Big de­vel­op­ment is a mixed bless­ing

China Daily (Canada) - - CHINA - By LI YANG

Dalian Wanda Group, one of China’s largest real es­tate de­vel­op­ers, an­nounced last week that it will open its largest film park this De­cem­ber in Wuhan, Hubei prov­ince in cen­tral China.

Wanda hopes the park will play a key role in re­viv­ing Wuhan’s tra­di­tional cul­ture by fund­ing the spread of its cel­e­brated em­broi­dery and mak­ing the city more mod­ern and in­ter­na­tional.

The film park, with a mil­lion square feet of floor area, is both a commercial and en­ter­tain­ment com­plex. Wanda has in­vested nearly $656 mil­lion in the early phases of the project, which in­cluded re­build­ing an old busi­ness road in the city cen­ter. Wanda says it will make 500 mil­lion yuan an­nual net profit from it start­ing next year.

Wang Jian­lin, pres­i­dent of Wanda and one of the rich­est men in China, has long been an ad­vo­cate of cul­tural in­dus­try and that fore­sight has en­riched the de­vel­oper’s businesses and given it more trans­for­ma­tion op­tions when China’s property mar­ket cools down, Wang pre­dicts.

Wanda is one of the largest the­ater own­ers in China to­day, with 85 large shop­ping plazas and nearly 60 five-star ho­tels as of last year.

It runs about 1,300 movie screens and earned 4 bil­lion yuan from its cin­e­mas last year. It built 260 new film screens last year and its rev­enue from cin­ema has grown about 30 per­cent an­nu­ally in re­cent years.

Since ac­quir­ing the world’s sec­ond-largest cin­ema chain — US-based AMC En­ter­tain­ment —two years ago for $2.6 bil­lion, Wanda has paid more at­ten­tion to ex­pand­ing over­seas.

Wang aims to con­trol 20 per­cent of cin­ema chain out­lets in the world by 2020, when cul­tural in­dus­try will con­trib­ute to 55 per­cent of Wanda’s profit.

Last year, Wanda’s sales rev­enue hit 186.6 bil­lion yuan, up 31 per­cent year on year. It has main­tained an an­nual growth above 30 per­cent for eight con­sec­u­tive years.

The sales rev­enue of its cul­tural in­dus­try busi­ness was 25.5 bil­lion yuan, an in­crease of 23 per­cent year on year, of which 16.7 per­cent is from AMC En­ter­tain­ment.

How­ever, some an­a­lysts view Wanda’s in­ter­ests in the cul­ture in­dus­try more as a pre­tense to buy land from gov­ern­ments rather than a real com­mit­ment to re­new China’s lack­lus­ter cul­ture in­dus­try.

Since 2012, the cen­tral govern­ment has urged lo­cal au­thor­i­ties to de­velop cul­tural in­dus­try, be­cause it pro­motes in­no­va­tion, raises pub­lic moral­ity and does not pol­lute the en­vi­ron­ment.

La­bel­ing real es­tate projects “cul­tural in­dus­tries” helps property de­vel­op­ers buy land from the govern­ment more eas­ily and at lower prices, crit­ics charge, adding that large property de­vel­op­ers like Wanda also op­er­ate their projects af­ter they are com­plete, still en­joy­ing the pref­er­en­tial tax poli­cies for cul­tural in­dus­try.

Many com­peti­tors think Wanda’s real pur­pose is to ac­quire land. Rev­enues from sell­ing the 1.5 mil­lion square me­ters of apart­ment houses newly built along the old road re­built by Wanda in Wuhan, which costs nearly three times that of build­ing the cin­ema park, will earn Wanda at least 10 bil­lion yuan in the first year of sales, and cover its in­vest­ment in the cul­tural in­dus­trial fa­cil­i­ties in the en­tire project.

Wanda has sim­i­lar projects in He­fei of An­hui, Haerbin of Hei­longjiang, Nan­chang of Jiangxi and Qing­dao of Shan­dong, all of which started in the last five years.

The over­all in­vest­ments of these cul­tural and en­ter­tain­ment parks amount to about 200 bil­lion yuan. Each park cov­ers dozens of hectares in the city’s places of his­tor­i­cal in­ter­est, be­cause Wanda al­ways em­pha­sizes its cul­tural projects must closely mesh with lo­cal cul­ture and his­tory. The land it has ac­quired in cities as sites for cul­tural projects would be very ex­pen­sive to buy other­wise, ob­servers say.

Most of the cities on Wanda’s new ex­pan­sion list are sec­ondtier cities, with huge pop­u­la­tions, gov­ern­ments with a strong de­sire for in­vest­ment and the cus­tomers long­ing to ex­pe­ri­ence the cin­ema and en­ter­tain­ment that ex­isted only in Bei­jing and Shang­hai be­fore.

But Wanda does not seem to have the abil­ity to meet all these de­mands.

The film parks de­signed by Western en­ter­tain­ment ar­chi­tects do not fit well into the his­toric con­text and city en­vi­ron­ment of the cities.

Apart from in­tro­duc­ing some dull brands and the pop­u­lar cul­ture of the United States fea­tur­ing Hol­ly­wood block­busters and fast food, the real es­tate de­vel­op­ers’ cul­tural projects do not con­trib­ute ef­fec­tively to lo­cal cul­tures, be­cause they do not sincerely re­spect lo­cal cul­tures.

Wuhan had around 127 nat­u­ral lakes in the 1950s. But property de­vel­op­ers and busi­ness own­ers, with govern­ment per­mis­sion, have filled three fourths of them to make land for commercial houses and fac­to­ries over the past half century.

Sta­tis­tics show the num­ber of medium and large cul­tural in­no­va­tion parks in­creased from about 200 in 2002 to more than 10,000 now in China and only 10 per­cent of them can make ends meet.

Most of the parks are used by property de­vel­op­ers to ob­tain land, at the ac­qui­es­cence of gov­ern­ments that are ea­ger to get in­vest­ment to stoke eco­nomic growth, the most im­por­tant fac­tor pro­mot­ing of­fi­cials in the govern­ment sys­tem.

“Af­ter see­ing the so-called new mod­ern life­style and cul­tures brought in by Wanda, most of us re­al­ize that we have lost not only the spe­cial old way of life here in Wuhan along the old road, but also the de­sire and re­spect for any cul­tural project pro­mot­ers, who claim them­selves as cul­tural evan­ge­lists,” said a re­porter with a lo­cal tabloid in Wuhan.

Wanda film park in Wuhan of Hubei prov­ince will open in De­cem­ber.

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