MODERATOR: Thank you. So when we look back at all these films; they are not co-productions. But some of them will eventually hit the mainland market, some to other places. All our films today, with the exception of Lover's Discourse, will screen at the Hong Kong International Film Festival, as well as in theaters soon.

I want to ask each filmmaker about our topic today, that is about co-production. It is difficult to involve co-production with certain film topics. Given the topics of Hong Kong films, how can Hong Kong filmmakers handle co-productions?

Perhaps Mabel can give us some insight first. What will your next film be like?

You worked with the government on Echoes of the Rainbow. What do you think the next step is, without co-production?

MABEL CHEUNG: Actually, I'm not completely against co-production.

PANG HO-CHENG / LAWRENCE CHENG: Nor am I.

MABEL CHEUNG: We don't hate it or anything. I feel that as creative people, we shouldn't limit ourselves. We're not Woody Allen, who said his films would never leave New York. And actually he has shot in Spain and Britain now.

Echoes of the Rainbow just happens to be a film about Hong Kong. So I didn't want to force it to meet the criteria of co-production. For example, one-third of your actors must be from mainland China … something like that. Or that you would have to shoot on location in China.

However, this film is about Hong Kong. I felt that we shouldn't have to limit our creative choices just to fit the mold for co-production, since Hong Kong is already a small part of one country.

If I had a good story about mainland China, I would go shoot it there anytime as well.

I have done co-production projects before, like The Soong Sisters. I had no problem with that. So I am not adamantly against co-productions. There is plenty of space in both realms. I feel that we should widen our perspectives.

MODERATOR: All filmmakers, be it directors, producers would love the chance for co-production. But what if you didn't have that kind of backup?

CHAPMAN TO: Well, we heard from a few producers just now: the actors will just have to take a cut in their fee.

I'm like that too. But when I'm the actor, that's when I refuse. Like when Hing-kai came to me trying to negotiate a lower fee, I refused.

MABEL CHEUNG: Well, we can't do this all the time. I can't ask Sandra to do this a second time for me.

CHAPMAN TO: Yes, and Lawrence will have to go talk to Jaycee's mom.

LAWRENCE CHENG: No, some actors, like me, even if we do it for free, no one would want us.

You understand that? That's the sad part. Do you agree? As an actor, if I do it for free, and it's a co-production, then sorry, I can't do that.

So that's why we have to find actors with market potential, and those actors are few and far between.

CHAPMAN TO: Why would they be willing to take a cut?

Maybe they have shot many films that paid well. But those are not films they wanted to do.

LAWRENCE CHENG: Yes, maybe.

CHAPMAN TO: Maybe the script didn't have the co-production pull, but he thinks it's very interesting, so he'll take a cut and shoot it, just because he wants to do it. But if he does it all the time, what will he do for a living?

MODERATOR: Actually all six films feature renowned casts.

Let's talk about what if Hong Kong films have no China market. We all know the importance of a good cast. What if we really cannot find a good cast? What other ways can we draw co-production interest?

LAWRENCE CHENG: Cartoons, or animation without a real-life cast.

MABEL CHEUNG: A lower cost production, within a few million, then go to the Film Development Fund.

LAWRENCE CHENG: $2.5 million. Can you do it for $2.5 million?

CHAPMAN TO: If there's no cast, $1.5 million nowadays if you're lucky.

LAWRENCE CHENG: What? It's $1.5 million now?

CHAPMAN TO: $1.5 million would be deemed as too much.

MABEL CHEUNG: Well, with the Film Development Fund, it's not just one-third now.

I think it's about 35 – 40%.

PANG HO-CHEUNG: But the Film Development Fund requires that you have a solid cast as well … Like my first project, I already cut my actors' fees until it was almost like … just a lai see as a token of thanks.

LAWRENCE CHENG: Oh … so you're TVB.

PANG HO-CHEUNG: I mean, it was really that low … and still, I needed $10.2 million then. So I applied to the Film Development Fund; then the committee had a look. And their feedback was, my film didn't have China market potential, it's too risky. If only the budget was only $6 million, they can fund it. I was like, whoa, they only make up part of the funding. But they are more calculating than any other commercial organization.

LAWRENCE CHENG: I thought they didn't know how to do that.

MABEL CHEUNG: No, they have a whole panel that specializes in calculating this. They're made up of people from the industry.

LAWRENCE CHENG: So they're like informants!

MODERATOR: Actually, for new directors it wouldn't matter if you didn't know how to pick a cast, because it can't be done.

Do we want to see how we ...

MABEL CHEUNG: I think they would calculate that as well, because they have to be accountable to taxpayers. They would calculate like the film companies.

PANG HO-CHEUNG: I feel they would know better than film companies. I think why the Film Development Fund exists … to support small budget films, and that's important because a lot of film companies don't support small budget films.

And they don't because it's risky. These films are hard to sell.

The government supports it but you have people who calculate each and every factor. Then why support it? Because if that formula works, then there would be no need for the Fund at all. A lot of commercial organizations would fund the films themselves.

CHAPMAN TO: And also the whole funding together process … for example, I want to shoot a film for $6 million. If the government sponsors $3 million, I have about another $3 million left. So if I have a partner who is willing to shell out 70%. He'll say, hey, why not just shoot it with $4.2 million, then I won't just fund it for 70%. Perhaps he doesn't want to fund it together with the government. It's not that unusual. So how do I choose then? I'll have my actors take a cut.

$4.2 million, that's not bad. I'll have the actors take a cut, I won't take so much either, and just shoot it. Or have the director take a cut and shoot it.

It's quite embarrassing, to jointly fund a film because some of the investors ...

PANG HO-CHEUNG: Unless your investor only had $4.2 million at hand, then he'll be willing to do it.

CHAPMAN TO: Yes, exactly.

That's not a lot of money to make a film. But on the contrary, he will benefit then.

MABEL CHEUNG: Because for our budget, for $12 million … Sandra Ng took a big cut, so did Simon Yam. Then Alex Law and I took a bigger cut still. After all that, it was still a $12 million budget. So the actual budget was more like $16 million.

LAWRENCE CHENG: You haven't counted in distribution and marketing fees.

MABEL CHEUNG: Pardon?

LAWRENCE CHENG: You know, distribution fees, and publicity too.

MABEL CHEUNG: No, we subtracted that already.

LAWRENCE CHENG: Yes, but the Fund wouldn't give you that, you know.

MABEL CHEUNG: That means we had a $16 million budget and we shot $12 million. That's good for everyone involved.

CHAPMAN TO: Lawrence is right about publicity fees. The sponsor for 70% has to bear that cost too.

PANG HO-CHEUNG: From what I know I think they do it by ratio.

LAWRENCE CHENG: Do you understand? Let's say if you give 30%, and I take this money, and I use it for production. Okay, so after that part is finished, I need to calculate how much I need for distribution and publicity. Then I would need to look for this funding.

I don't have it, you see. If I did, I would have shot it already. I don't have it, and I have to ... what?

Yes, I can calculate that.

MODERATOR: In the budget, marketing is included, but not P and A.

LAWRENCE CHENG: But I hear that it's being upgraded, it's being included now. The next cycle, for sure. So we should come up with more scripts.

PANG HO-CHEUNG: There is something about the ratio of mainland actors that adversely affects this whole thing. Sometimes they restrict certain roles to certain actors in co-productions, like one-third of their main actors must be from China. So if the story is about someone from Hong Kong, it becomes very hard. For example, if you have a cop and robber film and the cop is from Hong Kong but his boss speaks Mandarin. That happens more often than you think. I feel this is harder to deal with than the film itself.

MABEL CHEUNG: I think last year there were 10 box office hits from China and 7 of them were co-productions, and the directors were from Hong Kong.

I think we don't have to worry about their being co-productions or not. If you like, you can make a film from China. If you like, you can make a film in Hong Kong. You watch how you spend, bit by bit.

I think it's a matter of "to each his own." There shouldn't be such a clearly drawn line.

CHAN HING-KAI: Actually for me, I hope that the Hong Kong market will prosper. If the box office in Hong Kong improves, it actually gives filmmakers a bit more creative control whether it's a co-production or not.

I feel it is more effective if we introduce imported films, because the script doesn't have to be approved beforehand. It can be shot whichever way anyone wanted. Although imported films make less profit than co-production film, if that does well on the Hong Kong market, that would be ideal.

MODERATOR: Are there questions from the audience?

AUDIENCE 1: I would like to ask: In co-productions, you have to consider their commercial value. But these six films are not co-productions. Did you consider your profits during the creative process?

LAWRENCE CHENG: Of course that was considered.

PANG HO-CHEUNG: Every investor considers it.

AUDIENCE 1: Because you aren't in a co-production, so that isn't the most important, right?

PANG HO-CHEUNG: We just tell investors that the film will do well in Hong Kong,

CHAPMAN TO: Then distributors will tell you how much it will make, even though I don't know how they know that.

MABEL CHEUNG: I think it's God's blessing. I mean I had no idea we could generate $10 million revenue and that I'm sitting here now, so it has to be God's blessing.

AUDIENCE 1: Actually I really want to ask Mabel Cheung. When you went to pitch to an investor, did you tell them Echoes of The Rainbow would do well at the box office?

MABEL CHEUNG: No, I never say things like that.

AUDIENCE 1: How would you propose it?

MABEL CHEUNG: I only provide the story, that it is good, that I am confident I can shoot it well.

But regarding projecting revenue, the investor knows how to do that. They're experts; they know by the cast and the plot how well it will do and where it will do well. And it's precisely because we couldn't figure it out then that we had to keep cutting our costs … We cut our own fees, cut our actors' fees.

First, we received support from the Film Development Fund, then other partners … We can only hope that our losses won't be that significant. We all believed in the film, we felt we had to support it, and that the story was good. So we thought to ourselves, even if we had a loss, it would be a small loss. To us, that would be a profit already.

I'd hoped our film would do well.

Actually, each film has its own destiny. This film happens to have a good one, so our investors received a handsome return.

AUDIENCE 1: Thank you.

AUDIENCE 2: I want to ask two questions. Director Chan Hing-kai mentioned import films. Could you elaborate on that? Also, I know that in Hollywood it is common practice for banks to get together with production companies for funding, but in my research I find that only Standard Chartered Bank seems to have had any involvement. I can't remember the name of the film now. Would you ever consider banks besides the Film Development Fund? Perhaps some banks would sponsor filmmakers?

PANG HO-CHEUNG: Actually, I want to talk about this a bit. When I go to meetings at the HAF, I have banks come up to me and ask me if I would be interested in their loans, and they are willing to do that for me as long as I own property that's worth $20 million. I mean, if I had that, I probably wouldn't be shooting.

CHAN HING-KAI: Import films definitely don't need go through the censorship process.

MODERATOR: Yes they do.

CHAN HING-KAI: Yes, but I mean not before you shoot it. It's risky because they can shoot you down after you've shot everything. Supposedly if you have one third salary in your budget, suddenly it can turn into zero. In this case we can optimistically tell the investor or the Film Development Fund that there is such a sum, so they are prepared that it could be zero any moment.

MABEL CHEUNG: Yes, but it seems that import films are still determined by the China Film Bureau. They may not import your film if they don't feel it has sufficient commercial value.

Once John Shum did that, he imported your film, didn't he? It was called Love ... something like that, right?

LAWRENCE CHENG: No, that wasn't mine.

MABEL CHEUNG: And he said it was imported half a year later. In Hong Kong, box office was only $4 or $5 million, but box office was $5 or $6 million in China, and it was only shown in Guangdong province.

That was quite good, there was something there.

LAWRENCE CHENG: I think we shouldn't ask questions about money like this because these people sitting before you here only know how to make films.

We are not the ones who know how to calculate profit.

AUDIENCE 3: When you mentioned co-productions, do you mean co-productions with the Chinese government?

There are a lot of film production companies in China. They can fund productions themselves and work with Hong Kong. I had this experience once; I didn't have enough money, but the film company found an investor in mainland China, and we didn't have to go through the Chinese government.

LAWRENCE CHENG: Did you? ... Miss, can I have your business card?

AUDIENCE 3: I mean, do your films have to go through the government?

LAWRENCE CHENG: ... I should get to know you.

MABEL CHEUNG: Actually co-production doesn't mean it has to be related to the government. Companies, or independent film studios in China, those are candidates for co-production too. There are lots of ways.

Some companies are in the textile business. Suddenly they feel a certain affinity towards the film industry. They'd show an interest in investing.

But the proper way of co-production is that you must go through the government, go through the China Film Authority. They have to look at the script first; you get a permit and then you can shoot. The problem with obtaining this is that you need to adhere to their standards to get one, so a lot of films have to fit that mold in order to get the permit.

LAWRENCE CHENG: Perhaps I can share my personal experience. I had a film once. It was all set and ready to shoot: director, production supervisor, everyone was ready. Then the script had to undergo the process to get a permit. The story was really simple: a love triangle. We got the feedback. They claimed that the leading lady had fallen in love with a married man, and that was bad. So we went back to the storyboards. We changed that. So now they lived together, they weren't married. The second feedback we received was …There's no such thing as living together in this country. Alright then, in order to fit co-production requirements, how about they didn't live together then. How about just two women falling in love with the same man? The last feedback we received, when we were ready to shoot: this is a film that carries unhealthy social messages, it is not acceptable in Chinese culture, you may not shoot it.

CHAPMAN TO: Lawrence, I have this same exact experience, but I was in my own car at the time. My driver was at the wheel; I was having an argument on the phone. The conversation was similar to what you described … arguing with the distributor, hoping we can somehow negotiate to fit the terms for co-production. After I hung up, my driver said to me, "Boss, you don't know how to do films." Then I said, "What should I do then, Shing?" His name is Shing. Shing said, "You should shoot it like this: about a man who falls for a woman." And I said, "Then what, Shing?" And he said, "Then they marry." And I said, "Then what?" And Shing said, "What do you mean what? What else can there be? Do you know how to make films?" I was very ...

LAWRENCE CHENG: Love is like that, in our world.

CHAPMAN TO: Yes, so then I felt that Shing, my driver, knew how to make films and I didn't.

CHAN HING-KAI: That's wisdom right there.

CHAPMAN TO: Yes, although he's still driving.

- End of Part 3 -

>>> Continue with Part 4