Beijing banned its entertainers from joining Golden Horse -- dubbed the Chinese-language "Oscars" -- in 2019 after a Taiwanese director voiced support for the island's independence in an acceptance speech in 2018.

China claims Taiwan as part of its territory, which the Taipei government rejects, and Chinese A-listers and big commercial productions have largely avoided the event ever since.

Despite the sensitivity of the awards, more than 200 Chinese films entered this year's competition, which Taiwan's Mainland Affairs Council (MAC) said was the highest number in "recent years".

These films "may not be able to be screened in mainland China, but they still hope to have a free platform to participate and express themselves," MAC spokesman Liang Wen-chieh told reporters ahead of the awards.

"We welcome (them) very much," he said.

The two Chinese films seen as favourites for best director and best picture awards -- "Bel Ami" and "An Unfinished Film" -- tackle sensitive subjects and have not been released in China.

Same-sex drama "Bel Ami" has eight nominations while docu-drama "An Unfinished Film", which is set during China's lockdown of Wuhan in the earliest stages of the Covid-19 pandemic, has three.

Despite political tensions, Golden Horse remained a stage for independent Chinese films that have no distribution space on the mainland, Taiwanese film critic Wonder Weng told AFP.

"This spirit remains unchanged. I think the Golden Horse Awards have always insisted on being the benchmark" that is open to all subjects, said Weng, who is a board member of Taiwan Film Critics Society.

Weng said "An Unfinished Film" by Lou, who has previously taken on forbidden subjects such as gay sex and the 1989 Tiananmen protests, was "a work of conscience" and tipped it to win both the best picture and best director awards.

Lou's latest offering is about a film crew trying to resume shooting a movie during the Covid-19 pandemic in Wuhan, as the city was placed in an unprecedented lockdown.

"Lou put images that are banned or blocked into his work and reminds us that there is a director who is willing to preserve historical images for us to see... and let us know there is a different voice," Weng said.

Taiwanese horror comedy "Dead Talents Society" directed by John Hsu led the nominations with 11 nods, including best picture and best director.