You have recently become the first Chinese to be the president of the jury in the Cannes Film Festival. You seem to be closely associated with France, and a number of French people said they could easily relate to your films without any cultural barriers. What do you think are the reasons?
The success of a film depends not only on the film's quality, but good publicity and good film guides are also crucial. In this regard, my French distributor has been doing a superb job. The popularity of "In the Mood for Love" is mainly due to its relatively simple plot and characters. The film's story and background as well as the characters' relationships can be found in almost any city. For this universality, the film has been able to touch audiences in many different regions.

All your films, from "As Tears Go By" to "Days of Being Wild", "Happy Together" and "2046", feature stories happening in Hong Kong, yet they can arouse empathy from audiences in different communities and races. They have an international audience. Can you share with us some tips and insights?
The stories in my films happen mostly in Hong Kong, as Hong Kong is the place where I grew up. I have strong feelings for this city. Over the years, my creative experiences have been intertwined with happenings in this city. In filming "As Tears Go By" and "Days of Being Wild", most of the shots were taken on Hong Kong streets. For "Happy Together", although the film was shot in Argentina, the theme is also about Hong Kong. The city in "2046" is also a simulated Hong Kong created out of my subjective impressions from images taken in Thailand, Shanghai and Macau. Like most modern cities, Hong Kong has its own charm and all the characteristics of a cosmopolitan city. Stories happening here may very well happen in any other city. As I've said just now, because of this universality, my films can touch audiences outside of Hong Kong.

The film industry in Asia including mainland China, Korea and Thailand have enjoyed increased box office sales and won wide acclaim. On the contrary, although Hong Kong films dominated the Chinese film market in the 80s and 90s, the industry's development has not seen any major breakthroughs in recent years. What do think about the present Hong Kong film industry?
Hong Kong films are now in a stage of transformation. Looking back, the boom in Hong Kong's film industry had its historical reasons. Hong Kong's film industry began to develop rapidly in the 40s in the last century. It catered not only to the local market then, but also met the needs of the numerous Chinese residing overseas. By the 70s, 80s and 90s, Hong Kong films basically dominated the Asian market. Backed by such a vast market, the Hong Kong film industry had grown to be so prosperous that not only did mainstream action films and comedies have a market, but other film genres could also exist.

Take myself as an example, when I first joined the film industry, opportunities abounded for newcomers. But in the past several years, strong competitors have surfaced and eroded Hong Kong's share in the film markets. Today, the future for Hong Kong's film industry lies very much in mainland China where there is a population of 1.3 billion who speak Putonghua or Mandarin. Following the opening up of mainland China's film industry to Hong Kong under CEPA (Mainland and Hong Kong Closer Economic Partnership Arrangement), coupled with the gradual easing of restrictions in the market, the mainland China is a good way out for Hong Kong's film industry. We definitely have competitive advantages over Thai and Korean films, but have to think hard to identify our niche and strengths in the mainland market. We should revitalise the Hong Kong film industry with the backing of the mainland market on the one hand and have our eyes set on the world market on the other.

So how do you think Hong Kong films should be positioned in the mainland China market?
In the past two decades, Hong Kong has made significant contributions towards the development of mainland China's film industry. Apart from investment in capital, Hong Kong film workers have also influenced their mainland counterparts in areas such as film techniques, creative thinking and marketing concepts. We should seize the opportunities made available by the current expansion of the China film market. Our greatest difficulty now is how to modify our films to meet with the needs of this enormous market, as moviegoers' tastes in Hong Kong and the mainland differ a lot. We may easily find ourselves ending up in a situation where we pay too much attention to one and lose sight of the other. If we cater only to the needs of the mainland Chinese audience, we may lose our Hong Kong audience and perhaps also the essence of Hong Kong films.

To address this "indigestion" problem, we have to be familiar with our own strengths and maximise our creative freedom to produce more film genres so that we can tap into more markets.

What are Hong Kong's competitive advantages in the mainland China market?
In the mainland China market, Hong Kong has at least three competitive advantages. Firstly, in terms of culture, for historical reasons, Hong Kong is the point where east meets the west. In dealing with cross-culture themes in films or in partnering with western filmmakers, we definitely have a competitive edge. Secondly, in terms of themes, we have more freedom to create. All along, we have had a rather lenient censorship regime, giving us great flexibility in the choice of themes. Thirdly, in terms of financing, Hong Kong has a healthy and stable economic and finance systems, providing a favourable environment for film financing. This is also one of the strengths of our film industry.

The Korean film industry has been flourishing in recent years. What are its lessons for Hong Kong?
Some people think that the boom in the Korean film industry in recent years is related to the Korean government's protectionist measures, whereas in fact such measures have been in place for a long time. The prime reason for the boom in Korean films is that the Korean government has lifted restrictions on themes allowed in films in response to the major changes taking place in Korean society. As a result, themes banned in the past are now all of a sudden put on cinema screens. These films have made people sit up and attracted more moviegoers. The success of Korean films therefore lies in filmmakers' ability to grasp the changes in Korean society and launch a facelift for their films.

On the other hand, the Hong Kong film industry is very conservative. Perhaps because of the shrinking market, filmmakers are unwilling to take risks and tend to stick to old thinking and work patterns. Hong Kong film workers should widen their horizons and keep a close watch on our fast-changing world. They should not just reminisce on the glory of the past.

For instance, when Hong Kong film workers complain about the lack of talents, have they ever considered where our talents have gone? If we can export our first-rate action choreographers to other countries, why can't we borrow talents from other places? I believe that with the solid foundation of Hong Kong films and an open attitude, the prospects of Hong Kong's film industry are still very promising.

What are the areas for improvement in Hong Kong's film industry?
There are at least three areas where improvements can be made. Firstly, we need to strengthen our communication with banks. Although Hong Kong has a relatively stable finance system, banks are rather passive when it comes to talking about film financing. Secondly, the Hong Kong film industry lacks new blood. Although the government and community bodies have been organising filmmaking training programmes, the problem is that trainees do not have many career prospects when they have completed the training. This has put people off.

Let's take a look at the Directors Guild of America. They also organise training programmes in which trainees are put on every process in film production so that they can try out what they have learned. Hong Kong's operating conditions are less favourable, and we do not have in place a mechanism to find jobs for trainees before the programmes are organised. This is a predicament of Hong Kong's film industry. Thirdly, Hong Kong lacks professional film producers.

The creative head and the producer are often the same person. Therefore, it may be difficult for them take a more macro perspective on the mainland China market or the international market.

What do you think should be the division of work between a film's creative head and its producer?
A good analogy will be to liken the creative head to a seed and the producer to a gardener. A good seed needs the gardener to put it in good soil and water it. A good gardener with good soil but without a good seed cannot do much. Hence, the two should complement each other in their roles. For example, the theme of Ang Lee's Brokeback Mountain was originally catered for a small audience. The director's role is to film it to the best of his ability, while the producer should provide an environment, under limited costs, where the director can deliver his best, and bring the film to the right market. When a film has the ability to touch people, it can produce a good harvest given the right soil. If we say that a director is the soul in the creative process, the producer is then the guide of the film.

Being part of the Hong Kong film industry, how do you wish the government can help and support the industry?
The more urgent and short-term assistance needed is to clamp down on the piracy of films and BT, and the government is working hard on it now. In the long term, the film industry should sit together and discuss the issues that should be brought to the government's attention. In fact, officials in the related government departments do not come from the film industry and will have difficulty in understanding our needs. It is best that we think about and express our needs to them.