This paper traces the transformation of Hou Hsiao‐Hsien’s creative approach through an investigation of the intimate relationship between Hou’s films and the development of Taiwanese film history by placing Hou’s films into the interlacing framework of the politics, economy, society and aesthetics of Taiwan. The paper approaches the films with regard to genre and author theory, the studio system, influence from predecessors, Taiwanese laws and regulations, censorship system, film festival and film awards, box office and critical reviews. The paper is structured chronologically, starting with an examination of Hou’s earlier films and experiences to provide a glimpse into Hou’s early approach which has often been overlooked. Later, the paper clarifies Hou’s role in and overall relation to Taiwan’s New Cinema. The paper describes how Hou successfully drew together two different forces in New Cinema, creating a pattern where directors actively participated in each other’s projects. These new culturally and socially conscious films, including Hou’s Sandwich Man, were rich in artistry, and quickly gained support from the newly risen middle class during the later period of martial law. Through a discussion of Hou’s The Boys from Fengkuei, A Summer at Grandpa’s, A Time to Live, A Time to Die and Dust in the Wind, this paper depicts New Cinema undergoing setbacks at the box‐office and confrontations with local media, which resulted in the issuance of a manifesto in 1987. While considering the significance of the renowned Taiwan Trilogy (A City of Sadness, The Puppetmaster and Good Men, Good Women) the importance of A City of Sadness, which had an enormous impact on Taiwanese politics, society, culture and economy, is emphasized. Finally the discussion focuses on Hou’s later films Goodbye South, Goodbye, Flowers of Shanghai and Millennium Mambo where Hou displayed an entirely different interest in shaping space and time in his narrative. In the process of this discussion, Hou’s interaction with the Taiwan social environment is repositioned in a review of his path as a commercial film director to auteur, from a concern with society to his involvement in politics. Hou’s work is seen as a historical milestone in the development of Taiwanese film.
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