Pic biz awaits China syndrome. (Hong Kong film industry)

HONG KONG After the handover of Hong Kong to the Chinese July 1, the pie biz here is hoping this former Crown colony will again become a thriving film colony.

Despite a dramatic downturn in production and a shrinking box office over the last few years, Hong Kong filmmakers are hopeful the handover will eventually bring new money, new talent and new infrastructure to their worn-out and inward-looking biz.

The official shift from 156 years of British sovereignty to Chinese rule will, by most accounts, have little immediate impact on industry woes.

Chief executive-designate Tung Chee-hwa, who is the newly appointed leader of Hong Kong, has other matters of urgency to attend to before the film industry even appears as a blip on his political screen.

Signs are already pointing to a future, however, in which the Hong Kong government takes an active interest in cinema as a potential revenue-generator and cultural banner to wave worldwide. China may quickly find that it's a boon to provide storylines, locations, talent and audiences to the Hong Kong industry. Key Hollywood companies -- not wanting to be left out of the action in this crucial part of the world -- are setting up production outposts in Hong Kong or joint ventures with local partners there.

Francis Ford Coppola's American Zoetrope and helmer Wayne Wang have already made the connection by setting up a production company in Hong Kong, and Phoenix Pictures is conducting talks about how to contribute its know-how.

Shanghai-born Mike Medavoy, chairman and CEO of Phoenix Pictures, has been establishing relationships in China and Hong Kong for the past three years.

Phoenix is in talks with, among others, Hong …