Attending last month's Hong Kong Book Fair after winning the best director prize for at the Cannes Film Festival, he was given a hero's welcome.

The film had been decades in the making. First mooted in the late 1980s, it is loosely based on a Tang dynasty short story Hou had read in its original classical Chinese text in his university days. The film follows the titular character (played by a nearly silent Shu Qi) as she struggles with her choices after being ordered to kill a provincial governor (Chang Chen), who turns out to be a former childhood love.

Despite its occasional use of impenetrable classical dialogue and an abstruse storyline, the period drama is such an enchanting sensory experience - thanks in large part to the mesmerising imagery from Hou's long-time cinematographer, Mark Lee Ping-bin - bemused viewers might feel obliged to surrender to the allure of its sights and sounds.

According to Hou, computer-generated effects were kept to a minimum in Even a much-discussed mountain scene in which clouds magically roll out to obscure the landscape below, as if they are curtains being drawn, was achieved naturally: the billowing clouds were shot in Hubei's Shennongjia nature reserve at more than 2,800 metres above sea level.

When premiered at Cannes in May many critics tipped it to lift the festival's top honour, the Palme d'Or. Although Hou eventually had to settle for a best director prize, the production marked a significant return to form after an eight-year gap, the longest in his directing career.

The public first learned of his idea for from screenwriter Chu Tien-wen - another frequent collaborator - at the time Hou's masterpiece was released in late 1989.

The historical drama, which won the Golden Lion at the Venice Film Festival that year, is regarded as a major work of Taiwan's so-called New Wave Cinema movement of the 1980s, and the crown jewel in Hou's oeuvre. A 2011 survey conducted by Taipei's Golden Horse Film Festival rated it the greatest Chinese-language film of all time.

However, the adaptation stayed in pre-production limbo until a test shoot was carried out in 2010.

Principal filming didn't begin until late 2012 and continued for more than a year, with a variety of issues causing delays. It proved such a tortuous process that by the time Hou looked to trademark the Chinese title of for his film, someone else had beaten him to the punch. The present Chinese title, , was adopted for this reason.

Why was Hou so determined to bring this story to the screen? The auteur finds it hard to articulate what he wanted to achieve but concedes: "I did realise that this film might not make money."

Made on a budget of 90 million yuan (HK$112 million), is Hou's most lavish production so far. Although investors may not appreciate his comments about returns on the project, it reflects the considerable effort he has taken to recreate ninth-century China. Half the financing came from investors around the world: Europe, North America, South Korea, Japan, Taiwan and Southeast Asia.

"I was able to find a bit of money because of my past connections. That took some of the pressure off," says Hou.

Sil-Metropole Organisation, which owns the film's distribution rights in China, supplied the rest of the funds.

While the Hong Kong company is primarily known as a producer of mainstream fare, it gave Hou full creative control of the project despite his unwavering art house sensibilities. Given the green light before the release of Sil-Metropole's other martial arts epic, Wong Kar-wai's , Hou believes the leeway afforded him may be attributed to his film being produced as part of Sil-Metropole's 60th anniversary celebrations.

With that sizeable budget, Hou has made excellent use of the natural scenery in Hubei and Inner Mongolia and seamlessly blended in the ancient architecture in Nara, Japan. The indoor scenes were filmed on meticulously built sets inside the studios of Central Motion Pictures in Taiwan.

As his first venture into a martial arts genre that has been rejuvenated in the past 15 years by mega-budget productions from other prominent directors (Ang Lee's , Zhang Yimou's ), Hou has described his latest effort as one of his most "commercial" productions.

But the filmmaker says his approach has not shifted.

"All I did here was add an action element. The filmmaking method, the content - it's all my usual approach. I think this film may be described as a commercial one because it's about an assassin; that's generally easier to arouse the audience's curiosity," he says.

"I don't know how ordinary people feel about my work these days - to be honest, I really have no idea - but I guess they wouldn't be able to get into my films as quickly as they would with other [people's] films. They may still feel a distance from my work … As long as I'm not giving them something too extreme, I think it's all right."

But for certain fans of martial arts movies, Hou may have taken too many liberties with the genre. To start with, there is no gore in a film that is very much about killing.

"I don't like blood, so no matter how the characters exchange blows, there isn't any bloodshed," Hou says.

"What's the point of including blood? That's making it too easy. If the movement looks good enough, why must we have it?

"Blood is very easy to do. That's why many people do it. And to what extremes? I don't need that."

Hou concedes his film is "completely different" from other wuxia movies. Whereas many filmmakers rely on wire work to depict - a fabled martial arts technique described in literature as enabling practitioners to "fly up eaves and run along walls" in defiance of gravity - Hou makes no concessions at all.

"Qinggong is a lie," he says. "How is it possible [for anybody to fly]? … If a character needs to go up a tree, why don't we adopt parkour?"

Wearing a mischievous grin, Hou demonstrates the movement with jumping fingers and imitates the impact of blows with his voice. "It may look even better this way, no?"

His admirers hope that this apparently fresh delight in his craft will mean more frequent features (Hou's last full-length film was 2007's ); their relief was almost palpable when Hou completed his stints as chairman of the Taipei Film Festival and the executive committee of the Golden Horse Film Festival - duties that forced a hiatus in his directing in the past few years.

"Have I wasted my time? No, because I've completely reinvented the Golden Horse Awards," says Hou, anticipating questions about his detour from filmmaking.

"The Golden Horse used to be dominated by its chairman and his own people, but I've restructured it in such a way that it is run by an executive committee with a CEO. Future CEOs may come and go, but the team is well set to continue. It took me some time to build that up."

Comparing the organisation to running a film centre, he says: "I just clearly explained my points. It was nothing extraordinary."

For many viewers, it would be helpful if Hou offered the same clarity in his film narratives. He declared earlier in our interview that the seemingly opaque relationships among characters in could be understood through the minutiae of their interactions, but at the risk of annoying the respected filmmaker, I ask if he finds it a problem that some viewers fail to understand his minimalist story.

"You should try to relax and watch it," Hou replies, gently but firmly. "Why is it necessary to have clear ideas about everything? That's not necessary. As long as you enjoy watching it, that's enough. The film is very interesting - and by that I mean the colours, the lights and the shadows are all great fun for me to watch."

Three other visual feasts from Hou Hsiao-hsien

The Assassin has been lauded for its visual poetry, but here are three other arresting works Hou Hsiao-hsien created with cinematographer Mark Lee Ping-bin over the years.

The Puppetmaster (1993)

Shifting deftly between documentary and fiction, this masterful biopic of the Taiwanese puppeteer Li Tien-lu (1909-98) is a vivid expression of its Chinese title: Drama, Dream, Life. It took the Jury Prize at Cannes in 1993, Hou's only win at the film festival before The Assassin's recent triumph.

Dust in the Wind (1987)

This follow-up to Hou and Lee's acclaimed A Time to Live, A Time to Die(1986) shows compositional perfection. A heartbreaking coming-of-age story, it follows a pair of sweethearts from the countryside who gradually lose their youthful innocence in the city of Taipei.

Millennium Mambo (2001)

This contemporary drama about urban ennui is balanced between insufferably indulgent and hypnotically beautiful. Actress Shu Qi, whom Hou had spotted in a TV commercial, made a goddess-like impression in a neon-lit world permeated with drugs and alcohol and where connections between its inhabitants were tenuous.