China is offering two new initiatives to the Hong Kong Film industry as part of the Hong Kong Closer Economic Partnership Arrangement (CEPA). 

The move will allow Hong Kong companies to distribute audio-visual content in mainland China and will also allow Hong Kong post-production companies to provide services for films made on the mainland and China-Hong Kong co-productions.

Previously, Hong Kong-based companies needed a partner based in mainland China to set up an audio-visual distribution company, and they could not own more than 70% of the company.

In post-production, the Chinese authorities did not allow production companies to send films to overseas labs for special effects or processing works unless there were special technical requirements. The decision to allow post-production in Hong Kong is expected to boost the industry as in the past a lot of post-work on local blockbusters has been carried out in Thailand.

CEPA, which was set up in 2003, has previously given various exclusive benefits to Hong Kong film industry. Hong Kong films are not longer counted in the China’s foreign film import quota and production companies have benefited from lighter regulation on co-producing films with Chinese companies. Also, Hong Kong investors are allowed to own up to 75% of a mainland cinema management company, while foreign companies are restricted to 49%.

The two new measures will be taken into effect on October 1.