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Obama’s Shanghai Surprise?

For nearly two decades, beginning with Frank Wells wining and dining Chinese officials in 1990, the Disney corporation has danced around the possibility of building a theme park in Shanghai. China’s largest city was long a target destination for former Disney CEO Michael Eisner, but despite frequent negotiations during the 1990s the park was never built. Some sources claim that Disney themselves delayed the plans, unsure that the city was ready to support such a project. On the other hand, in the wake of the Tiananmen Square massacre the Chinese government was keen to stem the tide of western cultural influences in their territories.

Global map of Shanghai Disneyland locationMap of the future Shanghai Disneyland site, zooming from a global view (top) to the site itself (bottom). Click to enlarge.

By the turn of the century, Disney’s attention was diverted to the planning and construction of Hong Kong Disneyland and Shanghai was put on the back burner. Work continued on the project; Disney signed a deal to build a park on the Chinese mainland in 2002, and, rejecting bids for the park by Beijing and Tianjin, contracted with Shanghai’s Lujiazui Group to develop a site there. But when the park in Hong Kong opened to poor reviews and seriously underperformed financially, Disney was forced to enter into years of intractable negotiations about the hundreds of millions of dollars needed to enhance that resort and progress stalled again on the Shanghai project. These delays were compounded further by a 2006 corruption scandal within the Shanghai government, which implicated local Communist Party chief Chen Liangyu. Still, Shanghai remained one of Disney’s key initiatives; the now-famous rendering from the 2006 Disney annual report shows a “new Disney theme park” that many believe to be a concept for the Shanghai park.

Rendering of possible Shanghai Disneyland, 2006Possible rendering of Shanghai Disneyland concept, 2006

The rendering, shown above, depicts a new type of layout for a Disney park. Surrounding a central lake, it more resembles Universal’s Island of Adventure. Various lands that can been seen in the illustration; one resembles Tokyo DisneySea’s Mermaid Lagoon, there’s a futuristic area visually reminiscent of the original DisneySea’s Future Research Center, a fairytale castle sits atop a hill with a rollercoaster in the distance behind, there’s a South American temple straight out of Indiana Jones, and a European village surrounding the castle. Despite the prominent placement of this image in a widely-distributed publication, little else was seen or heard stateside about the Shanghai efforts.

In the Asian press, though, gossip about the park continued over the years. In March of 2006, Shanghai’s mayor had announced “preliminary preparations” for the park. Two years later, in March 2008, Mayor Han Zheng announced that the city had officially applied to the Chinese central government to build the park. Negotiations ground on.

This year, though, the wheels of progress began to slowly turn once more. A series of approvals, leaked in the state-run and local media, traced the slow but steady development of the resort plan. Since January when Mayor Han Zheng announced that the city had signed a nonbinding agreement and project report with Disney, and Disney themselves confessed to the plans, all parties have been waiting for word from Beijing. In June, it’s believed that the project was approved by the National Development and Reform Commission, the Chinese government’s economic planning agency. Earlier this week, the state-run Securities Times reported that the central government in Beijing had given its final approval to the plan earlier this month, and that it was now up to Shanghai officials and Disney to finalize the details of the deal.

According to Reuters, they may finally have a deal. Sources are speculating to the wire service that a deal may be announced during U.S. President Barack Obama’s visit to China from November 15th-18th. A front-page editorial this week in the state-run Shanghai Securities News called for such an announcement, giving a great deal of credence to the notion. News stories anticipating an “upcoming” announcement have popped up frequently over the years, but the recent string of significant advances suggest that the rumors might finally be true. Stocks in construction companies and other related local industries spiked on the announcement, at least the second time this year that has happened. Leaked quotes over recent weeks insist that all that remains to be negotiated are small details, and those are insignificant in the grand scheme of the deal.

Another piece of the puzzle has come this weekend, when the ever talkative Mayor Han Zhang announced he’d hold a press conference this week to discuss the project. According to the Mayor, since he apparently gets asked about the Disney project at every press conference, it’s now time to discuss the issue and there are so many aspects of the subject to discuss that it requires its own press event. Other reports echo that a deal is near, with many of the few remaining points of discussion surrounding various trade and media deals that accompany the park agreement. Disney is using the Shanghai park as its major entry into the Chinese entertainment market, and so the eventual deal will have a far greater scope than the park itself. It also hinges, in part, on the continuing progress of Sino-U.S. trade negotiations.

Rumors about the resort itself have flourished over the years; most recent reports peg it as a $3.6 billion development, of which Disney will own a 43% stake and a local government-owned holding company would own 57%. While the Shanghai government originally suggested that Disney build on the underdeveloped Chongming Island, Disney rejected that site and opted to build on the mainland. The park will now occupy an 8-10 acre site in the town of Chuansha, on the southern edge of Shanghai’s Pudong district. It is currently slated to open in 2013. While the delay in an actual deal might have proved frustrating to fans, it has also allowed the Chinese government to make the necessary infrastructure upgrades to the fairly rural area. Shanghai Disneyland, when built, will benefit immediately from high-speed rail links and direct connections to major highways.

Possible Shanghai Disneyland site planRumored “leaked” site plan for Shanghai Disneyland development. First phase of development is outlined in red; the theme park area is circled in pink. Note how the C-shaped lake resembles the park’s rendering from 2006. Also note the MagLev depot to the north of the park. Personally, I think the Piggery will be a definite E-ticket. Click to enlarge.

What the park’s attraction lineup will resemble has been a source of great speculation recently. While a leaked site plan, allegedly by the ARUP development corporation, contains a water feature that greatly resembles the 2006 park rendering, it’s unknown if the eventual park will match any of these designs. After all, Hong Kong Disneyland itself differed greatly from even its early official press releases, and the pirate land concept for Hong Kong that was also featured prominently in the 2006 annual report was eventually abandoned.

Much of the discussion online has been about how Disney’s new franchise mania will affect the park’s aesthetic. Many expect pirates, princesses, pixies, and Pixar to rule the day, and if fans think the current park attractions are character-heavy then they haven’t seen anything yet. The latest gossip, featured on Screamscape and elsewhere, brings up the possibility that the Shanghai site will be Disney’s first park to include characters from Marvel Comics. Others expect the park to receive Hong Kong’s rejected pirate land, although that is sheer speculation.

Nevertheless, this will be the first Disney park to fully reflect CEO Bob Iger’s oft-stated push for “franchises” and “properties.” The sole purpose of this park, from management’s perspective, often seems to be to fully inject Disney’s intellectual property into the subconscious of billions of young Chinese. Regardless of Imagineers’ sincere efforts to build a quality theme park, some fans are concerned that the real purpose of Shanghai Disneyland is not to create a great park but to capitalize on all those viewers of the new Disney cable and satellite channels and of millions of hopefully non-pirated DVDs. The final product’s makeup can be deduced by the occasional comments by management over difficulties in Hong Kong; they often speak of how Chinese children are unfamiliar with western fairytales and are thus unaffected by the traditional Fantasyland attractions. Unless they’re planning on basing Shanghai Disneyland on traditional Chinese stories, which I doubt, or letting quality attractions stand on their own merits, which I also doubt, one fears that the order of the day will be Pixar, Pixar, Pixar.

But again, this is all speculation. It appears that Disney is trying to build a new kind of Disney kingdom, which is good considering that there are already two traditional Disneyland-type parks within the region. There’s certainly room for innovation, and hopefully in the shadow of Hong Kong Disneyland’s difficulties the Imagineers will be given wider leeway to really build something that impresses. We still have no idea when we’ll ever actually find out something substantive about the project, but all signs indicate that it will be sooner rather than later.

UPDATE: It looks like land expropriation for the resort has begun. Apparently, for several years the Shanghai government has been filing preparatory expropriation plans for something called “Buenaland Shanghai”. Very clever, guys. Apparently the Shanghai press, who didn’t pick up on this at all, needs to hire some Disney nerds.

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11 comments to Obama’s Shanghai Surprise?

  • RandySavage

    The first ten paragraphs of this piece equate to tier-one, magazine-level reporting on SDL. Well done. Two things I might edit:

    First: I’m not sure the water feature on the map “greatly” resembles the one in the art. When I put together comparison image I thought it was a bit of a stretch. “somewhat resembles” is probably more accurate.

    Second: “The sole purpose of this park, from management’s perspective, is to fully inject…” and “the real purpose of Shanghai Disneyland is not to create a great park but to capitalize.” There is the definite (and hopeful) possibility that the purpose is to create a great park AND introduce their media franchises AND attract Chinese with original attractions of their own merit (as HKDL is doing with Mystic Point, Grizzly Trail).

    If the 2006 Annual Report image represents SDL than this will be a very exciting project to follow.

  • First, thanks very much – that means a lot.

    You are correct about my imprecise language, which I regret. I do think that, if that map is a real document, there’s a less-than-coincidental correlation. But that might have been a bit hyperbolic.

    I think that I probably did veer off track towards the end, and I must admit that it was from sheer laziness. I’m an extremely slow writer and after about two days piecing it all together I just wanted to get the darn thing out the door. My concerns stem from a lot of comments I’ve read about the desire to introduce Disney properties into the Chinese market, and their willingness so far to abandon certain ideas because there’s not a pre-existing demand, but I passed the buck on sourcing everything. There’s also my fear that they’re unwilling to embrace good, non-franchise ideas on their own merits, but you’re spot on in pointing out that Mystic Point and Grizzly Trail rebut that point.

    Maybe I’ll cheat and clean it up a little bit. :) I have no principles.

    I draw a distinction, of course, between the intents of WDI and the intents of corporate management. I have no doubt that WDI will try to knock it out of the park. What happens then, though, is anyone’s guess. WDI, by all accounts, did the job on the pirate expansion but then something happened along the way.

    Of course I hope you’re right and I hope they thread the needle – heaven knows it’s possible. I have these horrible visions of franchise city – of Pixar in every land and the Fantasic Four swooping around – but I am prone to over-dramatize things….

    Anyway, spread the word about the magazine-level reporting – I’d love a job. :) I’ve even been known to skip the editorializing… from time to time.

  • One more thing – it will definitely be an exciting project to follow. I realized the other day that this will be the first new park I’ve ever covered on Progress City. So yeah, I’m looking forward to the announcement.

  • RandySavage

    I definitely agree that it is very possible that WDI (at corporate’s behest) will make the park franchise city… but it is just too early to declare it officially.

    Even if the Shanghai announcement doesn’t come soon, there is some interesting stuff happening as work nears completion on Harry Potter Land & Universal Singapore – both seem to be showcasing a high level of execution:

  • Another Voice

    I must back Michael up on this.

    The entire point of Disneyland Shanghai is to cram Disney’s foot into the Chinese market. The 10-15 million visitors a year to a park are nothing compared the billion plus pairs of eyeballs that could consume Disney films, video, cable and other presented media. Iger and friends have stated time and time again that Disney’s overall objective is to push their created content through new channels – and that the channels themselves (like theme parks) are simply a means to an end.

    The entire concept behind the “regional” parks was to serve as a “Disney hub” for an expanding media presence in a region. You can see it’s roots with Disney Studios Paris that included a large Disney Channel production facility (that never really worked out). Hong Kong Disneyland – the first of the proposed chain of parks – was such a flop that the studio expansion has been put on hold, as have the proposed Disneyland India and Disneyland South America developments. Disney Regional Singapore has been outright canceled.

    Right now China only allows a handful of western-made movies to be released theatrically. Disney, thanks to ‘Red Corner’ and a perception of general heavy handedness, has never been a favorite of the Central Communist Government. ‘Mulan’ was made expressly to crack that barrier, but Disney so screwed up the story from the Chinese point of view* that it backfired. Even ‘Pirates: At World’s End’ was tailored to China, but Yun-Fat Chow speaks too freely and the Government did not like that Chinese were depicted as pirates and unsavory characters. Then on top of all of this, add on a huge heaping of generalized xenophobia…and you’ve got a tough market.

    The problem with all of this is the same issue that sank Hong Kong Disneyland and, to a certain degree, Euro Disney. The local governments that build these developments expect the parks to be a successful business in their own right. They don’t care about Disney’s grander strategies. Yes, it’s great that Hong Kong allows a couple hours of Disney cartoons on television, but they’d much rather hear more turnstiles clicking.

    Whatever happens in Shanghai will depends on how these conflicting goals are reconciled. Certainly the experience with Hong Kong has made China much more leeary of Disney’s alleged business expertise, and seeing a billion dollars in box office go to Sony’s ‘Spider-man’ flicks has made Iger even more rabid for space at the trough than before.

    * – Disney made a traditional princess “girl-power” flick, but the original fable is anything but that. The original version of Mulan is all about knowing one’s place in the family and scarifing oneself to the group. This is a theme that the Communist government rapidly picked on, replacing party and government for the family. The concept of personal freedom is wholly unwelcome in China.

  • android.dreamer

    It is really tough to discern between what the Imagineers say will happen and what Corporate actually does. Correct me if I’m wrong, but hasn’t every time they did a theme park, management rushed “phase 2″, or even “phase 1″, and ended up cutting a lot out of each park? And then they never added those improvements later? It is amazing to even see that Disney actually does the things they do, despite how much grievance we may have with their poor treatment of the ‘Disney Magic’. Asia is what is hot and with TEA showing Disney parks as the most attended in the world, it has a lot to say about their ability to expand, despite their thinking that the Disney parks can’t be a central part of their business, they sure having a large part with haing 4 foreign parks, even where Disneyland Paris is having large attendance relative to the competition. It does make good sense to keep expanding to seize Asia and maybe, if they are disgustingly greedy enough, mini satellite parks in smaller countries, like over-sized Disney stores. I will bet 33 cents on the dollar that they do end up doing something in Shanghai. But don’t be surprised if the big plans end up as Resort area like the plans in Hawaii.

  • philphoggs

    This place is perfect for Rasulo.. rampant capitalism only bridled by a heavy handed militaristic regime.

  • […] Where is it on google earth? I showed the location in this […]

  • bfdf55

    The rendering looks more like a concept for a Korea park. It doesn’t appear to fit the flat location shown on the map.

  • Dave Leydon

    Great post. Just found an excellent site with UK government documents on it – is a really well built site and them seem to be very up to date – always posting the latest UK government documents released to the public. Worth a look.

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