He reveals secret cost of co-productions

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Policy/Legal News

Chinese director, producer and occasional actor HE Ping 何平 (pictured) got a big reaction this week when he revealed a rarely talked about tax on film co-productions.

Moderating a panel discussion on co-productions during the Shanghai International Film Festival 上海國際電影節, He at one point mentioned a RMB150,000 ($23,100) levy imposed on the upcoming WANG Xiaoshuai 王小帥 film 11 Flowers 我１１ (2011) by state-owned enterprise China Film Co-Production Corporation 中國電影合作製片公司.

This is a fee, supposedly covering administrative costs, that is levied on all foreign films that access China as either a full- or assisted co-production.

11 Flowers, however, is the first film to use the bilateral co-production treaty between China and France, which means that the film has dual nationality and should be treated as local in both territories.

His point was made forcefully. "The French state was putting money into the film while the Chinese state was taking it out," He said. "Only when the government makes it easier to use the policies can we serve up better film dishes."

His comments provoked a spate of commentary on Chinese social networking websites and earned a quick response from CFCC, which said that it would look into the matter. It also said that 11 Flowers had been so quick to use the treaty that the organisation had not had time to adjust.

The incident and discussion also revealed that CFCC operates a sliding scale of charges depending on the country of origin of the foreign co-production partner. Films involving Hong Kong co-producers pay RMB70,000 ($10,800).

An earlier part of the discussion had involved REN Zhonglun 任仲倫, president and chairman of the Shanghai Film Group Corp 上海電影集團公司; Peter LOEHR, managing director of Creative Artists Agency (Beijing) 創新精英文化經紀（北京）有限公司; Dan MINTZ, CEO, DMG Entertainment ＤＭＧ娛樂傳媒集團; Nansun SHI 施南生, chair, Distribution Workshop Ltd 發行工作室有限公司; and Kill Bill producer E. Bennett Walsh.

Shi reminded the audience that in 1991 Hong Kong film-makers were also subject to a co-production quota.

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