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Hong Kong never secured exclusive promise from Disney

mkt

When a paradise is lost go straight to Disney™
Premium Member
Original Poster
Hong Kong never secured exclusive promise from Disney
July 29, 2002

HONG KONG (Reuters) -- Hong Kong never secured a committment from The Walt Disney Company that it would not build another theme park in China, a senior government official said on Monday.

"The exclusivity agreement could only be reached with consent of both parties and both agreed there would not be such a provision," Stephen Ip, secretary for economic development and labour, told legislators.

Ip said Disney had always held the view that it wanted more than one park in China, while Hong Kong wanted the freedom to have other theme parks in the territory.

Ip's disclosure could unleash more criticism against the Hong Kong government after some local newspapers reported recently that Disney had signed a letter of intent to build its third Asian theme park in rival Shanghai.

Disney is already building a theme park in Hong Kong and many in the territory fear the US$1.8 billion facility will face too much competition after it is ready in early 2006.

Hong Kong is banking on the park to inject some life into its sagging economy and lure more tourists.

The government pledged a whopping HK$22.45 billion (US$2.9 billion) in 1999 for the park and accompanying infrastructure while Disney is investing just HK$2.45 billion -- a disparity which critics say makes the deal too lopsided.

However, Ip sought to calm those fears, saying Disney would not do anything to jeopardise the Hong Kong park.

"Disney is our partner, it is investing in this and it has to mind its own reputation. If it opens up too many theme parks and causes losses for Hong Kong, it is not advantageous to its own reputation, not to mention the making of any profits," he said.

Hong Kong, which is struggling to emerge from its second recession in four years, is hoping its Disney park will draw visitors from mainland China and create thousands of new jobs both at the park and in related tourism sectors such as hotel and retail operations.

Over the weekend, Hong Kong's tourism and hotel sectors urged the local government to discuss their concerns with leaders in Beijing and to ask Shanghai not to build the Disney park too soon.

07/29/02 02:55 ET
 

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