China approves Disney theme park in Shanghai

After a decade-long courtship, the Walt Disney Co. has won approval from the central government of China to build a Disneyland-style theme park in Shanghai, a landmark deal that carries enormous cultural and financial implications, Roger A. Iger, Disney’s chief executive, said Tuesday.

The agreement for a Shanghai Disneyland was announced late Tuesday. Analysts estimate the initial park – not including hotels and resortinfrastructure – will cost $3.5 billion, making it one of the largest-ever foreign investments in China.

The initial resort, with a mix of shopping areas, hotels and a Magic Kingdom-style theme park, will sprawl across 1,000 acres of the city’s Pudong district – with the theme park occupying about 100 of those acres. It would be a little bigger than Disneyland inAnaheim, Calif., and on par with the parks in Paris and Tokyo. It is expected to open in five or six years.

Disney’s plans are ambitious: If further development of the resort happens as expected over the coming decades – still a big if – it will encompass more than 1,700 acres and have a capacity rivaling Disney World in Florida, which attracts about 45 million annual visitors.

The company’s goal is to create an engine that will drive demand among China’s 1.3 billion residents for other Disney products, from video games to Broadway-style shows to DVDs. Disney typically relies on the creation of new Disney TV channels to pump its brand abroad, but China’s limits on foreign media have made that impossible. The approval, notably, did not come with concessions from China on the television front.

Iger called the approval "a very significant milestone" in a statement, taking care to praise China as "one of the most dynamic, exciting and important countries in the world." A spokeswoman declined to elaborate on details.

Throwing open its doors to such a uniquely American – and permanent – entertainment experience is a milestone for China, which has aggressively protected its culture from Westernization in general and Hollywood in particular. Only 20 non-Chinese films are allowed to be shown in theaters each year, for instance, and those are often edited.

"Disney, perhaps the most iconic American brand of all, is supercharged in this department," said Orville Schell, director of the Asia Society’s Center on U.S.-China Relations.

It was unclear what convinced China to finally approve the deal after years of off-again, on-again talks. The prospect of creating jobs – tens of thousands between building the resort and operating it – at a tough economic moment might have played a role, Schell and other analysts said.

Others have speculated that the timing involves President Barack Obama’s inaugural visit to China later this month.

Schell said he saw something more at work. "It’s a signal that now they will tolerate a certain kind of Western investment," he said.

Disney will own about 40 percent of the Shanghai resort, with the remainder owned by a holding company formed by a consortium of Chinese companies selected by the government, according to people with knowledge of the plan but who were not authorized to speak publicly.