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Shanghai Disney Resort brings impetus to tourism and commerce

This is the sixth part of a series on Shanghai's key functional zones during the 12th Five-Year Plan period and business opportunities arising therefrom.

Disneyland has become the new highlight of Shanghai's economic development during the 12th FYP period. Since the official commencement of Shanghai Disney project in April 2011, the theme park and the supporting municipal services projects are progressing in an orderly manner as planned.

The theme park of Disneyland has a planned area of 7 km2 where Phase One will come into operation at the end of 2015 as scheduled. Shanghai will speed up the construction of its International Tourism and Resorts Zone with the Disney project as the core, in a bid to build up a world-class tourist destination. The Disney Resort has already started its recruitment of business operators in a low-key manner and received heated response. Some enterprises are also fighting their way to seize the opportunities arising therefrom.

I. Planning of the areas surrounding Disneyland

Construction of the resort infrastructure has already commenced in full swing. According to Shanghai's official announcement, the investment of Disneyland amounts to some Rmb25 billion, where Rmb10 billion is planned to be injected in 2012. Taking into account the operating cost upon completion, the total investment will exceed that of Shanghai World Expo. Shanghai Disneyland is the sixth Disneyland worldwide and the first on the Chinese mainland. As the largest modern service project launched in China in the last 30-odd years, it helps to raise the competitiveness and influence of Shanghai further, boosting the city's role in stimulating the economy of Yangtze River Delta (YRD).

At the commencement ceremony of Shanghai Disney project, Robert Iger, the chief executive of Walt Disney Co, pointed out that the planned resort would be both authentically Disney and distinctly Chinese. The castle in Shanghai Disneyland will be the tallest and largest among all the Disneylands in the world.

Disneyland is not only a theme park. The planning of its surrounding areas aims at drawing in different services such as entertainment, creative business, convention and exhibition, tourism and hotel business that tie in with the city's industrial restructuring efforts.

II. A low-key business recruitment with heated response

Disney Resort has already started to recruit business operators. The business recruitment base for the Disney Resort jointly set up by the Administrative Commission of Shanghai International Tourism and Resorts Zone, Shendi Group and the related parties has been open for operation. Situated next to the Disney project, the base serves as the office for related enterprise registration and business dealings. Personnel have been sent to Hong Kong and other cities by the related departments to recruit business operators and promote investment. Enterprises from overseas, the Chinese mainland and the city itself have already visited the Disneyland support zones and indicated keen interest in the development. The related business recruitment of the Disney project has attracted the attention of numerous enterprises with investment in tourism, performing arts, creative and cultural, retail, catering and hotel industries. The Resort has approached many large enterprises and listed companies in a low-key manner. Some real estate enterprises have also tapped into the residential development of the surrounding areas of Disneyland. Enterprises such as Sany Heavy Industry, Kimberly-Clark, Lansheng Group, Marinetec Development and China Eastern Airlines have already taken the lead in moving into the surrounding areas.

III. Giving full play to Disney effect

For Shanghai city itself, all the related sectors and departments are racking their brains on how to give full play to the impact of the Disney project and the International Tourism and Resorts Zone. Pudong and Chuansha, in particular, are taking positive actions to fully integrate with the theme park project.

The nearby YRD region is also seizing this opportunity to strengthen its inter-city links with a view to driving the overall industrial restructuring and functional upgrading of the cities so as to give full play to the "Disney effect".

Following the smooth commencement of the Disney project, related investments have increased. A large number of leading enterprises have flocked to the nearby areas, and many renowned enterprises are also vying for business opportunities arising therefrom.

1. Industrial sectors

Surrounding the Disneyland zone a cluster of related industries with "experience + culture + creativity" as the theme will emerge. Various industries such as tourism, convention and exhibition, modern commerce and trade, culture, shipping and logistics, and equipment production will benefit directly, forming an upstream and downstream Disney industry chain, which is expected to generate trillions of yuan in GDP every year. 

Once the Shanghai Disneyland becomes operational, it will stimulate the business of close to one hundred sectors. Among them, tourism, modern commerce and trade, and cultural industries will receive the greatest benefits. Besides, a new pattern of service economy will also emerge and prosper. The Disney project will bring new opportunities for development to the related industries and talents will be speedily pooled together, complemented by optimal transport, business and daily life support. 

2. Business offices

The emergence of large industry clusters will generate substantial demand for business offices in the tourism and resorts zone. Many international industrial parks and headquarters economy parks in the surrounding areas such as Zhangjiang, Jinqiao and Pudong Airport have become the prime choices for enterprises. The siting of Pudong Software Park and other industrial parks at Chuansha is obviously targeted at the development opportunities brought forth by the Disney effect. In their effort to solicit tenants, some office buildings in the surrounding areas are giving priority to emerging strategic industries and high-end services such as software development, animation production, information technology and cultural and creative industries. These parks are strengthening their research, development and incubation services in speeding up the clustering of talents, technology, information, market and other creativity elements in order to expand their influence and attract more enterprises.

3.  Tourism

Disneyland will generate a strong impetus to the tourism market of Shanghai. At present, a large number of domestic and overseas tourists come to Shanghai every year. In 2011, Shanghai attracted 109 million tourists from other provinces and 122 million tourists from the city itself, and the per capita spending of these domestic tourists was Rmb1,207. In the same year, 8.18 million international tourists entered Shanghai and their per capita spending was US$713. Since the YRD as well as Jiangsu, Zhejiang and Anhui provinces are all densely populated with good transport links, they will also become the primary catchment area of the Disneyland in the days to come.   

China has a population of more than 1.3 billion, yet it lacks a theme park of such a scale with such an attraction. As the first Disneyland on the Chinese mainland is also going to be the newest, tallest and largest in the world, it will bring forth a great sensation upon its opening with an impact comparable to Shanghai World Expo 2010. When the tourists come to Shanghai, they will not only visit Disneyland, but will also go to other scenic spots, commercial streets and shopping malls. They will try the special cuisines and drinks, and buy some souvenirs as well. In this way, the tourism, hotel, catering, sightseeing and transport industries of Shanghai will all directly benefit.

4.  Culture

All the historical and cultural projects in the surrounding areas are trying to integrate with the Disney project. Chuansha New Town has made its application for inclusion as China's famous historical and cultural town an item under the development target of its 12th FYP. Aiming at giving full play to the Disney effect through building up the support zone of the International Tourism and Resorts Zone, Chuansha is speeding up its ancient city tourism projects. Among them, "Neishi Residence", the famous Jiangnan (meaning "south of the Yangtze River") home of many modern and contemporary celebrities such as Song Qingling, Huang Yanpei, Hu Shi and Huangzi, has already undergone repair and a facelift, and the newly-renovated home of the past Huang Yanpei will soon be open. The Ancient City Wall Park recently open to the public is now building up its visitor volume. Little Putuo Temple, the famous Jiangnan temple, has laid its foundation and commenced construction. Following its repair and restoration, the 100-metre-long Nanshi Street is now re-opened to visitors with a new look. The river surrounding the ancient Chuansha city, which is more than 450 years old, will be shaped into an attractive scenic belt, and the design of its transformation plan has already been completed. Adjacent to Nanshi Street are Qiaojia Lane, Zhongshi Street and Beishi Street which are full of old street colours. They are the core of the historical and cultural district of Chuansha and will be restored and transformed. A group of exquisite architectures that came into being in the 1930s, such as Ding's Garden, Tao's Residence and Lu's Compounds will be repaired and conserved to become Chuansha's history and heritage museum, modern construction museum and printing museum. Through the reinstatement of its historical and cultural street zone, and the setting up of the hall of fame and hall of culture, Chuansha will showcase its urban culture and special customs and traditions of more than 450 years, lending support to the development of tourism of a regional scale that complements the Disney project.

5.  Commerce

Two outlets projects have already been finalised. The first one is the Pudong Outlets which is located in the vicinity of Yuandong Avenue Station of Metro Line 2, and is about 10 minutes from the Disneyland by car. The related relocation process is basically completed and the outlets can be open for operation by the end of 2013 if the progress is good. Another project "Premium Outlets" is a joint venture by Shanghai's Bailian Group and Simon Property Group of the US which is the developer of the largest brand-name discount shopping centre of the world. Contract has already been executed by both parties and the site is at the western side of Disneyland covering an area of 300 mu. Expected to complete between 2014 and 2015, it may draw in the international brands currently operating at the Woodbury Outlets and will become the largest outlets project on the Chinese mainland with the most exhaustive product mix and the most competitive pricing. Besides, some enterprises intend to construct shopping centres or work on other projects in the surrounding areas.

from special correspondent Qi Xiaozhai, Shanghai

Content provided by Picture: HKTDC Research
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