Golf in China: Setting the Record Straight
When the Chinese government issued its official paper on golf this January, Asian Golf Industry Federation President Richard Walne immediately called a colleague to discuss what he thought was promising news. His take was contrary to misleading reports from Western media outlets portraying another blow against golf in the world’s most populous nation.
A story from the Associated Press’s Beijing bureau earlier this year stated that China had launched a “renewed crackdown on golf” and closed 111 golf courses. Many interpreted that the Chinese government had just shut down 111 more courses. They failed to note that those closures were part of President Xi Jinping’s anti‑corruption campaign that had occurred over several years.
The confusion appears to trace back to an incomplete translation of an English‑version of a Chinese news outlet, which left out notable information and painted only a partial picture. In turn, some Western media outlets passed along articles that convey confusing and/or misleading statements.
The doom‑and‑gloom situation reported to those outside China isn’t necessarily the case. In fact, industry insiders in China and Southeast Asia provide a much more promising viewpoint, along with clarification, for the report.
“It came across as negative, but I actually thought it was positive,” said Walne, who is also The Toro Company’s Managing Director of the Asia‑Pacific region. “My mind went to the (approximately) 500 courses that are officially legal.”
The report states there were previously 683 golf properties in China. Following a series of closures, the official number of properties provided by the government is 496 (with 569 18-hole courses) that are legal and approved. Approximately 50 of the 496 legal properties haven’t opened for play because they’re still under construction or in the planning stages.
In recent years, operations for a total of 187 existing or pending golf courses and facilities were cancelled or shut down, according to the Chinese government report. Of those, 111 were deemed illegal because local governments gave them prior approval that wasn’t within their jurisdiction, while 11 were closed down by ownership. Another 65 courses were declared illegal in a report published by the central government in March 2015 – 18 of which improperly used ground water, arable land or protected land in nature reserves, while 47 were pending approval and still in the planning stages.
The Chinese government’s official list has some inconsistencies, as NGF research has identified some golf facilities in China that go by several different names and may be counted multiple times. By the NGF’s official count, China is home to 383 golf facilities and 565 courses that are believed to be open and operating.
Definitional issues account for most of the inconsistencies found from source to source, but the NGF and R&A maintain the definitive list of every golf course and facility in the world. Even with the use of satellite imagery, China remains the most difficult market to track among the 208 countries with golf courses.
The Chinese government’s attempt to categorize and produce a list of approved golf clubs is a step in the right direction in terms of quantifying supply of golf in the country. However, due to the sport’s complicated history – one rife with political and cultural implications — China has yet to tackle the demand side and measure how many in a population of 1.39 billion actually play.
“For golf play, there is a great future,” said Qualitas Project Control President Sam Sakocius, a golf course developer who lived and worked in China for a number of years. “It’s going to grow quite a bit and it’s going to grow amongst the elite. Once the government comes in and says golf is okay, then we’ll see steady growth in the golf population.”
Prior to January, there were no official guidelines set forth by the central government on the process to build a golf course in China. The government crackdown in 2015 caused a decline in investment, but now there is more clarity in terms of what’s required to obtain a license to build a course.
“People can get on with things and start investing again,” Walne said. “There was so much uncertainty before about whether or not the central government would change its mind about whether golf courses could be built or not.”
Golf has had a complicated and thorny relationship in China, dating back to 1949 when the Communist Party of China (CCP) under the leadership of Mao Zedong came to power and became the ruling and sole political party, which remains the case today. That same year Mao announced an absolute ban on golf, denouncing it as the “sport of millionaires,” which laid the groundwork for the perception that the game is an elitist pursuit.
Golf’s revival in China began when Hong Kong mogul Henry Fok and iconic star Arnold Palmer teamed up to successfully open Zhongshan Hot Spring Golf Club in China’s Guangdong province in 1984, the first course in the country since the CCP took control. China experienced its first boom in golf course development in the ‘90s.
In 2004, the central government banned the construction of new golf courses, citing the drain on the country’s land and water resources. Experts estimate there were around 200 courses in China at the time. Even with the ban, perhaps no country in the world has built as many courses since.
In a vast nation that has approximately the same land mass as the U.S., Sakocius references an old Chinese proverb to explain the paradox: “The mountains are high and the emperor is far away.”
During the “boom,” courses were built under the guise of luxury real estate development projects to attract wealthy investors or approved as “sports” or “leisure” parks. Local government officials approved of them as they benefited from the revenues of land sales and taxes. Unfortunately, this led to corruption and activities regarded as unethical on the local level, including officials forcing farmers to give up land with little compensation and then selling it to builders to construct luxury developments with golf courses.
When President Xi came to power in 2012, he launched a vigorous anti-corruption campaign that targeted “entertainment” activities (including prostitution, gambling and drugs) that wealthy investors used to endear themselves to local government officials. In the golf industry, wealthy businessmen were known to gift party officials with expensive free memberships to golf clubs.
In 2015, President Xi issued a decree that prevented the Central Communist Party’s 88 million members from using public funds to buy golf club memberships or to accept them as gifts. While not a ban, it severely restricted play – essentially making it taboo for government officials — halted golf course development and caused investors to become wary of backing future projects in China.
“I think a lot of officials who were playing golf are still keeping quite a low profile,” says Allan Zhang, a design associate in one of IMG’s offices in China. “Most of them are trying to stay away from golf.”
There is plenty of potential for growth in China, but a negative perception remains. It’s a somewhat universal construct found in every emerging golf market throughout history — golf starts out as a private and exclusive game that’s predominantly played by the elite before being embraced by the middle class.
“I think there’s a gigantic pent‑up desire to play golf,” Sakocius says. “If they can afford it, everyone loves it. If they started to make it more open to the public and more affordable and built driving ranges and par‑3 courses, it would grow the game and the economy for the future.”
Eric Lynge, the Chief Executive Officer of the AGIF, says golf in China is suffering from a public relations standpoint. “We believe that more consolidated research must be done in Asia to focus on the positives of golf,” he said.
Lynge specifically mentioned the need to acquire data on the economic benefits of golf to local communities through member play and tourism, along with the number of people employed in the golf industry, the amount of charitable dollars driven through golf, among other positives that are directly correlated with the sport and playing it.
Bronze medals won by Shanshan Feng in golf’s return to the Olympics in Rio and by teammates Wu Ashun and Li Hao Tong at the World Cup of Golf may encourage China to put forth the concerted effort it has devoted to winning medals in Olympic medals in sports like gymnastics and diving.
Another intriguing development is that more Chinese golf courses are granting access to juniors.
As part of its 25th anniversary, Mission Hills Golf Club, founded in 1992 and officially the world’s largest golf club with 22 courses spread across its two facilities, has set a goal of welcoming more than 25,000 junior golfers in 2017. Mission Hills has launched a schedule of more than 50 junior golf tournaments, clinics and coaching programs throughout the year, including its Mission Hills Junior Series and par‑three Academy Series. Mission Hills is also providing juniors with free green fees on all its par‑three courses — one in Shenzhen and two at its Haikou resort on Hainan Island.
While golf remains a politically sensitive issue in China, industry insiders remain bullish on its long‑term success. The general consensus for the short‑term, however, is slow and steady growth. The hope is for the demand — the number of golfers — to catch up to the supply of the hundreds of courses.
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