China's decision to block the shoot of the Weinstein Co.'s "Shanghai" has left some talking of a backlash within the country against foreign influence and wondering about damage to the Chinese industry's progress. Helmer Mikael Hafstrom, who has been in China since September working on pre-production of the Gong Li-John Cusack starrer, said he doesn't know why a shooting permit has been refused.

"We wouldn't have spent millions of kronor (hundreds of thousands of dollars) in this country over the past six months if we hadn't been completely sure we would receive a permit," Hafstrom said. "This obviously comes as a shock to all of us. We don't know exactly why we have been turned down."

Sources close to "Shanghai" say that seven other co-productions may have been blocked, but that has not been confirmed. News was apparently communicated to TWC by China's Film Bureau, which regulates the industry. Sources close to the production say that following the controversy that surrounded "Lust, Caution," which raised the call for a ratings system once again, Chinese authorities are now increasingly concerned that other films may tarnish the image of the country, portray aggressive foreign powers or depict drug use. Set during 1941 upheavals, the "Shanghai" plotline includes drugs, sex and war with the Japanese.

Other Chinese industry sources said they believe the problems with "Shanghai" could relate specifically to TWC. Chinese authorities were furious two years ago when the company pulled out of Chen Kaige's national prestige project "The Promise" only days before its skedded release. "Shanghai" is the first blockbuster pic to emerge from TWC's Asia fund, which raised $285 million last year.

In recent years, Chinese officials have been promoting growth of co-productions as a means of countering import quota restrictions that hamper the country's film trade relations.

Timing of the decision also leaves plenty of room for uncertainty. China is currently midway through the weeklong Chinese New Year holiday, and the country has been gripped by the worst winter weather in 50 years. One distribution chief said, "Most people in the biz have been totally preoccupied getting product out there through the snowstorms."

While TWC execs say they are still hoping for a reversal of the decision, Hafstrom said the shoot is now headed for Hong Kong. Pic is likely to use the new Shaw Studios for studio work and locations in Hong Kong and Macau for other exteriors.

Relocation will not delay production for more than a month, according to the Weinstein Co., and it should not affect casting. In addition to Cusack and Gong, producers have signed Japanese star Ken Watanabe and are in advanced negotiations with Chow Yun-fat.

TWC prexy of international Glen Basner said the company had not had many conversations in Berlin about the "Shanghai" hassle.

"We haven't really engaged the market on it. We're not pre-selling it yet, although we've had interest from Japan because of Ken Watanabe," he said.

© Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

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