Mickey Mouse and Company are coming to Shanghai, but they're going to have to contend with a bit of debate over the exorbitant cost of a Disneyland that is predicted to cost more than the World Expo.
Citing the Shanghai government, the 21st Century Business Herald reported Thursday that the total cost of the 107-square-kilometer project - which began construction in November and will finish in 2015 - will exceed 100 billion yuan ($15 billion).
The core area of the theme park, covering seven square kilometers, costing about 25 billion yuan, the newspaper added.
However, a Shanghai-based investment fund manager, who is working closely on the project, told the Global Times on condition of anonymity that the reported budget is a very conservative estimate.
"Based on the experience of other Disney parks, it is safe to say that the project requires a lot of financing, and a one-time investment may not be enough," he said.
According to the Herald, developing the park's 13.6-square-kilometer supporting area will require about 40 billion yuan, and most of that cost will be covered by the Shanghai government.
If the reported budget is true, the park's 100-billion-yuan price tag will be significantly larger than the 23.6 billion yuan spent on infrastructure for the World Expo.
The massive park will be located in the Chuansha area of Pudong district.
Dong Qinfa, deputy director of the Pudong New Area's Financial Services Bureau, told the Global Times that the theme park is going to be the most important project in Shanghai since the World Expo, and it will propel the city into a period of economic growth.
Construction of the park is also in line with Shanghai's 2009-2012 Planning for Tertiary Sector Development, which aims at a 12 percent growth, or an increase of 1 trillion yuan, in the city's services industry.
Hua Jingbo, 25, from Shanghai, told the Global Times "it is really exciting to see Disneyland coming to the footstep of my home. It will definitely help Chuansha, as well as the whole city, open up and develop further."
Some analysts suggest that the park will benefit many other sectors in the city, such as employment, tourism, real estate, advertising and manufacturing.
However, as the second Disneyland in China, many people fear that the Shanghai resort will suffer the same fate as its counterpart in Hong Kong, which has been operating below expectations since it opened.
In 1999, when Asia was struggling through a financial crisis, HK$32 billion were invested to bring Mickey to Hong Kong. The region hoped the project would boost the faltering economy.
Since the 2005 opening, the number of visitors to the theme park has totaled 23.9 million, 22.1 percent fewer than what the local government predicted in 1999. And more troubling is that the park raked in just 14.7 billion yuan for Hong Kong in the first four years, or 53 percent than the original estimate, People's Daily has reported.
Suspected reasons behind the Hong Kong Disneyland's uninspiring performance include its relatively small size, competition from other attractions in the city and the fact that Chinese people on the mainland have to fill out paperwork before traveling to Hong Kong.
In Shanghai, the local government will own only 57 percent of the park despite putting up a big share of the infrastructure investment. Walt Disney & Co will hold the rest of the share by providing management and intellectual property.
This is almost the same cooperation method for the Hong Kong park, ifeng.com reported.
"As Shanghai is seeing a jump in inflation and an increase in CPI, local residents are more concerned about their daily lives than a Disneyland," Qiang Yongchang, a professor with the Economic Institute at Fudan University, told the Global Times. "It is not a wise choice to start the project right after the 180-day-long World Expo."
"Over 50 percent of tourists visiting the Disneyland in Hong Kong come from the Chinese mainland. Now they have another option in Shanghai, which requires no paperwork to visit. The park in Hong Kong is likely to suffer even more," he added.
Wan Jun, an economist at the Chinese Academy of Social Sciences, told the Global Times that if the Shanghai government can keep a cool head in the cooperation and wisely use the Disney brand, the new park will help the city a lot.
"The park in Hong Kong was hastily introduced to combat the financial crisis. Shanghai has no such concerns. However, they still need to bring some new elements to the project and manage it properly," he said.
