Chang's Film Company & the Shaolin Cycle
Around 1974, Shaw Brothers encouraged Chang to start his own production company, which he called Chang's Film Co. (in Chinese 長弓電影公司, or Longbow Film Co.). Shaw had funds in Taiwan that could not be transferred out of the country due to financial controls and they wanted Chang to use these funds to make Taiwan-based productions. Shaw received all the profit from these movies, but because Chang was in charge of production he had more freedom.
While checking into a hotel in Taipei, Chang ran into popular Hong Kong comedian Michael Hui. During their conversation, Hui told Chang that Taiwanese and Hong Kong films should focus on the folklore and traditions of Southern China, including their martial arts. When Chang returned to Hong Kong he met with Lau Kar-leung and Tong Kai to discuss how to make authentic Southern Chinese style martial arts movies and Lau Kar-leung suggested focusing on the legends of Shaolin Temple.
Their first Shaolin movie, Heroes Two (1974), started with the burning of Shaolin Temple and focused on the Southern Chinese folk hero, Fong Sai-yuk, played here by Alexander Fu Sheng, a charismatic 20 year old graduate of Shaw's Southern Drama School. The movie emphasized the realism of Southern Chinese martial arts styles and in theaters it was preceded by a 9-minute short film called "Three Styles of Hung School's Kung Fu" in which stars Alexander Fu Sheng, Chen Kuan-tai, and fellow Shaw's actor, Chi Kuan-chun demonstrate authentic Southern style kung fu. It was the first movie for Chang's Film Company and became a box office success. Chang had enormous confidence in Alexander Fu Sheng's potential and cast him in the youth drama Friends (1974) that same year for which he won "Best Newcomer" at the 20th Asian-Pacific Film Festival.
Fu Sheng went on to play one of the leads in all of Chang's follow-up Shaolin movies, including Men From the Monastery (1974), Shaolin Martial Arts (1974), and the epic Five Shaolin Masters, which Chang claimed drained the last of Shaw's money captured in Taiwan. It was also the first of these movies to be fully filmed in Taiwan, and because Tong Kai did not want to travel, Lau Kar-leung choreographed it with his brother, Lau Kar-wing. Fu Sheng also starred in Disciples of Shaolin (1975) but during the filming of this movie Chang and Lau Kar-leung fell out over artistic differences and it would be the last movie they completed together. Reportedly, Lau would work for a few days on Chang's historical epic, Marco Polo (1975), before walking off the set, vowing to quit the film industry and movie to America to open his own martial arts schools. Mona Fong, Run Run Shaw's mistress and then head of production at Shaw Brothers, persuaded him to come back to Hong Kong instead and make his directorial debut, Spiritual Boxer (1975).
With his films now attracting Taiwanese investors as well as Shaw's, Chang decided to shoot a World War II film, 7-Man Army (1976), set in 1933, followed by Boxer Rebellion (1976) set in 1900. With a Taiwanese distributor, Lin Chong-feng, paying $1 million Hong Kong dollars for the Taiwanese rights, at a time when the average Shaw Brothers movie was budgeted at $200,000 Hong Kong dollars, Chang rented costumes from Europe, cast Richard Harrison for a role, and convinced actress Li Li-hua to come out of retirement to play the Empress Dowager in the film. For 7-Man Army, the Taiwanese military contributed troops, tanks, artillery, and aircraft for certain scenes. However, Chang's association with Chiang Ching-kuo caught up with him. Chiang's close associate, General Wang Sheng, considered himself the natural successor to the presidency and didn't appreciate the return of Chang Cheh, viewed as a one-time favorite of President Chang's. He pressed for Chang to return to Hong Kong, and claimed that films like Boxer's Rebellion showing Allied forces invading China should be banned. While the film was not banned, it was cut substantially and did not perform well at the box office. When the movie was released in Hong Kong, British censors forced Shaw to change its title to Spiritual Fists, and cut it further. It failed there, too.
Despite the failure of the film, Chang's Taiwanese investor and distributor, Lin Chong-feng, stuck with him and offered him more money. Upon hearing of this, Run Run Shaw flew to Taiwan and offered Chang a $1 million, five-year contract to come back to Hong Kong and Shaw Studios. Worried that the Taiwanese film market was going into decline, Chang accepted.