The National Development and Reform Commission (NDRC) has granted approval to the Walt Disney Corporation, in cooperation with a state-owned company under the administration of the Shanghai municipal government, to build a Disneyland theme park in Shanghai.

Analysts estimate the initial initial stage of the park, which does not include additional hotel and resort infrastructure, will cost 3.5 billion US dollars. According to the New York Times, this would make the Disney deal one of the largest-ever foreign investments in China and in of excess the 3.45 billion US dollars being ploughed into the Shanghai World Expo.

A statement released by Robert A. Iger, president and CEO of The Walt Disney Corporation, acknowledged the importance of the approval, "China is one of the most dynamic, exciting and important countries in the world, and this approval marks a very significant milestone for The Walt Disney Company in mainland China"

The Shanghai Disneyland will be the fourth Disney theme park outside of the United States. Similar to the Hong Kong Disneyland that was opened in 2005, the company that will manage the Shanghai park will be 57 percent controlled by a state-owned company under the administration of the Shanghai municipal government, with Disney holding the remaining 43 percent share.

The Company decided on Shanghai because of its vast transportation network and because about 300 million potential customers live within two hours of the site, located between the city's airport and downtown.

Initial plans include a mix of shopping areas, hotels, and a Magic Kingdom-style theme park with distinct Shanghai characteristics filling the 1,000 acre lot that's been set aside by the city's Pudong District. However the theme park would only occupy about 100 of those acres. The park is expected to open in five or six years.

This new park would compete directly with Hong Kong Disneyland, which has underperformed since its opening four years ago.

According to China Market Research's Rein, the Shanghai theme park will attract mainland Chinese who find it difficult to visit the Hong Kong park.

The approval marks the culmination of former Chinese premier Zhu Rongji's dream of having a Disneyland in his city after his July 1990 visit, as mayor of Shanghai, to the original Disneyland in Los Angles.

Links and Sources
Shanghai.gov.cn: Announcement (Chinese)
Disney: Offical Press Release (English)