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Responding to Hong Kong calls for greater access to a booming market, the Closer Economic Partnership Arrangement (CEPA) was implemented in January 2004. With proper CEPA clearance, Hong Kong companies are allowed to do business in the mainland via joint venture with a Chinese partner. Under CEPA, Hong Kong movies may count as domestic Chinese releases, thus exempt from the annual quota of foreign films allowed into China and not subject to a box office cap of 13 per cent, as prescribed for foreign films by CFG.

According to Yin Hong’s report, in 2004 CFG produced 35 features, 110 TV films and invested in 52 films (Yin and Wang 2005: 20), becoming the country’s dominant film producer. This is clear in its involvement in dapian, blockbuster pictures imported from abroad or home grown. Chinese dapian (‘big pictures’, blockbuster films) began with Hero (2002), followed by House of Flying Daggers (2004), Kung Fu Hustle (2004), The Promise (2005), The Banquet and Curse of the Golden Flower (2006). These domestic hits are mostly wuxia martial arts, historical costume pictures and boast famous stars, spectacle and high technology.

CFCC not only serves as the exclusive agent for co-production, it also acts as watchdog, censoring scripts and screening applications, and assigning suitable domestic studios for line production. CFCC’s role has become more important in film marketization. First, with the WTO entry, China has actively pitched its location/cost advantages to foreign projects and in return, expects to raise its international profile, seeking technical know-how and creating employment for domestic film workers. Recent examples include The Painted Veil (Warner Bros, 2006), The White Countess (Merchant Ivory, 2006) and animated feature The Magic Gourd (Disney, 2007).

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