The official reason from the government was that he showed his latest film, Summer Palace at Cannes without official government approval. So now he is banned from making films in China for 5 years. I think the movie's producer also got the ban. And it's not the first time for Lou Ye either.

Here is a blog that has the news piece about the ban: Lou Ye banned for 5 years

And here is a brief interview with him following the ban: UK interview

What do you all think about this? I will say it makes me more appreciative of some of the freedoms that we enjoy in the U.S.