Bring on Shanghai Disneyland - we've got a ticket to ride

By Leo Zhangand Wang Yanlin | 2009-11-5 | NEWSPAPER EDITION

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SHANGHAI has won state approval to build a Disneyland in the Pudong New Area, paving the way for the entry of the United States entertainment giant into China's mainland in a deal that will provide a huge boost to the city's economy.

Shanghai and Walt Disney Co applied to set up the park after signing a framework agreement early this year, the city government said in a statement yesterday.

The nod from the central government was given in late October, it said.

The local government was in discussions with Walt Disney about details and would seek "a long-term alliance to build a top-level Disneyland in Pudong," the statement said.

In a separate statement, Walt Disney said that the government approval of the so-called Project Application Report for Disneyland would allow both sides to "move forward toward a final agreement."

It said the first phase of the project would include a "Magic Kingdom-style" theme park, with characteristics tailored to Shanghai.

Amenities would be consistent with other Disney resorts, the US company said.

Growth catalyst

The announcement of Shanghai Disneyland comes after long talks between the city and Disney, which announced plans to set up a mainland park in 2002.

Disney opened a theme park in Hong Kong in 2005.

The announcement comes just ahead of a scheduled trip by US President Barack Obama to Shanghai and Beijing between November 15 and November 18, his first official visit to the nation.

Yesterday's statements did not specify a timetable for the Shanghai park or reveal its size or investment figure.

Earlier media reports have placed the cost of the park at around US$3.6 billion, with an estimated size as big as 10 square kilometers.

Analysts said building a Disneyland could help the city sustain economic growth via investment and spending after the Shanghai 2010 World Expo, a six-month extravaganza that starts next May.

"Like World Expo, the Disney park will also present a golden chance for the city to develop its services industry," said Tu Jun, an analyst with Shanghai Securities Co. "It could drive investment in the short term and boost consumption in the long term."

Industries set to benefit from the park would likely include real estate, infrastructure construction, catering, tourism, transport, hotels and tourism, Tu said.

Despite the opportunities that Disneyland is expected to bring to Shanghai, experts warned that the park could prove challenging to fledgling operators in the city's entertainment and cultural industries.

"Disney is an empire in the cultural industry and is super strong in innovation," said Huang Renwei, an economist and vice president of the Shanghai Academy of Social Sciences.

Prices issue

"It may bring challenges to Shanghai's nascent innovation industry and make it difficult to survive for some small firms in such fields as designing and advertising," he said.

Huang also said that Disneyland would mean Shanghai had to raise its capabilities to receive visitors and improve quality in services.

"It will be like a never-ending World Expo," he said.

News reports in the past several years about Disneyland in Shanghai have already stoked local city residents' enthusiasm.

However, some said that ticket prices and the park's environment would hold the key to their attendance.

Hong Kong Disneyland charges HK$350 (US$45.16) for a one-day ticket.

"I may not go if the price is set as high as Hong Kong's," said Eric Chen, a 26-old-year doctor. "I also don't wantto spend most of my time waiting in long queues and only enjoy rides and games for several minutes."