Taiwan’s Government Information Office (GIO) has informed Prince Of Tears director Yonfan that it will take back the film’s $306,000 (NT$10m) subsidy unless it withdraws as Hong Kong’s selection for the foreign-language category of the Academy Awards.

The film, which recently had its world premiere at Venice, is set in 1950s Taiwan during a period of anti-Communist hysteria known as the White Terror.

Although set in Taiwan and starring Taiwanese actors Fan Chih Wei, Terri Kwan  and Joe Chang, the film has a Hong Kong director, Hong Kong producer in Fruit Chan and is a co-production between Hong Kong-based Far Sun Film and Taiwan’s Peony 5 Film Co.

The Federation of Motion Film Producers of Hong Kong said yesterday (September 8) it had selected the film because it has an arthouse style that is better suited to the tastes of the Academy. In previous years, Hong Kong has selected action and other genre films that have failed to make the cut to the final five contenders for best foreign-language film.

Meanwhile, the GIO also announced yesterday that it had selected Leon Dai’s award-winning No Puedo Vivir Sin Ti as Taiwan’s entry for best foreign-language film.

Yonfan said that the GIO’s reaction “is not in keeping with the intent and spirit of co-production…..If the GIO refuses to let others submit Prince Of Tears to the Oscars after Taiwan passed up such an opportunity, Peony 5 would rather abandon the NT$10m production subsidy than abandon its chance to receive higher artistic recognition.”

An increasing number of Chinese-language films combine talent and financing from Hong Kong, Taiwan and mainland China, making it difficult to define a film’s nationality. The matter is further complicated by the tense relationship between China and Taiwan, with the former claiming the latter as a renegade province, although relations have recently warmed following the election of a pro-Beijing government in Taiwan.

Last month, the GIO revoked its $122,000 subsidy for Miao Miao, directed by Taiwan’s Cheng Hsiao-tse and produced by the Taiwan branch of Hong Kong’s Jet Tone Films, on the grounds that Jet Tone had used a Hong Kong rather than Taiwan address when it submitted the film to the Melbourne International Film Festival.

However this fact only emerged after Jet Tone pulled the film from MIFF around the same time that six Chinese films were withdrawn in reaction to the festival’s screening of The 10 Conditions Of Love about Uyghur activist Rebiya Kadeer.