China Shelves Construction of Theme Park

Authorities have suspended work on a Universal Studios theme park as China slows down major building projects in an effort to cool surging economic growth, a city official said Thursday.

Work on an underwater tunnel that would have connected the city with Chongming Island in the Yangtze River and plans to build new subway lines also were postponed, said the official, an executive in the city’s Metropolitan Transportation Policy Office.

Construction of the Shanghai World Financial Center, a 101-story skyscraper slated for completion in 2007, and a horse racetrack planned for Chongming Island were among other projects temporarily shelved, the state-run newspaper 21st Century Business Herald said in an online report Thursday.

It was unclear when, or whether, work on the theme park and other projects might resume.

Wyman Roberts, marketing chief for Universal Parks & Resorts, said Universal had not received any official word from Chinese authorities confirming the report.

“We’re still in active discussions with our partners” on the status of the project, he said.

However, sources close to the studio said it appeared unlikely that the proposed theme park would go ahead.

Executives at General Electric Co., whose NBC unit acquired Universal’s movie studio, theme parks and TV business this year, have expressed reluctance to expand the high-cost and low-margin theme park business in China or elsewhere.

The park’s future has been in doubt since May, when Universal laid off two dozen people hired to work on the amusement park.

The struggling division has been steadily slashing costs and retreating from international growth plans to shore up its bottom line. Universal recently sold its 37% interest in a theme park resort near Barcelona, Spain, for $30 million.

According to the 21st Century Business Herald, land-clearing work for the project already had begun but was later suspended pending final approval from the State Council, China’s Cabinet.

The park, a mix of Hollywood and traditional Chinese themes, was due to open in 2006 in Pudong, a sprawling area of eastern Shanghai.

The park aimed to tap into China’s booming domestic tourism industry by luring visitors from wealthy coastal provinces around the city.

The government has been tightening bank lending and canceling or postponing many projects as it seeks to curb soaring investment that it says is fueling inflation and may cause financial problems.

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Associated Press was used in compiling this report.