 30, and businesses sometimes rent out a whole theater to let their employees blow off steam.

Peter Chan caught the eye of Steven Spielberg and came to Hollywood in 1998 to direct The Love Letter. He returned to Asia in 2000. Looking at the trends in Chinese film, Chan recognized that period pieces and fantasies weren't his thing and that contemporary topics were still taboo. He therefore began making films for the 300-million-strong combined market of Japan, Korea, Thailand, Taiwan, and Hong Kong. Chan traveled from nation to nation, persuading film companies to invest in Asia's young directors but in the end lost mountains of money. With only horror outings such as The Eye and Three filling seats, he made numerous sequels.

"Horror movies come in just a few flavors," said Chan. "No one's come up with new stories." When a film company later wanted to do a musical, he finally went to China to shoot. In 2003, Chan won a Taiwanese Golden Horse award for Best Director for Perhaps Love. He went on to direct The Warlords, and is now producing Bodyguards and Assassins, which is slated for release at the end of this year.

While Taiwan and Hong Kong audiences are split along lines of age, socio-economic status, and taste, and are difficult to market movies to, the mainland audience is relatively undifferentiated and views movies simply as entertainment for the masses.

Chan said that when eight stars show up for a premiere in Hong Kong, the media coverage focuses only on gossip such as who is holding whose hand. Forget about the plot. As often as not, the Hong Kong media fails to mention even the title of the film. As a consequence, marketing a movie in Hong Kong is an exercise in futility. The mainland, on the other hand, sees movies as a cultural mechanism for catalyzing societal progress. Its media therefore often goes into depth in its reviews, spending as many as five or six pages on production-related topics. In Chan's view, you have to take advantage of the fact that the mainland media has such high expectations of film.

China, Taiwan, and Hong Kong have been co-producing television programs and films for years, most of them period pieces. The photo shows a production team from Taiwan and Hong Kong shooting a period TV drama at China's largest TV and film production center-Zhejiang Province's Hengdian Studios.

Obstacles to co-production

When weighing the plusses and minuses of Hong Kong's foray into China, some scholars argue that it has resulted in Hong Kong making fewer and fewer of the kinds of movies it excels at-the ghost stories, vampire films, sexcapades, comedies, cop-and-robber shoot 'em ups, and gang-war movies that made it famous-and that this places serious constraints on the industry's creativity. More pragmatically inclined Hong Kongers have a different view, arguing that survival comes first.

"If it really kills off the character of Hong Kong cinema, there's not much we can do about it," said Chan. "You can't survive without a market. If the mainland didn't kill us, Hollywood would have. At least movies made in China are shot in Chinese."

Speaking about the CFCC evaluations that so worry filmmakers, Chan said his own experience has been that the reviewers take issue with odd things. For example, they asked him to make good-guy characters and bad-guy characters more explicitly good and bad. "The ideology revealed in Chinese and Hollywood films is virtually the same: they always end with the good guy winning and the bad guy dying," said Chan. This isn't just one of the review committee's criteria; it's also likely want the audience wants.

But in The Warlords Chan was determined to "make mainland viewers uncomfortable by keeping them hanging until the end." Based on the assassination of Qing-Dynasty general Ma Xinyi, The Warlords describes conflicts over justice that arise among three sworn brothers. The film keeps viewers guessing about whether the eldest of the three, played by Jet Li, is actually a good guy.

"Jet Li bows before the Empress Dowager and asks for a tax cut on behalf of the people. But he also kills his brother and that brother's wife," said Chan. "The Warlords is a gangster movie, successfully dressed up in another guise."

Chan admits that, as a father, there are a lot of movies he won't take his daughter to see. The mainland authorities view themselves in much the same way. They are the parents of the people, evaluating these movies for the good of audiences. Reviewers also take into consideration the mainland's immense size and the uneven level of education of its people. They aim to give audiences films they know they'll understand, that "don't require too much thinking."

Filmmaking is an expensive, high-risk venture. More and more, the industry has been turning to transnational co-production as a means of distributing that risk. The photo shows mainland director Tian Zhuangzhuang (second from right) and Japanese star Joe Odagiri (in the center wearing a hat) on a visit to Taiwan to promote their film The Warrior and the Wolf.

Give and take

On the other hand, "In recent years, the mainland's reviewers have gotten more liberal. A few years ago, violent and gory films like Crazy Racer, The Message, or City of Life and Death would have had little chance of being approved. But these days they pass," said Chan.

Hong Kong's filmmakers agree that the current mainland film review process is something of a negotiation, with room for give and take.

When veteran Hong Kong producer Terence Chang submitted Red Cliff for review, SARFT stated that Taiwanese actors Chang Chen and Lin Chiling's accents didn't sound "Chinese," and wanted their parts redubbed. Whereas Lin later acknowledged that her voice sounded too immature and agreed to a dub, negotiations led to Chang's original voice track being retained.

Naturally, talking things over doesn't always work. Take director Peter Lee's My Fair Gentleman, which was released in October. The film tells the story of a Taiwanese woman who opens an ad agency in Shanghai and decides to turn a nouveau-riche tech mogul into a gentleman. The movie originally included a scene of a business meeting held in a smoke-filled office. SARFT asked that the scene be cut because "we don't smoke cigarettes during meetings." While Chang knew that was not the case, he had no choice but to comply.

Chinese cinema box-office revenues, 2003-2008 / source: China Film Industry Report 2008, china.com.cn

"Greater China" themes

The movie business is oriented towards creative and novel subject matter, and is always seeking the kind of talent that can deliver big hits. With China aiming to build its own Hollywood, it must constantly attract top talent who can bring new ideas and help the Chinese industry build momentum. What do Taiwanese filmmakers, relative latecomers when it comes to working in China, need to do to adapt to this environment?

"Hong Kong's talent pool is threatening to dry up," says Chang. "We've had few new directors emerge in recent years, whereas Taiwan has an abundance of young directors." And many of them are now working in China. As well as serving as executive director for Su Chao-pin's Jianyu Jianghu and Cheng Hsiao-tse's Jin Zai Zhichi, Chang is also currently putting together a new project for Hear Me director Cheng Fen-fen.

Polybona Films is betting on both Taiwanese and Hong Kong talent. In addition to investing in Chan's Bodyguards and Assassins, the company has been involved with preparations for Zhong Kui and a remake of The Flying Guillotine. It also invested in Like a Dream, a film that brought together Macao-born director Clara Law and Taiwan's Arc Light Films and ultimately garnered nine 2009 Golden Horse nominations.

"Taiwan is the ninth-largest overseas market for US films, and has annual ticket sales of about RMB1 billion [roughly NT$4.9 billion]," says Yu Dong. "Its consumers are capable of supporting a film industry. The problem is that the domestic industry is not well established. Taiwanese audiences also have a better and deeper understanding of Chinese culture than Hong Kong's middle class, which has generally had a Western-style education." Yu believes that with the rise of the Chinese-language film market, Taiwan and Hong Kong's film industries should be looking for subjects with broad appeal in Chinese-speaking regions, pushing the box office of Chinese films to new heights and gaining a share for themselves.

China produces roughly 8,000 episodes of television programming per year, about 25% of which involve historical subject matter. Demand for props and costumes is high, and production teams are very experienced. The photo shows the prop room of a studio in Huairou, near Beijing.

Looking ahead

China's Huayi Brothers Media has seen its box-office receipts rise steadily in recent years. During this year's National Day Golden Week, its spy film The Message-Taiwanese director Chen Kuo-fu's first directorial outing in seven years-went head to head against the propagandistic The Founding of a Republic.

"The Message changed Huayi's filmic language," says Huayi president James Wang. Long criticized in the mainland media for his reliance on director Feng Xiaogang, Wang says, "I wanted to achieve so many things with this film. It's a new kind of film, helmed by two people [Chen Kuo-fu and Gao Qunshu] who aren't yet a guaranteed draw in the mainland , and utilizing performers under contract to Huayi."

"Twenty years ago, Hong Kong was the center of Asian film," says Wang. "But that's a negative now. Hong Kong film is too oriented towards cops, gangsters, martial arts, and silly comedy. It lacks cultural depth and a sense of history." Wang believes that China's film industry can use Hong Kong filmmakers as production teams, but doesn't like the idea of putting them in the creative lead. He argues that with the market now in China, filmmakers need to serve mainland audiences and that Taiwanese and mainland filmmakers are closer to one another in terms of their cultural background.

Looking ahead, with Hollywood's 2009 blockbuster Transformers: Revenge of the Fallen posting the biggest box-office take of the year (RMB500 million) in spite of having been less heavily marketed than The Founding of a Republic, China's film industry is feeling the heat. How long can the Chinese government continue to limit foreign films' access to the mainland market? The upcoming golden age of Chinese film will be crucial to building momentum for Chinese-language film. The industry must take advantage of it to cultivate young directors and experiment with new genres and stories. If the Chinese film industry is to be ready for the battle ahead, it must also strive to integrate the film cultures of Taiwan, Hong Kong and the mainland on the silver screen.

Movies are clearly helping facilitate cultural understanding and harmony among Hong Kong, Taiwan, and the mainland. Perhaps mainland audiences have a hard time understanding the love-hate relationship the Taiwanese have with their former colonial masters, the Japanese, as depicted in Cape No. 7. Taiwanese audiences might have a similarly difficult time with China's "wishful historical interpretation of the 1949 civil war" when the dogmatic The Founding of a Republic comes to Taiwan early next year. But these filmic exchanges are about more than box office receipts. They narrow the cultural chasm and raise the prospect of working together to build a "dream factory" for the silver screen.

James Wang, president of Huayi Brothers Media, believes that the Chinese film market still has room to grow tenfold. Huayi has been behind hits such as Big Shot's Funeral and Assembly.

Growth in Chinese film production, 2001-2008 / source: China Film Industry Report 2008, china.com.cn

The Chinese film industry performed very well in the wake of the 2008 global financial meltdown, growing its box-office receipts by 30% and continuing to rapidly add new theater complexes. The photo on the facing page shows Beijing's renowned Wanda International Cinema.

Taiwanese director Su Chao-pin's chivalric Jianyu Jianghu is currently filming in China. In the photo, Su and renowned Japanese costume designer Emi Wada discuss character designs in Beijing in October 2009.