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New Zealand and Hong Kong: does size matter?

You’re quite small, aren’t you? The question was a touch ironic, coming from a Chinese delegate at the signing of a Statement of Intent (SOI) between Hong Kong and New Zealand. He was, however, referring to the NZ film industry, rather than any other measurement.

Peter Jackson, small? Weta, small? Maybe, by international standards, but effective and very good at what they do, as are many other ‘small’ NZ companies in the screen industries.

Accessing those skills are why the Chinese were here, or the Hong Kong Chinese at least, attending the Park Road Post-hosted bash to sign the SOI to enter into a Audio Visual Arrangement between Hong Kong and New Zealand.

Using their best handwriting to sign the SOI were the Hong Kong Permanent Secretary for Commerce and Economic Development (HKCED), Duncan Pescod, and Lewis Holden, Chief Executive of our Ministry for Culture and Heritage (MCH).

Minister for Arts, Culture and Heritage Hon Christopher Finlayson and Economic Development Minister Hon Gerry Brownlee met with Mr Pescod prior to the signing.

Mr Finlayson welcomed the arrangement, saying, “I’m enthusiastic about the opportunities this arrangement provides for the screen industry and digital entertainment sectors. We know from past experience that similar arrangements have enabled significant economic and cultural gains for both parties.”

The SOI is a step along a road (a rather slow road) towards a co-production treaty between NZ and HK.

It follows a Memorandum of Understanding (MOU) signed earlier in the year between Wellington City Council, NZ Institute of Screen Innovation and Hong Kong’s Cyberport and Internet Professional Association to advance the digital content sector.

Hong Kong is quite keen on action rather than words; possibly, that is one reason progress towards a co-production treaty moves slowly. The HK government wants to see some activity between the parties to back up the words before advancing to a full treaty.

The NBR yesterday carried an article about the MOU. Last night Cyberport released details of some of the actions being taken.

The SOI signed on Wednesday is intended to encourage participation in film festivals, international broadcasting, games, animation and other digital entertainment events; to foster business-to-business contacts and the exchange of information, technology and training including internships; to stimulate investment and cooperation between content makers and promote the exchange of audio-visual archives.

It’s all worthy stuff, but – as the HK side is keen for – it needs action to back it up.

The advantages to NZ of a treaty are quite clear, not least being able to have NZ-HK co-productions access mainland China as domestic content, under the Closer Economic Partnership Arrangement between China and Hong Kong, thereby avoiding the need to gain entry through tight quota systems.

Hong Kong-China film co-productions are seeing a major increase to around 30 per annum compared with 10 per annum in 2004. In 2008, of the top ten box office films shown in China, six were co-productions including Red Cliff, which did its post at Park Road, and took box office receipts of around $60 million in China (and has done $140,000 here so far).

The agreement is consistent with the 2009-10 Policy Address Breaking New Ground Together by Hong Kong’s Chief Executive Donald Tsang. It lists six new priority industries for government support (in addition to finance, tourism, trading/logistics and professional services by which Hong Kong is more traditionally known). The new priorities include cultural and creative industries in which film, digital media and online games are specifically mentioned.

At the signing on Wednesday evening it was apparent that Hong Kong is clearly focused on working with countries with which it can see most benefit. The New Zealand screen industry is fortunate to be amongst those.

So, does size matter? NZ is a small market, although when China is your next door neighbour, any other market is small. But the delegate’s comment was an observation about the industry as well as the general population.

More than one delegate was surprised at the number of NZ ‘companies’ that are actually one person trading under a company name, and that nationally there are very few companies employing more than 50 people.

If that one person company is someone of the stature of Peter Jackson, it doesn’t really matter. Generally, the lack of scale might constrain the opportunities available to NZ companies. And that, in turn, might reduce the amount of ‘action’ the HK government is looking for to convince it proceed to a full treaty agreement.

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