Tee in China

Beijing worries about ‘green opium’

Tee in China

Round the clock golf: China has a shortage of courses

You can get quarterly GDP statistics, and monthly tallies of electricity output, but there is one Chinese statistic that is much more elusive: how many golf courses are there in the country?

In a report released in April, Globrand, a Chinese marketing website, put the number at 176. Wikipedia reckons there are 376. All that is certain is that Mission Hills in Shenzhen has 12 courses – it is the world’s largest golf resort – and that the nation’s oldest is the Hot Spring Golf Course in Zhongshan (it opened in 1984).

So is the number of golf courses a state secret? Not exactly, but it is a sensitive number. In recent years the government has banned the building of new ones. Perceived to be a rich person’s game, the policy switch was partly a function of the leadership’s new focus on ‘social harmony’. There was also an environmental angle. As everyone knows, golf courses consume a lot of water. So there is little logic in approving new courses in places like Beijing – a city which is now so short of water that it has to be brought in by giant canals from the south.

But perhaps the most important reason was the government’s preoccupation with food security. This March it reaffirmed as sacrosanct that China must maintain at least 1.8 billion mu (1.2 million square kilometres) of farmland. In the early part of this decade, the runaway construction of golf courses was beginning to infringe on the availability of agricultural land. Luxury goods website, quotes the manager of one local golf course as estimating that were it not for the ban, China would have between 5,000 and 10,000 golf courses today.

With an estimated 1 million Chinese players – the sport is locally nicknamed ‘green opium’ – this would seem to portend a mismatch between demand and supply.

John Cappo, IMG’s managing director in China, says that the number of golfers has more than tripled from just 300,000 players five years ago. “The number continues to grow,” says Cappo, who adds: “I was in Beijing recently and there were no tee times available during a weekday at several courses close to the city. All these guys were out there doing deals on the golf course.”

At the more exclusive private clubs, the means of managing the golf course shortage is via ever higher fees. For example, a membership at the exclusive Sheshan International Golf Club in Shanghai is now costing Rmb1.61 million ($235,000).

Sheshan hosts China’s premier golf tournament, the HSBC Champions event. Indeed, in a mark of how seriously golf’s top brass takes the growth of the game in China, the tournament was recently upgraded to a World Golf Championship event, ranking it just below the four majors in terms of prestige. China’s top golfer, Zhang Lianwei greeted the news enthusiastically: “It’s a dream for me that golf has made such progress here in the only the last 25 years. We now have a World Golf Championship event, and in fact it’s not a dream.”

China still lags the US – where 32 million people play the game –but with the sheer size of its population it is hard not to see it one day surpassing the US in terms of total golfers; and perhaps producing a champion of tomorrow.

The Wall Street Journal reports that this process is well underway in Canada, with the Pacific Golf Academy near Vancouver establishing a golf programme for young Chinese players. A dozen young Chinese have signed up for 600 hours of training. One such is Yvonne Zhang, whose mother put her career on hold in Beijing to bring her daughter to the golf school. “In China, golf is only for rich people and there’s no opportunity for regular people to play,” says Zhang’s mother. “We’ll give Yvonne five years to develop her golf game here through her high-school years and see how far she can go.”

China’s golf industry is lobbying the government to lift the ban on new course construction. According to a survey by Professor Han Liebao – of the China Golf Association Ground Management Committee – 80% of the golf courses in China are built on flood land, barren hills, waste land, open forest land or even on sewage ditches or garbage dumps. Only 20% of golf courses have encroached on farmlands or fruit gardens, and they tend to be lower yielding properties anyway.

This, he says, contradicts the widely held idea that farmland is being sacrificed. He also adds that there is an economic benefit to course construction. Each golf course in China employs an average of 250 people. And, adroitly fielding the ‘social harmony’ argument, Han adds that a golf course can also lead to the economic transformation of a poor community.

He cites the case of Daxing Capital Golf Course in Beijing which used to be a deserted brick kiln – and whose villagers made their living by growing corn. The golf course paid the village nearly Rmb10 million as compensation and also provided 140 jobs for local peasants who then saw their income rise more than tenfold to Rmb1,000 yuan per month. Following this,the course launched real estate projects, improving the local economy even further.

Powerful arguments, Professor Han. China’s growing ranks of golfers will hope the government listens.

Keeping track: as long ago as WiC14 (i.e. May, 2009) we reported on the contentious issue of golf course construction. In 2004 the State Council banned the building of new courses due to environmental concerns and the perception golf was a game for just the rich. However, the ban was largely ignored, to the fury of Li Bingji, a deputy to the National People’s Congress, China’s parliament. He told Xinhua that in spite of the ban the number of courses in Beijing has risen fivefold (there are now 100). He said penalties illegally building courses were too low. Last week he proposed penalties be raised substantially (fines are currently 5% of the course’s cost). He suggested too illegal courses should be demolished. (Mar 16, 2012)

© ChinTell Ltd. All rights reserved.

Sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.