China Curbs Theme Park Projects

In a bid to clamp down on local government spending and rein in unauthorised real-estate development, the Chinese Government has called a halt to the building of new theme parks across the country.

Over the last decade, the growing leisure market for China's increasingly affluent 1.3 billion population has seen the development of hundreds of new theme parks while, at the present time, 15 new theme parks are being built concurrently. However, soaring property prices and concerns that local governments have overspent on park development has led to the country's top economic planning agency halting the construction of locally approved parks planned to be larger than 20 hectares or that have a total investment of more than 500 million yuan ($78 million).

A recent directive from the National Development and Reform Commission (NDRC) stated "since 2004, the State Council (China's cabinet) has clearly ruled that it must approve construction of large-scale theme parks. But in recent years local governments have approved large parks on their own."

The suspension took effect on 5th August and covers projects already approved but for which construction hasn't yet begun. According to the directive, it will remain in place until the introduction of new regulations for the sector.

The suspension comes as Beijing is under growing pressure to clean up the huge amount of debt that local governments have accumulated through infrastructure projects since it launched massive fiscal stimulus in 2008 to combat the global financial crisis. In June, the Chinese real-estate company

Zhonghong signed up the US-based entertainment venue developers Thinkwell to design a $1.4 billion theme park based on the Monkey King legend while, in May, the film group Huayi Brothers signed a deal with a property developer to build a $430 million theme park near Shanghai based on its movies.

Meanwhile, China's largest theme park development, the $4 billion Disneyland near Shanghai, began in April. However, this development is unlikely to be affected by the NDRC decision, as permission came directly from the Beijing government.

The ban is expected to thwart the plans of more than 20 Chinese cities looking to develop their own parks and impact a booming industry for many suppliers and consultants based outside of China. With the US market affected by recession, North American experts are likely to be particularly hard hit.

As recently as May, architectural designer Gary Goddard, who has worked on a range of Chinese attractions and theme parks was quoted as stating "America has slowed down and Asia has kicked into higher gear. Especially China and Macau are really busy."

To read The Los Angeles Times feature on US-based companies active in Chinese theme park developments, go to http://articles.latimes.com/2011/jun/19/business/la-fi-asia-theme-parks-20110619

1st April 2011 - VILLAGE ROADSHOW TO DEVELOP CHINA THEME PARKS 

19th November 2010 - FORGET LEISURE: FOCUS ON THE EXPERIENCE INDUSTRY

8th November 2010 - DISNEY SIGNS AGREEMENT FOR SHANGHAI THEME PARK

10th March 2010 - ONLY ONE BEIJING GOLF COURSE IS LEGAL, SAYS LAW COMMITTEE 

17th August 2009 - 70% OF CHINESE THEME PARKS ‘IN THE RED’

2nd June 2008 - SIX FLAGS PLANS MOVE INTO CHINA

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