China finally approves Disney Shanghai park

5 November 2009 12 h 14 min 14 comments

“China’s central government finally gave The Walt Disney Co. the green light to build a new theme park in Shanghai’s Pudong district, after the project spent years in limbo”, the company said late Tuesday.

“China is one of the most dynamic, exciting and important countries in the world, and this approval marks a very significant milestone for The Walt Disney Company in mainland China,” Robert Iger, president and CEO, said in a statement.

The new Shanghai park, which would be Disney’s sixth, is close to a number of other major cities linked by affordable trains or within easy driving distance, including Nanjing, Suzhou and Hangzhou.

The Shanghai park will join Hong Kong Disneyland to become Disney’s second in China and third in Asia, including Tokyo Disneyland. The announcement is coming some days before U.S. President Barack Obama’s first visit to China in mid-November, with a large U.S. trade delegation.

Lack of Beijing’s central government approval had been a major stumbling block for much of the last decade as Disney were willing to build a park in Shanghai — China’s largest and richest city, where nearly 17 million residents have the country’s highest per capita nominal GDP, $3,264 in 2008, as compared with $46,714 in the U.S.

The Shanghai Disney park was first dreamt up in 1990 by former Chinese Premier Zhu Rongji, then the city’s mayor, after he visited Disneyland in California.

“Following Beijing’s approval of Disney’s Project Application Report, the city of Shanghai and Disney’s Parks and Resorts division, led by Jay Rasulo, must still work out more details on the park”, said a Disney spokeswoman in Hong Kong. According to sources familiar with the negotiations who spoke on condition of anonymity, “the park could take up to six years to complete, occupy as much as 1,700 acres of Pudong and be about 40% owned by Disney”, The New York Times reported. The remainder of the shares of the Shanghai park — which could eventually rival the size of Disney World in Florida — would be owned by a group of Chinese companies hand-picked by the government, The Times said.

Increasing Disney’s China presence

Despite strong efforts by Disney, the park and its massive investment, reported to be about $3.6 billion, did not come with any concession on the television front, where Disney is limited in China to roughly 12 hours each week of “Mickey Mouse Clubhouse” programming on local stations. The Walt Disney Company  didn’t get the approval to launch its Chinese version of full Disney Channel.

But the park will develop the visibility and attractivity of it brand and increase its ancillary activities in China.

Disney, which already does more business in China than most foreign media companies, has more than 600 employees in Beijing, Shanghai and Guangzhou. Merchandise products are sold at about 6,000 branded locations. The company also delivers about a dozen hours of television programming (“Mickey Mouse Clubhouse”) to local stations each week, and its Broadway unit has toured “The Lion King,” among other shows.

Competition with HK park ?

A spokesman for Hong Kong Disneyland said that attendance at that park, the smallest of the company’s theme parks, had been more than 17 million people from the time it opened in Sept. 2005 through the end of May this year.  That’s an average of about 415,000 visitors per month over 41 months. “From our point of view the Hong Kong and Shanghai parks are not competitors, they’re complementary,” a Disney spokeswoman said. “We really believe that the greater China market is big enough to support multiple parks.”
 

SOURCES: New York Times, Xinhua, Reuters (3/11/2009)

IN THE PRESS:

. China Approves Disney Theme Park in Shanghai (New York Times, 4/11/2009)

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