Chinese authorities have issued orders to halt the development of new theme parks. The sector has been enjoying a boom in recent years.
The new guidelines were issued by the central planning department, the National Development and Reform Commission. It said that large parks, involving over $235 million of project spend, would come in for special scrutiny.
The move appears to have two targets, the build-up of debt by provincial and city governments, many of which have been on a decade-long spending drive; and housing and office projects that are disguised as theme parks or similar cultural facilities.
“In the development of theme parks we’ve seen unclear concepts, blind construction, imitations and plagiarism, low-standard duplication and other issues,” the NDRC said, adding in some areas “local debt risks” were emerging. In the private sector, Dalian Wanda last year sold many of its theme parks to Sunac China, after the government intervened to force Wanda to reduce its debts.
China has seen the development of dozens of theme parks in recent years, ranging from major international collaborations such as the Shanghai Disney Resort, through to smaller ones with fewer concepts. Business models also differ. The Hengdian World Studios, near Hangzhou, claims to be the world’s largest film making facility. Film productions can use the site at discounted rates, with the facility earning revenues from streams of thousands of tourists per day.
Reuters cites market research firm Mintel as showing that China’s theme park market grew by 27% last year, with revenue hitting $6.27 billion.
It is not clear whether the NDRC intervention will bring an immediate halt to such large projects that can take years to build, or whether it halts the greenlighting of new parks.
With what appeared to be particularly bad timing, Korean digital effects company Dexter announced on Monday that it had won a $5.8 billion (KRW6.2 billion) contract to provide VR and other effects to a theme park in Hainan, being built by leading Chinese property developer Evergrande.