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LCQ2: Efforts in assisting local film industry in opening up Mainland market
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    Following is a question by the Hon Ronny Tong and a reply by the Secretary for Commerce and Economic Development, Mr Frederick Ma, in the Legislative Council today (May 21):

Question:

    The Mainland and Hong Kong signed the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) in 2003. Liberalisation measures under CEPA I to III have come into effect respectively since January 1 of 2004, 2005 and 2006. Regarding the liberalisation measures applicable to the film industry, will the Government inform this Council:

(a) whether it knows the respective numbers of relevant applications in respect of the following six measures since their implementation: under CEPA I: Chinese language motion pictures produced in Hong Kong are allowed to be imported for distribution on the Mainland on a quota-free basis after vetting and approval; motion pictures jointly produced by Hong Kong and the Mainland are allowed to be treated as Mainland motion pictures for the purpose of distribution on the Mainland; under CEPA II: Hong Kong service suppliers are allowed to establish wholly-owned companies on the Mainland on a pilot basis; these companies are allowed to engage in the distribution of Mainland-produced motion pictures; under CEPA III: the Cantonese version of motion pictures co-produced by Hong Kong and the Mainland are allowed to be distributed and screened respectively in Guangdong Province after obtaining approval;

(b) among the aforesaid cases, the respective numbers of approved cases with and without amendments, rejected cases and the reasons concerned, as well as those under consideration; and

(c) of the measures the Government currently has to help film service suppliers of Hong Kong tackle various administrative barriers on the Mainland and fully make use of the advantages provided by the liberalisation measures under CEPA, so as to enable more Hong Kong-invested motion pictures to be distributed and screened on the Mainland?

Reply:

Madam President,

    The Hong Kong Special Administrative Region (HKSAR) Government has been supporting the local film industry in developing new markets including the huge Mainland film market. The film industry is, in fact, one of the sectors that have benefited most from the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) since it came into effect in 2004. Before responding to the question raised by the Hon Ronny Tong, I would like to brief Members on two general points concerning the promotion of the Hong Kong films in the Mainland market. 

    First, the HKSAR Government does not have the figures regarding the number of applications filed to the Mainland authorities by the local film industry for co-production approval and/or Mainland distribution as requested in parts (a) and (b) of the question. While it has been our established policy to assist the film industry in exploring the Mainland market and to maintain close ties with the industry to understand its needs, we do not add unnecessary administrative burdens to industry players and require them to report to the HASAR Government details of their commercial activities in the Mainland. It is also an industry norm for production companies to form a partnership to produce a film project. Such partnerships are therefore formed on a project-by-project basis and will dissolve once the film project is completed and distributed. As such, we cannot trace back the detailed record regarding the vetting, approval and distribution of films produced by Hong Kong (Hong Kong productions) and co-produced by Hong Kong and the Mainland (Hong Kong-Mainland co-productions) in the Mainland during the past four years. That said, I will provide some relevant figures for Members' reference shortly.

    Second, Hong Kong productions to be distributed outside Hong Kong must follow the approving and relevant administrative mechanisms of those jurisdictions. When promoting Hong Kong films in the Mainland market, the HKSAR Government and the industry have from time to time suggested to the Mainland authorities streamlining procedures to facilitate market access and commercial operation. It is however clear that we shall not and could not seek unreasonable changes to specifically accommodate to our own need.

    Set out below is my reply to the Hon Tong's question.

(a) Since the implementation of CEPA I, in Guangdong Province where most Hong Kong productions and Hong Kong-Mainland co-productions are screened, a total of 30 films were screened in 2004, 31 in 2005, 29 in 2006 and 40 in 2007. These represent a substantial increase as compared with the figures prior to the implementation of CEPA in 2004. In addition, seven Hong Kong-Mainland co-productions hit the Mainland Top 10 Box Office chart for Mainland films in 2004 and 2005, and nine hit the same chart in 2006 and 2007. From 2004 to 2007, Hong Kong-Mainland co-productions won 166 awards in various overseas and local film festivals. Within four years of time, achievement of the Hong Kong-Mainland co-productions has been outstanding, both in terms of box office and reputation.

    In the three years following the implementation of CEPA II, a total of seven Hong Kong companies have received permission to operate film screening business and six companies to distribute Mainland motion pictures in the Mainland.

    In the two years following the implementation of CEPA III, information from cinemas in Guangdong Province shows that among the Hong Kong productions and Hong Kong-Mainland co-productions approved for screening, over 90 per cent were distributed in Putonghua and Cantonese at the same time.

(b) CEPA offers various forms of preferential treatment to the Hong Kong film industry in accessing the Mainland market. Hong Kong productions and Hong Kong-Mainland co-productions to be screened in the Mainland are still required to comply with the Regulation on Film Administration of the Mainland as well as censorship guidelines promulgated by the State Administration of Radio, Film and Television. For example, according to the prevailing guidelines, films with excessively horrifying scenes, highly irritating plots of murder, violence, drug abuse or gambling, or contents involving evil spirits and devils or advocating evil cults and superstition may not be approved. In addition, Hong Kong-Mainland co-productions should comply with the relevant conditions set out under CEPA. For instance, at least one-third of the leading casts must be from the Mainland. As I have explained earlier, statistics on applications and approvals for films in the Mainland are not available.

(c) The HKSAR Government has been assisting the local film industry in opening up the Mainland market by various means. Since CEPA came into effect in 2004, the local film industry has not only benefited from the arrangements on the import and distribution of Hong Kong productions and Hong Kong-Mainland co-productions, but has also been allowed to provide, in the form of joint venture, sound and video recording product distribution services in the Mainland, and to operate film screening business on a wholly-owned basis by renovating or constructing cinema theatres. These measures have not only brought business opportunities to the Hong Kong film industry, but also facilitated the promotion of Hong Kong productions and Hong Kong-Mainland co-productions in the Mainland. The HKSAR Government will continue to help the local film industry seek further access to the Mainland market under CEPA.

Ends/Wednesday, May 21, 2008
Issued at HKT 12:43

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