Mickey and Minnie to touch down in China's entertainment capital

After years of rumours, it looks like Disneyland may be on again in Shanghai.

The authorities have confirmed that the previously suspended plan to build a Disneyland theme park in this city has been revived and preparations are going ahead full steam.

Qian Weizhong, director of the economy committee of Nanhui district, said residents had moved off the land targeted for Shanghai Disneyland, in suburban Chuansha town.

The planned theme park will occupy 6 sq km, which is about 4.7 times the size of Hong Kong's Disneyland, according to the original plan.

"Local authorities have received positive feedback from the central government about the Disneyland project," Qian was quoted as saying by the Oriental Outlook.

Zhognnanhai has done some investigation into the report, and has unearthed a couple of interesting findings.

First, it's true that the plan to open a Disneyland is back on. In fact, the plan has always been to open a Disneyland in Shanghai, but those plans were shelved when Chen Liangyu was put under house-arrest and de-throned as the city's communist czar this year.

Disneyland was one of Chen's many projects (which previously included the F1, Tennis Masters Cup, Maglev, among others). To this correspondent's eyes, Chen certainly played a gigantic role in asserting Shanghai as the country's glitzy entertainment capital.

However after his scandalous downfall, nobody wanted to touch a Chen project with a 10-foot pole. But that has changed following the 17th party congress and installation of a new Party Chief for Shanghai (Chen's replacement, Xi Jinping, has taken on a new role on the Politburo Standing Committee).

But what many news items are not mentioning is that Chen's favored location for Disneyland, in Chuansha Town, is no longer favored by the central government. Instead, it's looking at opening the theme park on Congming Island.

Also, as some news items have revealed, an agreement was in place between Shanghai, Hong Kong, and the central government which is still in effect. According to the terms, Shanghai has agreed not to open a Disneyland until after 2010, to provide Hong Kong with ample time to grow its business. In the meantime, Shanghai will focus on its hosting of the 2010 Expo.

It will be interesting to see how this plays out, especially as Congming Island and Chuansha fight it out for the rights to host Disneyland. The economic implications are immense.

And one can not speak of the economic implications without considering Hong Kong. One must assume that Hong Kong, which still requires special permits from mainland residents before entry, will suffer if a Disneyland is opened in Shanghai. According to some reports, the Disneyland in Hong Kong has already struggled, and delayed plans for further expansion as a result.

Regardless, this is good news for Shanghai's tourism sector, and its overall economy.