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It seems simple enough. As their wallets start to bulge more and more, the 1.3 billion Chinese need a place to go for entertainment a theme park.

That goes some way to explaining the current investment craze in hundreds of themed amusement parks across the country.

According to the International Association of Amusement Parks and Attractions (IAAPA), a new wave of investments in China's theme parks is on the way, as the following five years are expected to be rosy for China's amusement parks and attractions industry.

There are now at least 2,000 theme parks in China, although the industry only started about 20 years ago. Most such parks were co-invested by the government and private sectors and were built up in economically developed regions such as Beijing, Tianjin, the Yangtze River Delta and the Pearl River Delta.

Domestic investors are planning a number of new parks in the country. For example, the historic town of Zhouzhuang on the outskirts of Shanghai is planning a US$40-million park with 5,000 years of Chinese culture as its theme. Construction is scheduled to begin at the end of 2006 and is expected to take at least one year.

Meanwhile, the central government has mapped out a plan to spend heavily in the Shenzhen area to improve the existing parks so that they complement nearby Hong Kong Disneyland. The government hopes to market the region as a destination called the "Golden Coast," which would feature hotels and activities to keep visitors entertained for several days.

Foreign investors are also vying to inject billions of dollars into building up new theme parks across the country.

A joint venture between Shenzhen Sanguo Culture City Industrial Development Co Ltd and Canada-based Bedford International Financial Group is planning a US$3-billion park called China Today on Shenzhen's eastern shore, to be based on the legend of the third-century Three Kingdoms. The park is expected to open in 2010.

US-based Walt Disney is negotiating with Shanghai's municipal government to build a theme park in the city's Nanhui District, to open in 2010, coinciding with the city's World Expo 2010. Shanghai's Jinjiang Park is also talking with US company Triple Five about a project to expand and reinvent the park, according to IAAPA officials.

At the opening of the IAAPA Asian Expo 2006 held in Shanghai recently, IAAPA President and Chief Executive Officer Charlie Bray said the "explosive" development of China's theme parks has seen the country emerge as a driver for the Asia-Pacific region, which is set to enjoy the fastest growth of this industry in the coming five to 10 years.

"The Asia-Pacific is clearly an emerging market for the amusement park and attractions industry. I think the future growth of the region will largely depend on China and India," he said.

According to a PricewaterhouseCoopers report, "Global Entertainment and Media Outlook," revenue generated from theme parks on mainland China is expected to grow 7.1 percent annually to reach US$1.8 billion in 2010, up from US$1.3 billion last year.

The performance in Hong Kong is even better, with the opening of Disneyland Hong Kong in 2005 and the redevelopment of its Ocean Park. It expects an annual growth of 21.8 percent to reach US$362 million in 2010 from US$135 million in 2005.

Meanwhile, the Asia-Pacific region is expected to generate an average annual revenue growth of 5.9 percent to reach a total income of US$8.2 billion by 2010.

Attendance at Asia's theme parks is expected to hit 278 million in 2010, up from 234 million last year, equalling an increase of 18.8 percent.

However, the report also pointed out that investments in many theme parks in the country are not successful. The poor performance of these parks was attributed to a lack of major reinvestments.

According to Liu Jingwang, deputy executive president of the China Association of Amusement Parks and Attractions, China's amusement parks and attractions industry is already plagued by repetitive investments from local governments.

"If you go to any medium-sized and large-sized cities, you will find a theme park that is built up or under construction. I am kind of worried what do we do with so many amusement parks?"

Local governments should therefore carefully evaluate the market and control the scale of investment to avoid huge losses incurred by insufficient demand, he said.

(China Daily July 25, 2006)