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No obstacles seen as golf gains popularity in China

By Jasmine Yap
Bloomberg News

	GRISCHA RUESCHENDORF / BLOOMBERG NEWS A golfer is watched by his caddy as he prepares to swing on the Savannah Course at the Mission Hills Golf Club in Guangdong province in southern China.
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"This is just the start," says David Chu, developer, owner and chairman of Mission Hills Golf Club in Guangdong, who commissioned Annika Sorenstam, the world's No. 1-ranked woman golfer, to design her first course on his land near Hong Kong. "Golf has more growth potential in China than in any other part of the world."

That's partly because China's economy is growing at an annual rate of 8.5 percent and a rising percentage of China's 1.3 billion people have become smitten with a game that some historians say was first played on Holland's frozen canals in the 13th century.

Today, golf is China's "green opium," says Ye Hong, owner of the Beautiful Pines club in Beijing. Developers already have spent $4 billion during the past 20 years to make China the fifth-biggest golf-playing nation behind the U.S., Japan, Canada and the U.K., says Ramlan Haron, executive director of the Malaysia-based Asia Professional Golfers Association (APGA).

"Everywhere I turn" in China "they are just building golf courses," he says. Last year the U.S. had 16,095 golf courses, the U.K. 2,579 and Japan 2,317, according to the Golf Research Group, a golf business consultant with offices in Dallas and London.

Nike and Adidas, the world's top two sporting-goods makers, are targeting the country's domestic market even as they manufacture clubs in China for export. China is the leading exporter of golf equipment, accounting for $858 million of the $2 billion market last year, Golf Research says.

Chu, a Hong Kong-born businessman, 53, says he plans to make the club the world's biggest by courses — 180 holes on 10 celebrity-designed links. The current leader is 107-year-old Pinehurst in North Carolina, which has eight courses.

He's already more than halfway there. Sorenstam visited China Nov. 2 to check her design, the sixth course for Mission Hills.

"I'm very proud of the course — super condition and a beautiful facility," Sorenstam said in Singapore last week, where she was runner-up to Retief Goosen in the three-man, one-woman Tiger Skins exhibition. "Seems like golf is very popular" in China.

The Mission Hills complexes, dotted with luxury housing, lie between Shenzhen, the industrial boomtown that borders Hong Kong, and its similarly robust neighbor in Guangdong province, Dongguan.

About 100 million people, including 7 million in Hong Kong, live within two hours' drive of Mission Hills, says Chu. Annual membership fees range from $45,000 to $141,000, capped at 1,500 members for each private course.

About 70 percent of China's courses are in high-income areas such as Beijing, Shanghai, Guangdong and Fujian, the province closest to Taiwan, the China Golf Association says. China has 210,000 millionaires in U.S. dollar terms, according Cap Gemini Ernst & Young's 2003 World Wealth Report.

Most developers are from Hong Kong and Taiwan, often in partnership with provincial governments, says the APGA's Haron. "I haven't heard of any courses owned by Americans or Europeans," he says. "It's powered by the local population."

Once viewed as decadent in communist China, golf was seen as a means of attracting foreign investment after former President Deng Xiaoping opened up the country in 1979.

A Hong Kong businessman built the first communist-era course, designed by Arnold Palmer, in 1984 in Guangdong. Soon, Asian businessmen added clubs to amuse their China-based workers. Tourists followed, and more courses.

	PAUL HILTON / BLOOMBERG NEWS Groundskeepers work near a new clubhouse under construction at Mission Hills Golf Club in China's Guangdong province. Golf is so popular in China that one developer calls the sport "green opium."

Yet as late as 2001, the Financial Times reported that some company officials were urging their executives not to play because the game was considered elitist.

The pleas went largely unheeded. At the Beautiful Pines club and driving range in Beijing, local Chinese account for 80 percent of customers, up from 20 percent when it opened three years ago. Even at Chu's exclusive Mission Hills, locals make up 30 percent of members. Hong Kong residents dominate the membership list.

Beautiful Pines owner Ye Hong says locals have taken to the game much faster than she expected.

"Most of the players at our club are successful people," Ye says. "Their purpose is both business and social. It's also a social-status thing."

Zhang Wei, the manager of a building-materials factory in Shenzhen and a Mission Hills member, says a business associate introduced him to golf three years ago.

"I get a lot of business done on the golf course," said Zhang, 43, who had just finished a midweek game. "After all, doing business in China is all about trust and relationships."

Outside China, golf is stagnating. More than 900 courses were built worldwide in 1991-1992, according to Golf Research. Last year, fewer than 300 were built.

As a result, the golf industry is heading to China. Jack Nicklaus, Nick Faldo and Greg Norman have designed courses there.

Arnold Palmer, now designing a course in Beijing, says China reminds him of Japan, where he's built 19 courses. "When the Japanese people turned to golf, they really jumped in," Palmer says. "I wouldn't be surprised if China follows that same trend."

Nike started selling golf clubs only 18 months ago. China, and Asia overall, are important growth areas, wrote Guillermo Salinas, the director of international business for Nike Golf, in an e-mail. "Five or 10 years from now, this region will equal North America from a business perspective."

Herbert Hainer, chief executive of Adidas-Salomon, expects the 2008 Olympics in Beijing, which may include golf, to boost sales there. He says China will be the fastest-growing sports market over the next five to 10 years.

"If you look at the population of China, it's still way below its potential" as a golfing nation, the APGA's Haron said.

Copyright © 2003 The Seattle Times Company