Monday 16 November 2009

Shanghai Disney park gets go-ahead

After almost 10 years negotiations and weeks of speculation and mounting anticipation, Shanghai has finally been given the green light to build a Disney theme park - but the public is still in the dark over the exact scope of the deal.

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Guanyu said...

Shanghai Disney park gets go-ahead

A decade in the making, deal is done but still short on detail

Will Clem in Shanghai, Dennis Eng and Yvonne Liu
05 November 2009

After almost 10 years negotiations and weeks of speculation and mounting anticipation, Shanghai has finally been given the green light to build a Disney theme park - but the public is still in the dark over the exact scope of the deal.

The announcement yesterday that the central government had given approval for the project follows nearly a decade of wrangling between the multinational entertainment giant and mainland authorities, and comes less than two weeks ahead of US President Barack Obama’s first visit to China.

The Shanghai Disneyland is set to dwarf the Hong Kong park, and will put the two cities in greater competition as tourism destinations.

Approval for the project came from the National Development and Reform Commission, an arm of the State Council, late last month, the Shanghai government said in a brief statement released yesterday.

The release gave no details of the park’s size, cost or construction schedule, but it has been widely reported to have a projected US$3.6 billion budget, making it one of the largest ever foreign investments on the mainland. The Shanghai government is also reported to have set aside about 400 hectares for the first phase of the park.

Disney chief executive Robert Iger said in a separate statement: “This approval marks a very significant milestone for The Walt Disney Company in mainland China.”

The media conglomerate said the approval would allow it and its Shanghai partners to “move forward toward a final agreement to build and operate the park and begin preliminary development work”.

“Upon completion of the final agreement, the project’s initial phase would include a Magic Kingdom-style theme park with characteristics tailored to the Shanghai region and other amenities consistent with Disney’s destination resorts worldwide,” the statement said.

Shanghai has been awash with rumours of the impending approval of the project for the past couple of months. Speculation intensified when clearing work began at the proposed site for the park. And the news was all but confirmed by mayor Han Zheng on Sunday.

But the official announcement still boosted the Shanghai stock market and sparked aggressive bidding by 17 developers on a residential plot adjacent to the Disney site that was auctioned after the news broke.

The park’s first phase is expected to be nearly four times the size of Hong Kong’s Disney, which has been criticised for being the smallest of the company’s five parks. The Shanghai park is expected to grow to 1,000 hectares in later phases.

The reaction by Hong Kong government and tourism officials to the announcement was sanguine.

Michael Wu Siu-ieng, chairman of the Hong Kong Association of Travel Agents, said the city was not a single-activity destination and had many attractions in addition to Disneyland to draw visitors from the mainland and overseas.

Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan said the mainland’s 1.3 billion population was more than enough to support two Disney parks.

But Democratic lawmaker Emily Lau Wai-hing said competition from the Shanghai project was bad news for the Hong Kong park, and Liberal Party chairman Miriam Lau Kin-yee urged the government to enhance the city’s other tourist attractions.