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By the height of the boom in the early '90s, roughly half of the theatrical features produced were Category III-rated softcore erotica descended from the fengyue movies of the '70s. The rating also covered a fad for grisly, taboo-tweaking exploitation and horror films, often supposedly based on true crime stories, such as Dr. Lamb (1992), The Untold Story (1993) and Ebola Syndrome (1996).
In this landscape of pulp, there remained some ground for an alternative cinema or art cinema, due at least in part to the influence of the New Wave. Some New Wave filmmakers such as Ann Hui and Yim Ho continued to earn acclaim with personal and political films made at the edges of the mainstream.
The second half of the '80s also saw the emergence of what is sometimes called a "Second Wave." These younger directors included names like Stanley Kwan, Clara Law and her partner Eddie Fong, Mabel Cheung, Lawrence Ah Mon and Wong Kar-wai. Like the New Wavers, they tended to be graduates of overseas film schools and local television apprenticeships, and to be interested in going beyond the usual, commercial subject matters and styles. These artists began to earn Hong Kong unprecedented attention and respect in international critical circles and the global film festival circuit. In particular, Wong Kar-wai's works starring Leslie Cheung, Tony Leung Chiu-Wai and Maggie Cheung in the 1990s has made him an internationally acclaimed and award-winning filmmaker.
During the 1990s, the Hong Kong film industry underwent a drastic decline from which it has not recovered. Domestic ticket sales had already started to drop in the late '80s, but the regional audience kept the industry booming into the early years of the next decade. But by the mid-'90s, it went into freefall. Revenues were cut in half. By the decade's end, the number of films produced in a typical year dropped from an early '90s high of well over 200 to somewhere around 100.