Minnie and Mickey Mouse in traditional Chinese costumes are all smiles at a ceremony marking the start of construction of the Shanghai Disney Resort project on Friday. [Photo / Xinhua]

SHANGHAI - Construction of the long-awaited Shanghai Disneyland theme park started on Friday, injecting new momentum into China's biggest city economy.

The move comes as the eastern financial hub's economic growth has lagged the national average in the past three years and the project is poised to give the development of the city's service industry a shot in the arm, experts said.

In a ceremony at the future site of the theme park, Shanghai's Communist Party Secretary Yu Zhengsheng and Walt Disney Co's President and CEO Robert Iger announced the start of the construction, marking the culmination of prolonged negotiations that started in the late 1990s.

"Disney is the world's classic urban tourism product its launch in Shanghai will help raise the development of tourism, culture and creative industries to Shanghai and even the Yangtze River Delta to a higher level," said Shanghai's mayor Han Zheng in a speech during the ceremony in the city's Pudong New Area.

The ceremony began with traditional Chinese drumming, followed by a performance by a Chinese children's choir accompanied by 20 Disney characters, including Mickey Mouse, Donald Duck, Snow White and the Seven Dwarves - all dressed in traditional Chinese costumes.

The theme park, Walt Disney's first on the Chinese mainland and sixth worldwide, will have an initial investment of 24.5 billion yuan ($3.7 billion).

An additional 4.5 billion yuan will be used to build two hotels with 1,220 rooms and retail, dining and entertainment facilities.

A lake, outdoor recreational facilities and parking and transportation hubs will also be built in the Shanghai Disney Resort covering around 3.9 sq km in the city's eastern suburb.

Financing will consist of 70 percent equity and 30 percent debt.

Three joint ventures - two owner companies and a management company - have been set up between Walt Disney and Shanghai Shendi Group Co, a wholly government-owned joint venture specifically created last year for the development of the Shanghai Disney Resort.

Shendi holds a 57-percent controlling stake in the two holding companies, and a 30-percent minority stake in the management company.

Related readings:  Shanghai Disney first phase to start in June  Disney plans Chinese stores by mid-2012  Disney reports increase in earnings  Disney boost for Chinese cartoon company

Investment and profit will be split between Shendi and Walt Disney in proportion to their stakes in the owner companies.

After its opening in about five years, the Shanghai Disney Resort will attract 7.3 million visitors annually, the government said.

Iger, who was appointed as Disney's chief in 2005, also gave some hints about what attractions the Shanghai location would feature that separate it from the other five, most prominently the Storybook Castle.

"Visitors will say 'wow look at that big castle' when they first see it," said Iger of the Storybook Castle, the largest among the six parks.

In addition, the traditional Main Street entrance leading to the castle will be replaced with a large green space, Iger said.

"It will spur the development of Shanghai's tourism-related industries, create jobs and help train talent. The park will serve as one of the drivers of Shanghai's economic growth," said Liu Zhengyi, deputy head of the Administrative Commission of Shanghai International Tourism and Resorts Zone.

Xia Lingen, a tourism department professor with Fudan University in Shanghai, told local media that the launch will raise the proportion of tourism in the city economy by up to 2 percentage points.

 

An artist's rendering depicts the proposed Shanghai Disney Resort. [Photo/Agencies]