Theme Park Development Seen as Too Much of a Wild Ride

*NDRC says industry suffers from host of development problems including debt risks, "copycatting"
*State planner creates definition for "mega theme parks" in effort to curtail construction and expansion

China’s top economic planner is looking to rein in the booming theme-park industry, which it says is already suffering from problems that include “local debt risks,” “aimless construction” and “copycatting.”

The National Development and Reform Commission (NDRC) said in a document (link in Chinese) on Monday that it wants to “limit the construction or extension of mega theme parks,” hinting at another crackdown aimed at getting a handle on local debt.

The NDRC has for the first time defined “mega theme parks” — those with an area of at least 330 acres and an investment of $794 million. Any project of that size requires the go-ahead of the powerful ministry-level NDRC. Others need only to approach provincial-level authorities.

The rules come at a time when the heated market has encouraged park developers, both home and abroad, to launch projects. The NDRC encouraged the operators to “tell Chinese stories, inherit and pass on good Chinese cultural genes,” and avoid “unclear concepts, aimless construction and copycatting.”

China is expected to surpass the U.S. as the world’s largest theme-park market by 2020, receiving an estimated 221 million people a year, according to U.S. consulting firm AECOM.

There are already 2,100 theme parks across the country, and three out of the top 10 theme parks worldwide in 2016 were in China, according to Dai Bin and Zhan Dongmei, analysts from the China Tourism Academy.

Given this market potential, both foreign and domestic park operators, including Universal Studios, Six Flags, Wanda Group and Happy Valley, are planning new projects in the country.

In the document, the NDRC also said it will control residential and commercial property development around theme parks in an effort to prevent property bubbles.

It has been another attempt from the state planner to control local debt risks. Caixin reported in March that the NDRC will raise the revenue requirements local governments must meet before building rail systems, after subway projects in Hohhot and Baotou, both in the Inner Mongolia autonomous region, were called off last year.

Contact reporter Coco Feng (renkefeng@caixin.com)