Completion guarantee gets big ticks of approval from producers during festival forum

 Completion Bond - Film Financial Products Local Application.

They believed the guarantee would improve industry transparency and standards, control risk and budgets and give more opportunities to young directors.

Two test cases of the method in China were activated during the festival yesterday when film producers signed agreements with investors to produce two films, Beijing Holiday and Trace Memory, using the completion guarantee.

The guarantee, a relatively new and innovative film production finance method in China, is expected to thrive in Shanghai. It will benefit from the city’s strong and regulated financial system and its plan to become a world finance center, said forum speakers, including Stanley Tong, China Film International president.

“We urgently need an industry standard (of film production) in China and the completion guarantee is a necessary step to achieve it,” Tong said during the forum Completion Guarantee - Film Financial Products Local Application.

The guarantee is a tool to produce a film “on time and on budget” and protect investor’s money, said Film Finance Inc, which also demonstrated the latest software interface to control budgets and the film production process.

He Xiaoqiao, founding partner and vice president of SOVA Capital, explained her understanding of the application of the guarantee in the Chinese film industry and how it is different from Hollywood’s method.

The Chinese industry still lacks transparency, production supervision and reliable third-party data, making it unique compared with western markets, she said. Therefore, special agreements were needed to test its use in China, such as encouragement for directors, He added.
 
EZ Capital\'s project investment manager Yue Xiaomei said in the long term the guarantee will ease investors’ concerns about budget overruns and help the film industry develop in a healthy way.

It will bring more opportunities to young and relatively unknown directors, Yue added.

The forum host and chairman of Hehe Capital Ltd, Wei Jianhua, emphasized the guarantee method needed support from investors, governments and film producers in China.