There is, to my knowledge, only one book on Category III cinema and it's in French and long out-of-print (so is going for quite a bit over the RRP which was €55 to start with, I may try an interlibrary loan at some point):

Sévéon, Julien (2009) Category III: Sexe, sang et politique à Hong Kong. Bazaar & Co (ISBN 9782917339039)

Press release:

Translation:

SEX, BLOOD AND POLITICS IN HONG KONG BY JULIEN SÉVÉON

Category III: Hong Kong classification equivalent to the ban on under-18s.

In 1988, after a mini scandal in the world of cinema, a new film classification system appeared in Hong Kong whose aim was to allow the local distribution of foreign works with subject matter and/or content deemed tendentious (politics, art and essay...). The most "risky" films are then distributed under the Category III label, which effectively allows a number of productions, which would not otherwise have been able to be screened, to see a release.

Category Ill quickly obtained unexpected results with the launch of hundreds of local productions with sex and violence as their motto. While the countdown to 1997 and the return of Hong Kong to China echoes painfully in the heads of all the inhabitants, Category III allows the British colony to torture its minds... with massacres, black magic and all-out sex!

Category III, Sex, Blood and Politics in Hong Kong is the first book in the world to look into this phenomenon, the most important in Hong Kong cinema from the end of the 20th century, but, paradoxically, the most misunderstood.

From key films and recurring themes, the author dives into the darkest streets of Hong Kong (or even China) and paints an unexpected portrait of the city and its cinema. Supported by around ten interviews with directors and actors most intimately linked to this trend, this book also gives pride of place to a rare and unpublished iconography.

The author, Julien Sévéon

Passionate about cinema and particularly its most obscure and strange aspects, Julien Sévéon writes in the French press (Mod Movies, Kumite, Animeland...) and English-speaking (Asian Cult Cinema, Dark Side...) and regularly speaks on DVD supplements. He was editor of Mad Asia, as well as Grindhouse and Cinemas of Asia special issues. He is also the author of the books Le Cinéma enragé au Japon and Blaxploitation, 70's Soul Fever (also available from Bazaar & Co).

However, there are other useful books and I'll drop them into the comments and update the list here.

Academic papers (previously mentioned) include:

• Davis, Darrell W. & Yeh, Yueh Yu (2001) "Warning! Category III: The other Hong Kong cinema." Film Quarterly 54 (4): 12-26
• Woods, Allen (2001) "Category III Films and VCDs: The Failure of Deterrence in the Copyright Ordinance of Hong Kong." Vanderbilt Journal of Transnational Law 36 (3): 1073-1112.