Shanghai Disneyland: Communist Party emerges largest backer

By: |
August 13, 2016 6:21 AM

Though capitalism and socialism make strange bedfellows, it is less known that the largest backer of Disneyland is the Communist Party itself

This summer, Walt Disney’s $5.5-billion Disneyland—an extravaganza of a narrowly-construed “American fantasy”—finally opened its doors in Shanghai, China. This was to a largely curious domestic audience who, up until now, had been unable to afford the luxury of next-door Hong Kong’s Disneyland. Certainly, the mad rush at Shanghai’s Disneyland—located at the south-eastern fringes of Pudong, which until 1990s was marshes, farmland and herdsmen, so-to-speak an area on Shanghai’s fringe—is to be seen to be believed. In the metamorphosis of the Pudong marshes and the coming of Mickey Mouse to Mao’s land, hangs many a tale.

But first the euphoria. Despite the exorbitantly-priced entry ticket to Disneyland (RMB 499 for peak season, about R4,900), folks, both urban and rural, young and old, have not stopped making a beeline—and this in a country where the average disposable income is RMB 1,830 (about R18,000). Three-hour serpentine queues for flight simulator “Soaring Over the Horizon”, the partial closure of “Adventure Isle Roaring Rapids” and the scorching Shanghai summer heat didn’t deter crowds who flocked armed with parasols, water bottles and a few sporting the ubiquitous Mickey Mouse T-shirts. Disneyland is expecting 20 million visitors in 2017. Chinese Tourism spending is estimated at $610 billion in China and abroad. There are about 120 million outbound Chinese tourists—six times the number of outbound Indian tourists (20 million). China’s domestic tourism is high during the two “golden weeks” (National Day in October and Spring Festival in February) and is on the upsurge. Mickey Mouse wants to cash in.
What does the arrival of Mickey Mouse in China mean? While there are little doubts about the sheer elasticity of China’s “socialism with Chinese characteristics”, the bottom line is Communist Party’s propensity for hard-nosed economics—where tourism and, de facto, consumption is the new mojo.

Certainly, Disneyland did not happen overnight, but came with the careful cultivation of Pudong.
Nothing exemplifies Pudong more than China’s moderniser-par-excellence Deng Xiaoping’s adage “build nests, the birds will come”. Pudong, an area on the wrong side of the Huangpu River, was long barren until it was identified as the “dragon-head of reforms” by none other than Deng Xiaoping in 1992. Since then, the urbanisation of Pudong has been phenomenal—attested by the world’s second-tallest skyscraper, Shanghai Tower. Pudong is a mirror to China’s urbanisation, from 17.9% in 1978 to 53.7% in 2013. Today, urbanisation—a la Pudong—has been identified as the core strategy for development by the National Urbanisation Plan (2014-20), with the objective of 60% urbanisation by 2020. Of course, Pudong has been successful, but the blind precipitous imitation of the Pudong strategy elsewhere by local governments has backfired. In fact, scholars and critics decry the same as “forced urbanisation”. That said, the sheer weight of state-led initiative to urbanise Pudong is no less laudatory.

Second, while business in India depends on political weather and ideological rhetoric, Disneyland was embraced with flexibility, if you please, to accommodate ideological lightweights such as Mickey and his friends. Disneyland witnessed little or no political upheavals (notwithstanding political succession struggles at Beijing)—when the Communist Party gave the commitment, it was for the long haul—start to finish.
While India continues to struggle with land acquisition, with the onus for acquisition resting on states, China does it swiftly and top-down. Disneyland covers 960 acres, nine times the size of Commonwealth Games Village, New Delhi—leading up to the relocation of 150 factories and the resettlement of 2,000 households belonging to four townships. At last count, there was no social assessment project, but there was no widespread bungling of finances in the resettlement either.

Thus, business in China largely rides on the diktat of the Party, which has a long-term vision. Disneyland was a hard-won fight with lobbying and negotiations, starting in the late 1990s. The chief executive of Disney, Robert Iger, first visited Communist Party leader Yu Zhengsheng in Shanghai in 2008. To Disney’s credit, a photograph of senior Xi (father of current Chinese President Xi Jinping) shaking hands with Mickey Mouse at Disneyland (presumably in California) in 1980 appeared as a token of friendship—no doubt, a veritable diplomatic coup.
Though capitalism and socialism make strange bedfellows, Disney’s entry was not all about diplomatic manoeuvres only. It is less known that the largest backer of Disneyland is the Communist Party itself—in the shape of Disney’s local partner, state-owned, joint-investment holding Shanghai Shendi Group.

While Disney owns 43% of the resort, the Shanghai Shendi Group, in addition to 30% control of the Disney management company, takes “57% stake in the Shanghai resort, which includes revenue from hotels, restaurants and merchandise sold on the grounds.” This has been a cut-throat deal as opposed to Disney’s presence in Hong Kong (2005), which literally cajoled Disney to set up shop.
Third, Pudong, the dragon-head, has spurred a multiplier effect. Now, Shanghai Shendi Group has concluded a deal with US outlet developer Value Retail to build an outlet and a seven-star hotel, Shanghai Atlantis resort will follow.
At Beijing, Universal Studios has said that its sixth theme park globally—after Hollywood and Orlando in the US, and in Spain, Singapore and Tokyo—will be operational by 2019.

Fourth, at the home front, Chinese billionaire and largest commercial property developer Wang Jianlin (head of the Dalian Wanda Group which signed a preliminary agreement with Indian authorities to develop Wanda Industrial New City in Haryana) has likened Disney to a “lone tiger” against a “pack of wolves”, indicating competition at the home turf.

For now, the pack of wolves seem to emanate from the Wanda stable and should not be underestimated. A lavish array of theme parks have been set afloat by Wanda in tier-2 cities—such as Wuxi (near Shanghai), Nanchang (730-km east of Shanghai), Hefei (460-km east of Shanghai), Harbin (2,300-km north of Shanghai) and Xishuangbanna (2,900-km south of Shanghai)—which are centred not around Mickey Mouse or even Pokemon, but elements of local Chinese ethnic culture, geography or tradition. Reportedly, Xishuangbanna theme park features adventures around the old Tea Road (route) and a jungle adventure with a rainforest theme. In other words, will Wanda give Disneyland a run for its money?

Disneyland in Shanghai has a sense of “Chineseness”—as it does in Japan with a certain “Japaneseness”. But Mickey Mouse has also come with American prices in China—RMB 60 doughnut, RMB 60 balloon (about R600) and an overpriced ticket. Ten years ago, Disneyland would have been a monopoly, but what about today? Those who have been to the string of mid-range Wanda hotels know that it cuts no corners and so it is with the Wanda theme parks. In other words, while the euphoria is palpable, Disneyland’s fate in the long run is the big question.

Last but not the least, be it Mickey Mouse or Wanda’s Tea Road adventure, grant it to the Communist Party, which has done its math well—an eye on tourism, the burgeoning middle-class and a ride to the bank. With global and China’s slowdown in exports, a thrust towards domestic consumption, Disneyland (and Wanda parks) all help drive up consumer spending.

The author is a Singapore-based Sinologist and adjunct fellow at the Institute of Chinese Studies,
New Delhi. She is the author of
“Finding India in China”

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