The deal is a very significant landmark for the Chinese as well as Disney, which has been working on the project since a decade. The company had proposed the deal, but it needed permission of the local government. Now that it’s been cleared, the park will be built.
"Currently, the Chinese and U.S. sides of the project are in deep discussions on concrete details of cooperation and will work together to build a world-class Disney park in Shanghai's Pudong New Area," said the Shanghai government.
Work to begin from June 2010
Some believe that the announcement was planned just weeks before President Barack Obama’s trip to China.
The media reports have put a cost of $3.6 billion to the park. The Chinese government information office reported that the land expropriation work has started. It involves an area of about 6,134 mu (2,089,435 square meters).
"The first-phase of the project will be in the South of Huanglou Area, an area in Chuansha Town, the southeast suburbs of Shanghai's Pudong area; and the second phase will be extended further southwest," said an unnamed urban development expert from Shanghai.
The removal work will initiate from June 2010.
Competitors in the line
Disney is one of the most active foreign entertainment companies in China, with more than 600 employees in China and products sold in 5,000 branded and retail outlets.
Disney hopes to open the Shanghai Disneyland by the year 2014. It already has operations in Hong Kong, where its fifth resort was built in 2005. The Shanghai park would be Disney’s sixth.
Although Disney does not view the two parks as competitors, few others hold a different view.
“Visitors from Guangdong and southern China will still find Hong Kong more convenient while Shanghai will attract visitors from northern and eastern China,” said Paul Tang, chief economist of Bank of East Asia.
"From our point of view the Hong Kong and Shanghai parks are not competitors, they're complementary," says a spokeswoman for Disney. "We really believe that the greater China market is big enough to support multiple parks."
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