China Curbs Theme Park Projects

Wall Street Journal: China has suspended the construction of large theme parks to clamp down on local government spending and rein in unauthorized real-estate development.

The country's top economic planning agency has halted the construction of locally approved parks planned to be larger than 20 hectares or that have a total investment of more than 500 million yuan (US$78 million), according to a directive seen Tuesday.

"Since 2004, the State Council [China's cabinet] has clearly ruled that it must approve construction of large-scale theme parks. But in recent years local governments have approved large parks on their own," the National Development and Reform Commission said in the directive.

The suspension took effect Aug. 5 and covers projects already approved but for which construction hasn't yet begun. It will remain in place until the introduction of new regulations for the sector, the directive said.

The suspension comes as Beijing is under growing pressure to clean up the huge amount of debt that local governments have accumulated through infrastructure projects since it launched massive fiscal stimulus in 2008 to combat the global financial crisis.

China's national audit office has estimated that local government debt totaled 10.7 trillion yuan at the end of December, equivalent to 27% of the country's 2010 gross domestic product. It is unclear how much of that debt is at risk of going bad.

The Ministry of Finance on Monday said any risks from local debt are generally controllable, but conceded that some authorities have a weaker capacity to repay their debt.

The planning agency also appears to be taking aim at theme parks that have been quietly turned into property projects by local developers.

"Some companies have undertaken property development projects under the name of developing theme parks," it said.

China has been trying to rein in property prices, which have been spiraling out of reach of many of China's 1.3 billion people, spurring criticism of the government.

China's Counterfeit World of Warcraft Theme Park

Consumerist: The Chinese may have been the first to invent gunpowder and delicious pork-filled fried dumplings, but they have not caught up to the rest of the world when it comes to respecting intellectual property rights. Case in point, the recent opening of an entire themepark dedicated to World of Warcraft and Starcraft, two of the most popular online games in the world, in the Changzhou, Jiangsu province. It's a sprawling $30 million megaplex spanning 600,000 square meters that aspires to compete with Disney and Universal Studios as a global theme park destination. And it's a total knockoff. They didn't pay Blizzard, the company behind those two games, a dime.

The folks over at Shanghaist visited the park and took lots of pictures and detailed the experience. The place is massive. There are statues all over the place taller than a grown man with characters from the two video games. The funniest part is how even though they stole all the details and characters from the games, they know they can't go all out and call it "World of Warcraft Land" (although from the initial schematics that surfaced online a few months ago made it look like that was basically their original intention). They have to come up with their own phraseology. So Warcraft World is called "The Terrain of Magic." The Starcraft ripoff zone is called "Universe of Starship." The entire park is called "World Joyland."

Ripping off Apple stores wholesale is one thing, but it really takes gumption to steal an entire themepark.

China Claims Place at Paris Air Show

China's Passenger Jet C919

AFP: China aims to claim its rightful place at the Paris International Airshow this week alongside giants Airbus and Boeing, laying down a marker for its ambitions to be a major player in global aviation.

Airbus and Boeing dominate the hugely important Chinese market but Beijing has long made clear its intentions to make its own aircraft, moving swiftly up the technological ladder, just as it has in so many other products. Its immediate target is the medium-haul segment, carved up between Airbus with its A320 twin-engined series and Boeing's similar 737, the largest selling commercial aircraft since its launch in 1967 and a mainstay in Chinese skies.

Commercial Aircraft Corp of China (Comac) makes its first appearance at the Le Bourget airshow next week just north of Paris, with a mock-up of the cockpit and part of the fuselage of its C919 model. Currently under development, the 190-seat C919 is due to enter service in 2016, just after Airbus brings its upgraded and already much sought after A320neo to the market, raising the question of whether China's first commercial jet can make inroads against such tough opposition.

For the moment, Comac has won orders for some 100 C919s from Chinese airlines but has found only one foreign customer - the leasing arm of US conglomerate General Electric. The company is clearly hoping for more by setting up its stall at Le Bourget, analysts say.

"They want to talk to companies and to bring them up to date with how the (C919) project is going," said Christophe Menard, aerospace analyst with Kepler.

"There are discussions underway with a number of Western aviation companies," said Jean-Paul Ebanga, head of CFM International, the Franco-American firm supplying engines for the C919.

For the airlines to take the C919 seriously, there are the key issues of its airworthiness certification, its performance and delivery date to be resolved. To ensure it can bring the C919 to market successfully, Comac, part of the giant China Aviation Industry Corp (Avic), has joined up with several major Western groups -- CFMI for the engines, France's Michelin for tyres and Safran for the cabling of the aircraft.

"We have settled on a timetable and things are moving on. We have no reason to question the rationale of the programme," CFMI head Ebanga said.

For Menard, Comac's tie-ups with the Western companies are clearly intended to "bolster the credibility of the project" and reflect a simple truth -- if it is to stand any chance against Airbus and Boeing, it needs foreign help.

In March, the company announced another tie-up, this time with Canada's Bombardier which is also trying to break into the medium-haul market based on its experience in smaller passenger jets. "In terms of the airframe (fuselage and wings), Comac should benefit from Bombardier's experience," Menard said.

The accord with Bombardier will no doubt "help accelerate" the C919 project but for Airbus and Boeing, Comac still presents no immediate threat, he said.

"For them, it is a competitor but the threat is not for right now but for the medium-term, looking ahead to around 2020," Menard said.

At the same time, Comac will be just one of several likely new entrants to the highly competitive market, with Bombardier and Brazil's Embraer making great strides. "There will be other aviation companies, Chinese, Russian," Fabrice Bregier, the Airbus number two, said recently.

Airbus and Boeing will have to face a number of new competitors by 2030 and they will have to prepare for that, making sure that they "anticipate developments and invest in new technologies," Bregier said.