A scene from the recently released horror movie Lost in Panic Room. ?Photos provided to China Daily  

The rest of the world sells ghoulishness around Halloween and reaps a tidy profit. Here, it's much harder to sell real horror, especially if you are a filmmaker struggling to read the red tape on what can, and cannot, be shown in horror movies. Liu Wei examines the dilemma.

When is a horror movie most horrifying? When it does not live up to the publicity and raises sniggers instead of screams. In China, there has been a revival of horror movies and of the 26 films released in mainland cinemas this October, six were classified under the horror genre. Compare that to the paucity of production in the last three years, when only 10 horror films were made and seen. The problem is that mainland-produced horror movies often fizzle because the advertisements pump up expectations which cannot be met.

Director Zhang Jiangnan is optimistic about the development of horror films.

Zhang Jiangnan, the director of Midnight Taxi, says horror filmmakers cannot deliver because this genre is a hard nut to crack. But on rare occasions, it can reap rewards for those who dare. Zhang's film was made with a budget of 3 million yuan ($440,000) but it has already raked in 19 million yuan, in 2009.

He sees this current season's "revival" as responding to market forces. "People see horror films making money, so they jump on the band wagon," he says.

These films usually border on being B movies, usually produced on a low or medium budget, depending on lighting effects and an intriguing storyline rather than big star power to draw the crowds.

Midnight Taxi made the most of this tradition. Just a year before, another horror flick, The Deserted Inn, grossed 15 million yuan, five times more than it cost. Again, in 2004, director Agan's The Killing Game raked in nearly 20 million yuan on an 8 million yuan production budget.

So if the stakes are so attractive, why not more horror movie producers? The answer lies in the absence of a proper film rating system and the existence of strict censorship.

According to the Film Management Regulations issued by the State Film Bureau, the industry's top regulator, films should not promote cults and superstitions. Certain content, such as the over-glorification of killing, bloodshed, ghost and spirits, are discouraged and may be edited or deleted.

The controls start at source. While most filmmakers need submit only a summary of the script for approval, makers of horror movies must hand in a complete script to the bureau for approval before filming even begins.

In 2008, the bureau reiterated the regulations. Many filmmakers were discouraged, but Zhang saw the opportunities instead.

"Horror films are enjoyed by a global audience, and the mainland audience is always eager for more, precisely because there are so few in the theaters," he says.

Having written several horror film scripts, Zhang believes he has mastered the game. And perhaps know the rules well enough to bend them.

For example, while the regulation dictates there should be no details of violence, you can still have an execution scene, just as long as you do not show the knife actually touching flesh.

Zhang's other tips: The main protagonist must be human, not a ghost. Works adapted from classics such as Liaozhai Zhiyi (Strange Stories from a Chinese Studio) go down better with the regulators.

"When many are complaining about the regulations, I actually appreciate them," Zhang says. "With these in place, you have clear-cut ideas of what you cannot do, so you know exactly what you can do."

Poster for horror movie The Island.

Zhang's push-me-pull-me theory aside, he still had to make revisions to his final work. A scene of a female ghost was removed from the footage, although the plot says she was only pretending to be a ghost. The bloodied face of a man was also deleted.

But he still counts himself lucky. Most horror filmmakers sacrificed a lot more footage.

Many have fallen back on tried and tested storylines - which often have the main character waking up in a cold sweat, glad to discover it's all been a nightmare. Or, it's just pure fantasy, or more often than not, the ghost is actually a real person with a dastardly plot.

Painted Skin, the 2008 blockbuster was adapted from the Liaozhai compendium of supernatural tales, and it was more romance than ghost story. Even so, the regulators made the director delete a gory scene in which the spirit was eating a human heart.

"Strictly speaking, most horror films we are making are unworthy of the genre. I don't even know how to categorize them," says senior film critic and writer Tan Fei. He appreciates the emergence of the horror films this autumn as an attempt to create more variety in Chinese cinema, but he sees no cause for celebration.

"Censorship and unimaginative filmmakers are two major hurdles to overcome," he says bluntly and predicts that the pseudo-horror films will disappoint viewers and ultimately lose them.

Filmmaker Zhang is more optimistic.

"Making a horror film in China is challenging, but that's why you have less competition. You just have to work harder and do more research to deal with a system you cannot change."

Zhang's next project will be another horror movie - and it will up the stakes because of its modern setting. But the director is unfazed.

"We need more people to explore the possibilities," he says and he is obviously leading the way.