china Letter from Richard Mandell

There are currently 600 golf courses in China. The word is that there are another 100 under construction and as many as 1,000 in planning.

All this activity seems awfully strange when one recognizes that the Chinese government banned new golf construction on mainland China in 2004. The island of Hainan is the only province where the powers that be have embraced golf construction, and then for tourism purposes only.

During my last trip to China, I learned that the government has shut down all new construction until a full review of all projects is completed. The shut-down started in early May in Yunnan Province and was quickly extended to the rest of the country (other than Hainan Island).

The review comes about from the fact that many courses are being illegally built by utilizing farmland, which is the crux of the government’s stance on golf development. It seems like smart governance to preserve farmland, considering the billions of mouths to feed in China.

This isn't the first time a country-wide shutdown was demanded from Beijing. In fact, it has only been three years since the last review.

No one is too worried this will end golf development in China, though, and most expect construction to resume.

With such a seemingly belligerent attitude toward the golf business by the government, one would think that golf in China may be more of a speculative bubble rather than the promised land for the U.S. golf industry.

The bubble is a very good possibility, because the very great majority of the new projects are in process purely to sell real estate. In fact, the golf industry may end up being collateral damage to a burst of the overall real estate market in China.

Millions and millions of new homes, mostly in the form of high-rise condominiums, are flooding a market where just recently a middle-class (much less a leisure-class) has evolved.

As long as the Chinese begin to build facilities that are accessible and can open up the game to beginners, the industry can thrive. Most people point to the Olympics as a motivating factor for China golf to develop, and I agree. Considering that they don’t have a glut of professional sports to attract athletes, many Chinese look to the Olympics as the holy grail.

Now that golf is part of the equation, it's a good bet that development of the game by the central government on the scale of what South Korea has accomplished will be a motivating factor.

Only time will tell if Chinese golf development matches the growth of its population. If it does, then we'll all be very busy for the next decade, churning out 400 or 500 courses a year. But if the government puts the clamps down to slow development across the spectrum, the bubble may burst.

Richard Mandell, a Pinehurst, North Carolina-based golf designer, was recently named by Golf, Inc. as one of the nation's most influential architects. He organized the initial Symposium on Affordable Golf, which was held last year, and plans to host the second symposium in November 2011, in Southern Pines, North Carolina. His Skydoor Golf Club is currently under construction in the city of Zhangjiajie, in Hunan Province. Because the course isn't being built on farm land, its construction hasn't been affected by the current shut-down.