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China or Europe – Where Next for UK Co-Productions?

As the first UK/China film co-production is announced, Huw D Jones argues Britain shouldn’t neglect its established ties with Europe.

To coincide with Chinese President Xi Jinping’s official state visit to the UK this week, Britain’s first film co-production with China was announced at a ‘creative showcase’ event in London.

Earth: One Amazing Day (working title) is the sequel to Earth (2007), the second highest grossing nature documentary ever released. The new film, co-produced by BBC Worldwide and the Shanghai Media Group with director Paul Webber (Girl With a Pearl Earring; Hannibal Rising) in the helm, will focus on the hundreds of dramatic stories which take place in the natural world during a single day on the planet. A special 90 minute Sherlock made for Chinese cinemas was also announced at the London event.

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The sequel to BBC documentary Earth (2007) will be the first UK/China co-production.

The UK has been actively courting the Chinese film industry over the last two years. At the 2013 London Film Festival, the British Film Institute (BFI) launched its International Strategy, which identified China – alongside Brazil and the US – as a ‘priority territory’ for export, co-production and cultural exchange. This followed the findings of a 2012 report by Olsberg SPI, which noted that “China’s market is rapidly growing, with a 29% increase in Gross Box Office for 2011 to approximately US$2 billion, a 28% rise in admissions to 370 million, and a 50% rise in the number of screens”, making it the second largest cinema market in the world after the US.

In April last year, the BFI led the UK’s first ever film trade mission to Beijing, where the two countries signed a landmark treaty, enabling qualifying UK/Chinese co-production to bypass China’s strict cinema quotas, which only allow 34 foreign titles to be shown in the People’s Republic each year. Meanwhile, the BFI Southbank in London staged a four-month retrospective of Chinese Cinema.

Co-productions in decline

But while the UK clearly has high hopes for its new co-production deal with China, UK co-productions have been in dramatic decline over the past decade. While British film output as a whole increased by 14% during the period 2004-14, UK co-productions fell by 70%, from 105 in 2004 to 32 in 2014.

According to the BFI’s Statistical Yearbook (2015), minority UK co-productions experienced the sharpest reduction, dropping 81% over the last decade. However, majority UK co-productions have also slipped by 24%, from 21 in 2004 to only 16 in 2014; majority UK co-productions now account for only 7% of total British film output.

In France, by contrast, majority co-productions account for 20% of film output, while in Germany and Spain the proportion is 16% and 25% respectively, according to the European Audiovisual Observatory’s World Film Market Trends (2014).

The decline in UK co-productions can be attributed to recent changes in British film policy. Between 2002 and 2004, the UK government tightened the co-production certification requirements to close several loopholes which were being exploited to provide tax avoidance of various kinds. In 2007, it introduced a new system of film tax relief which compelled co-productions to spend at least 25% of their budget in UK to qualify, while also specifying that tax relief could only apply to goods and services ‘used and consumed’ in the UK.

Some industry professionals argue these rules make the UK a less desirable co-production partner. Mike Downey of Film & Music Entertainment, for example, told a parliamentary select committee in 2010 that the new tax system had cut his company’s revenue in half, because “we can’t make the tax credit work for our partners”.

Equally inhibiting has been the loss of public grants for co-production. During the early-1990s, schemes like Eurimages, the Council of Europe’s co-production fund, and British Screen’s European Co-production Fund (ECF) encouraged UK filmmakers to work with European partners. However, the UK left Eurimages in 1994 due to government spending cuts, while the ECF lapsed after British Screen was taken over by the UK Film Council in 2000. According to British Screen’s former chief Simon Perry, “Non-membership of the pan-European fund Eurimages probably does most to make Britain the co-production partner-of-last-choice within Europe”.

Risks and benefits of co-production

There are good reasons why UK filmmakers should work with international partners. My own research on the performance of UK films in Europe during the period 2005-12 shows that UK/European co-productions generally perform better than purely domestic UK features:

One reason why UK/European co-productions perform better in Europe is because they generally have bigger budgets than most independent films. Co-production allows partners to pool financial resources and access tax relief and subsidies in their partner’s territory, where they are officially classed as ‘national’ films. This gives them more to spend on stars, special effects, locations, marketing and other elements which attract audiences.

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British auteur Ken Loach has worked with European partners on several culturally British films including The Angel’s Share (2012).

Co-production also enjoy stronger links with foreign distributors and exhibitors. They find it easier to access distribution subsidies as well: 47% of UK/European co-productions received funding from the EU’s MEDIA programme, which supports the circulation of non-national European film, compared with only 29% for domestic UK features.

Some suggest the price which filmmakers pay for these benefits is the loss of creative control, as co-production treaties often require partners to each have a creative input that is proportional to their financial investment, even if this is not always appropriate to the film’s narrative.

This can potentially lead to the creation of so-called ‘Europuddings’ – films which, as Paul Cooke (2013) neatly puts it, “seem to trade national specificity for an insipidly artificial form of ‘Europeanness’”.

It is true that most UK/European co-productions are  motivated more by financial opportunism than a genuine desire for cultural collaboration or exchange. Only a fifth of the UK/European co-productions I analysed came together for obvious creative reasons, such as a cross-border story.

Yet this doesn’t mean that financially-driven co-productions necessarily result in Europuddings. British auteur Ken Loach, for example, has worked with European partners on a number of ‘culturally British’ films – including Sweet Sixteen (2002), Looking for Eric (2009) and The Angel’s Share (2012) – without ever being forced to make any cultural or artistic compromises.

It helps that funding for Loach’s films comes from multiple sources, so that no single financier, as the director puts it, “has you by the throat”. But equally important is the fact that the European Convention on Cinematographic Co-production, which provides the main legal framework for UK/European co-productions, is not too restrictive in terms of specifying levels of creative input or what a film’s cultural characteristics should be. For example, European partners are allowed to contribute as “finance-only co-producers” for between 10% and 25% of production costs.

Not neglecting Europe

Whether UK/China co-productions will offer the same degree of flexibility and freedom remains to be seen. Certainly there are potential risks involved.

According to lawyers Jonathan Berger, Alastair Lorimer and Kevin Guo, the UK/China co-production treaty gives the Chinese authorities discretion to insist that qualifying films incorporate ‘Chinese characteristics’. This requires filmmakers to cast Chinese citizens in at least a third of the main roles and also ensure the final product is ‘conducive to the promotion of Chinese culture’ – a vague clause which could, according to Berger, Lorimer and Guo, be used by the Chinese authors to “stifle creativity”.

Filmmakers in China also face strict controls and restrictions, particularly in relation to political subject matter. Last year Chinese filmmaker Shen Yongping received a one-year prison sentence for ‘illegal activities’ after making and distributing online a documentary about China’s constitutional history. Meanwhile, the Beijing Independent Film Festival was cancelled after police detained organisers and blocked access to the venue.

Which is why in the rush to access the burgeoning Chinese cinema market, Britain shouldn’t ignore its long-established ties with Europe. The UK government’s recent decision to lower the minimum UK spend for qualifying co-productions from 25% to 10% – coupled with the introduction of a new £1 million fund for minority UK co-productions – should make it easier for British filmmakers to work with European partners once again.

UK/China co-productions may offer the lucrative chance to access the second biggest cinema market in the world. But UK/European co-productions still enjoy high box office returns, with less risk of compromising creative freedom.

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