Shanghai, Hong Kong Battle For Disney Park

HONG KONG - American children often beg their parents to bring them to Disneyland. Developers hope more Asian children will do the same - as both Hong Kong and Shanghai vie to become the next Asian city with a Disney theme park.

Hong Kong is in talks with Walt Disney Co. about building a park. In Shanghai, which hopes someday to unseat Hong Kong as China's financial center, the mayor is clamoring for a Disney park.

The race underscores a long-standing rivalry between the two cities. Although it remains unclear whether Disney is taking a serious look at Shanghai, Mayor Xu Kuangdi has some powerful allies in Beijing, which can't hurt.

Top Chinese leaders from Premier Zhu Rongji down are pushing Disney to choose Shanghai and build a smaller park in Hong Kong, according to a source familiar with Disney's China operations.

Although Zhu called on Disney Chairman Michael Eisner during his recent tour of the United States, it's unclear whether they talked about Shanghai or Hong Kong or both.

For China, engaging Disney marks a dramatic change from just three years ago, when officials threatened to rein in its business over a film about the Dalai Lama, the exiled Tibetan spiritual leader.

Eisner clearly has his eyes on China, where he has predicted millions of people will "love Mickey no less than Big Mac."

Analysts warn that it will take more than just fans for any Disney park to succeed. The fans also have to be able to pay.

"You're talking about trying to attract fairly poor people to an expensive place," said Andy Xie, an economist with Morgan Stanley in Hong Kong.

Xie estimates a mainland Chinese family of three would have to spend about $700 - half a respectable yearly salary - for a quick visit to a Hong Kong Disneyland. Incomes in Hong Kong, a prosperous former British colony, are higher.

Although Shanghai boosters say a park there could lure 9 million visitors a year, and Hong Kong talks about 5 million, Disney will focus on the right mix of financing, available land and government approval, said Christopher Dixon, New York-based entertainment analyst for PaineWebber.

"There's no question that if they build a theme park, people will come," Dixon said. The trick is to make money, too.

Disney spokesman John Dreyer wouldn't rule out a Shanghai Disneyland. "There's no reason why we can't have a park in Shanghai as well as Hong Kong," Dreyer said.

Hong Kong officials refuse to discuss Shanghai's intentions, though they hope to have their own Disney deal in hand by June, a prospect that has become the talk of the town as Hong Kong struggles through recession.

But given the choice of Hong Kong and Shanghai, many analysts say Hong Kong's better infrastructure, communications and skilled workers make it a better choice.