He recalls shooting Center Stage, a biopic chronicling the life of Chinese silent-film actress Ruan Lingyu in Shanghai in 1991, which gave him new insight into the city and its people.
Center Stage, directed by Kwan, has won lead star Maggie Cheung several best- actress awards, including one at the 42nd Berlin International Film Festival.
Kwan says the making of the film led to him meeting scores of people in Shanghai's luxury hotels, and inspired the new movie's sets.
"And there was a disco called New York New York in Shanghai in the early 1990s," Kwan says, adding the movie's title was inspired by the disco.
Luo Dong, the director-also the still supervisor in Kwan's 2001 hit Lan Yu-says that the movie was inspired by the personal stories of his acquaintances.
"The years between the late 1980s and the early 1990s saw China's rapid development," he says.
"Many people then faced different choices, which resulted in different ends. The stories were touching and I wanted to recreate the struggles and choices from that era," says Luo.
For the Chinese who were young in the 1990s, they can revel in nostalgia with Hong Kong stars Michael Miu and Cecilia Yip, respectively, playing a businessman back from the US and a Shanghai nightclub owner in New York New York.
Miu, who shot to prominence in the 1983 martial arts series The Legend of the Condor Heroes, and Yip, famous for the 1992 hit musical drama The Legend of White Snake, are both cultural icons for a particular generation.