Two weeks after a top Chinese government planning body warned against the “blind” construction of theme parks, Walt Disney unveiled the first expansion of its Shanghai Disney Resort with the presence of municipal government representatives sporting grins nearly as large as the entertainment giant’s cartoon icons.
Shanghai Disney Resort on Thursday opened its Pixar Toy Story Land, the first addition to the 3.9 square kilometre complex since it started operation in June 2016, according to a statement. The new area is based on the popular animation franchise Toy Story, which introduced the world to Woody the Cowboy and Buzz Lightyear.
The theme park is a joint venture between New York Stock Exchange-listed The Walt Disney Company and Shanghai Shendi Group, a state-owned enterprise set up by the Shanghai municipal government. Shanghai Shendi Group holds a 57 percent stake in the park while Disney owns the remaining 43 percent.
A Happy Public-Private Partnership
“The new Disney·Pixar Toy Story Land further elevates the guest experience,” said Fan Xiping, chairman of Shanghai Shendi Group in the statement. “Shanghai Disney Resort has quickly become a premier tourism landmark in this city, for both Chinese and foreign visitors. We look forward to continuing the close collaboration with The Walt Disney Company as we further position Shanghai as a world-renowned tourism city, introducing exciting new experiences to guests and delivering a top-tier level of service.”
The American company responded with equal enthusiasm. “We’re grateful to the people of China for wholeheartedly embracing Shanghai Disney Resort, for truly making it their own and also making it one of the most successful theme parks we’ve ever opened,” said Bob Iger, chairman of The Walt Disney Company.
The park recorded over 11 million visitors in its first year of operation, Disney said in June last year. That attendance made the mainland China project the company’s best performing theme park in its first year after the company had previously opened international outposts in France, Japan and Hong Kong. Iger said last June that the park could break even in the 2017 financial year, according to press accounts.
Local Developers Warned Against Debts
The partners’ confidence in the joint venture is driven by the growing demand for themed entertainment in China, Disney said. However, the mainland government’s enthusiasm for theme parks does not seem to apply to efforts by local developers.
In early April, China’s National Development and Reform Commission (NDRC) said theme park developers should “prevent the formation of local debt risks, social risks and financial risks,” according to a statement on its website.
“In the development of theme park construction we’ve seen unclear concepts, blind construction, imitations and plagiarism, low-standard duplication and other issues,” the NDRC said, adding “local debt risks” were emerging in some areas.
During July last year, Wang Jianlin’s Dalian Wanda sold 13 theme parks to Sunac for over RMB 43 billion, as the property developer struggled to repay bank loans. A month earlier, Wanda was among the companies targeted for scrutiny over their debts when the then China Banking Regulatory Commission (CBRC) asked financial institutions to review borrowings by some of the mainland’s biggest conglomerates.
Wanda’s counterpart China Evergrande Group, however, had announced plans in the following month to expand its tourism portfolio to include 15 “Children’s World” theme parks across the country over the next two to five years, adding to an existing project in the city of Changsha.
In 2016, Kaisa Group announced that they were planning to build a RMB30 billion ($4.4 billion) international theme park in eastern Shenzhen to be opened in 2020. The developer expects the 1.5 million square metre Shenzhen fun city to host as many as 2.3 million visitors annually. Subsequently, in April, 2017 Kaisa hired the former vice president of operations for Hong Kong Disneyland Noble Coker to implement the company’s plans for building theme parks in the mainland.