Universal Studios Considers China Site

Universal Studios Inc. on Monday confirmed it is studying whether to build a theme park at a third potential site in China, this one in the southern city of Shen-zhen.

Universal said in October that it signed agreements with Chinese officials to launch feasibility studies for potential parks in Beijing and Shanghai.

None of the three studies guarantees that any park will be built, Universal said, but are simply the first step needed to allow the company to scout locations and evaluate the financial prospects of each area.

A Shenzhen park would be close to Hong Kong, where Walt Disney Co. plans to open a theme park in 2005.

Zhang Yuhua, a marketing executive with the Shenzhen Tourism Bureau, was quoted by the Associated Press as saying that Shenzhen officials have held talks with Universal Studios for nearly one year and that Shenzhen “attaches a lot of importance to this project.”

But Universal spokesman Jim Yeager downplayed the discussions.

“We have conversations with people all over the world. We are always exploring new business opportunities,” Yeager said.

Universal has said it wants to aggressively expand internationally with as many as five new theme parks. Universal’s theme parks were acquired one year ago by France’s Vivendi, now called Vivendi Universal, when it bought Seagram Co. for about $30 billion.

Entertainment and theme park executives have long been enticed by the business opportunities China’s 1.3 billion people present, but also have been cautious because of bureaucratic, political and infrastructure hurdles in the Communist country.

Michael Demetrios, chief executive of Los Angeles-based Intra-Asia Entertainment Corp., which is involved in the development of theme parks in China, said that anyone wanting to build there must thoroughly study a host of issues that includes ticket pricing, purchasing power in the area and accessibility.

“The biggest problem in China is the transportation,” Demetrios said.

Disney spent nearly a decade studying China as a potential location before announcing in 1999 a $3.5-billion venture with Hong Kong’s regional government. And other China theme park efforts have struggled, notably the American Dream Park near Shanghai that was partly backed by U.S. investors.

“I don’t think China is a sure thing for Universal,” said Tim O’Brien, senior editor with Amusement Business in Nashville, which tracks the industry.