Entertainment dreams ride high

  • Letters
  • Sunday, 05 Jan 2003


Undaunted by the huge sums already squandered by domestic investors on building large amusement parks, most of which are empty, China is cashing in on multinational entertainment giants' dream to conquer the world's largest and still untapped market. 

The most populous nation is flirting with the idea of lodging three world-class theme parks by the end of 2010. All of them are hedging their bets on the country's strong economic performance and the market demands of a nascent middle class. 

“China can support a number of Disneylands due to the potential of its huge market,” read the headline last week in the People's Daily, the mouthpiece of the Communist Party. 

Long regarded as petty bourgeois entertainment for capitalist exploiters, theme parks these days are held in greater esteem as a source of foreign capital and as a most welcome tourist attraction.  

MARKET FOR FUN:The sprawling Dino Beach Water Park in Shanghai,the most popular water park in Shanghai will be in for somecompetition when Universal Studios opens its US$870mil theme park in the city IN 2006.

The party newspaper quoted a representative of the Walt Disney Co who predicted that by 2010, China would have at least two Disneyland parks. 

The media giant is already building the Hong Kong Disneyland fun-park, which breaks ground this month and is slated to open in 2005 or 2006.  

Earlier this month Universal Studios, the theme-park unit of Vivendi Universal SA, unveiled plans for a US$870mil theme park in Shanghai – despite the fact many of the hundred or so amusement parks, which sprang up in mainland China during the investment craze of the 1990s, went bust. 

The Hong Kong government has awarded hefty incentives to attract Disney and is investing US$2.8bil itself. Hong Kong had been assured that when its mega-project opens in 2005, it would be the only major amusement park in China so it would be certain to have a draw that would prop up its ailing tourist industry. 

But instead, Universal Studios will open in Shanghai the following year.  

Even though in Japan, a far richer place than China, Disney initially struggled to make its park attract enough visitors, it is giving way to pressure to open another entertainment park – probably in Beijing in 2010. 

“China – with a population of 1.3 billion, if there were to be several theme parks, of course, we would be very confident about that, as we see China as a huge market,” Irene Chan, regional director of the Walt Disney Co in Asia Pacific told a news conference in Hong Kong. 

“Two parks are definitely not a problem”. 

These projections however, could also turn out to be a gross overestimation. 

If China’s other entertainment industries are some indication, then investors’ dreams could easily become slush. China’s bowling industry went from zero to a million bowling alleys by 2000 but the vast majority has had to close down, wildly overestimating the spending power of China’s middle class. 

Likewise, China now has 500 golf ranges, 30 alone around Beijing, in which investors have poured US$500mil although 10 years ago, this was a sport no one here knew how to play.  

Investors’ optimism is one factor behind this trend, but envy is another. Irrespective of the market, if one of China’s big cities gets the go on a mega-project, then all the others want to get on board, even if there is not room enough for everyone to play.  

“Tianjin and Shenyang (cities) also want to work with foreign partners to set up theme parks,” Tang Long, Beijing municipal government official told the English-language Business Weekly.  

Both Disney and Universal are exploring further expansion in China, particularly in the northern coastal areas where cities like Tianjin and Shenyang are located.  

Still, Beijing – the proud winner of the 2008 Olympic Games, is the one that Chinese tourist officials believe would host China’s second Disney Park and the first one on the Chinese mainland.  

“In terms of both tourism and resources, Beijing has an edge,” says Duan Qiang, official with the Capital Tourism Group.  

Alarmed that mainland theme parks would compete with Hong Kong Disneyland for tourists, the Hong Kong government pleaded with Disney officials to delay opening new projects in China.  

The former British colony has been fighting deflation, rising unemployment and bankruptcies, and hoping that the giant fun-park would prove a financial boost to counter its economic slump. 

During his recent trip to Asia, Disney President Robert Iger reportedly promised Hong Kong Chief Executive Tung Chee Hwa that a second park would not open in China until 2010.  

The Hong Kong government based its investment on a projected economic benefit of US$19bil from the project’s first phase.  

Disney’s Chan says that in the first year of the park’s opening, a third of visitors will be local Hong Kong residents, another third Chinese mainland tourists and the rest from overseas.  

But with the latest news that Universal Studios is going for a mega-park in the boomtown of Shanghai, the economic outlook for Hong Kong Disneyland is getting dimmer and dimmer.  

Days after winning a heated battle to host the 2010 World Expo, Shanghai announced it would unveil a Universal Studios high-technology film-and-television theme park in 2006.  

Shanghai municipal officials have declined to reveal more details about the park, suggesting that the project is still awaiting approval from the central government.  

The Business Weekly quoted an unidentified Shanghai official as saying that the central government did not want to see Hong Kong and Shanghai in competition.  

Yet there is little doubt that having pulled out all the stops to capture the hosting of the World Expo – the first developing country ever to do so, China would spare little effort and money to make its prime financial hub, Shanghai, look ever more lustrous. – Inter Press Service  

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