china It's All About the Benjamins

So much about China fascinates us -- its size, its wealth, its industrial ambitions, its development potential, and, most certainly, its appetite for golf.

Several of these attractions come together in a short but very sweet new report on golf in China by Darius M. Hatami, the president of Boulder, Colorado-based HVS Golf Services. In "Unraveling the Chinese Golf Markets," Hatami breaks down the nation's fast-growing golf business and provides some insights into where it's headed. In a nutshell, he believes that golf in China "is driven by the newly rich," is poised to accept "alternative golf concepts," and "promises significant growth opportunities."

Here are a few noteworthy conclusions from his study:

-- Like many observers, Hatami estimates that China currently has between 200 and 300 golf courses, most of them in big cities, where wealth is concentrated. Roughly a third of the existing courses are located in and around Beijing and Shanghai, while another third are in Guangdong province. The remainder, says Hatami, are scattered around the rest of the country, mostly in coastal areas.

-- As we've heard before, golf in China is sometimes called "green opium," a testament to its addictive nature. The addiction was sparked by the SARS epidemic in 2003, Hatami says, which drove people to golf courses, where they could find abundant fresh air. Today the sport is fast becoming popular among people of all income levels, but Hatami says its future "is inevitably linked to the growth in China's upper class and the accumulation of wealth."

-- If golf is a rich man's game in China today, the evidence suggests that it will remain so in the future. Partly because rounds of golf and club memberships are so expensive, Hatami concludes that "the prerequisites for the growth of affordable golf in China are not in place." He suggests that people with limited incomes will play mostly at driving ranges and practice centers, while the rich will join pricey private clubs.

"Golf in China is primarily accessible only to the elite in China," Hatami writes. "While the middle class holds the potential for growth, the affordability of the game remains a significant challenge."

-- Over the next five years, Hatami estimates that China can accommodate the construction of 18 to 58 new golf courses a year. "While the prospects for growth in golf courses is significant," he believes, "it is dependent on the continued creation of wealth in China. The ultimate driver of golfer as well as golf course development will lie in the ability of China to maintain its dynamic growth in wealth."

The study has been posted at HVS.com.