Ryan Pyle Blog: New Work – Golf on Hainan Island

Hello,

I recently completed a story for the Financial Times Magazine on a secretive golf course on China’s Hainan Island. The island is developing at hyper speed and government officials are touting the island as a future competitor to Hawaii. Five star hotels and international quality golf courses can be found just about everywhere on Hainan Island.

Dan Washburn wrote a wonderful story and he has been knee deep in golf stories over the last few years. He is even preparing a book on golf and golf development in China. Follow the link below for the story.

FT LINK: Click Here

Article Below:
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Copywrite: Dan Washburn

Golf’s secret boom in Hainan, China
By Dan Washburn

If you are flying into Haikou from the west, you can see it. Sit on the right-hand side of the aircraft and look out of your window. It’s there. Viewed from above, this vast swathe of land may not look like much – fuzzy green vegetation, shadowy pockets of volcanic rock, incongruous veins of reddish brown soil – but in a couple of years it will make history. Locals refer to this area by its code name: Project 791. Soon, most people will know it as Mission Hills Hainan, the largest collection of golf courses in the world.

The scope of the multi-billion-dollar project is staggering. It occupies 80sq km of forest and shrubland – an area the size of Hong Kong island – in north-east Hainan, the island province long touted as China’s answer to Hawaii. Once completed, it will feature 22 golf courses, at a stroke doubling the number on Hainan today. It’s been in the works since 2006 and for more than two years, thousands of workers have been clearing trees, moving soil, building greens, fairways, clubhouses and luxury hotels.

And yet aspects of the project remain as mysterious as the island on which it sits. In fact, the man most closely connected to the Mission Hills venture in Hainan denies its very existence.

When I first met Ken Chu, vice-chairman of Mission Hills Group and one of the most powerful men in China’s burgeoning golf industry, I was wearing yellow plastic bags over my shoes. Our interview was to take place in an $11m villa, one of the many that line the fairways at Mission Hills Golf Club in Shenzhen, the Chinese business hub north of Hong Kong. I was told that everyone who entered the show home must don the protective shoe coverings. Shuffling past a white grand piano I took a seat in a living room whose styling might best be described as neo-Liberace. When Chu arrived, the first thing I noticed was his shoes – stylish, black, leather and uncovered. I stood up to greet the 35-year-old mogul and cheap plastic crackled beneath my feet.

For now, Mission Hills Shenzhen touts itself as the “World’s No. 1”, and Guinness World Records plays along, labelling the 20sq km, 12-course golf club the largest on the planet, even though Nanshan International Golf Club in north-eastern China has 63 more holes. Opened in 1994 by Chu’s billionaire father, Hong Kong businessman David Chu, this is golf on steroids. Each of the 12 courses was designed by one of the biggest names in the sport, from Faldo to Nicklaus to Norman. Mission Hills Shenzhen also features the world’s largest clubhouse, Asia’s largest spa and, for good measure, the continent’s largest tennis centre.

Towards the end of our meeting, I brought up Hainan. I asked Chu how many courses Mission Hills had planned there. It was the first time I saw him flustered. “We, um, it’s not so much on the course development,” he stumbled. “Actually, we haven’t even started. We haven’t even talked about this project. It’s something in the pipeline, in discussion, but it’s not purely on golf. It’s a tourist destination.”

“So, it’s just too early to say anything?” I asked. “Maybe at this stage,” Chu said, “because there’s nothing to talk about.”

This was in July last year. When I travelled to Hainan in August, I discovered that not only was there something worth talking about, but a large part of the project was nearing completion. Six golf courses had been shaped and seeded. Three more – including the showpiece “tournament course” – were even further along. They looked perfectly playable, lush and green, with local women in rattan hats the shape of Tiffany lampshades putting the finishing touches to the white-sand bunkers.

The tournament course is stunning. With its irregular lines and eroded sand traps, it manages to appear rugged and natural, even though there is little natural about it. Incorporated into the design are old, overgrown lava-rock walls and archways left over from the land’s previous occupants, along with some mature lychee, ficus and acacia trees that managed to elude the clear-cutter. The result is a landscape that looks like it has been there for decades, maybe centuries, not months. A drive along the cart path, made from crushed lava rock, has the flavour of a Jurassic safari – that is, until you see the massive hotel and clubhouse looming on the horizon.

It is all remarkably telegenic, and by design. The talk is that in 2011 the Mission Hills Hainan tournament course will become the new location for either golf’s Omega-sponsored World Cup, currently a fixture at Mission Hills Shenzhen, or of the HSBC Champions, the tournament dubbed “Asia’s Major”. That event, with $7m in prize money, draws some of the biggest names in the sport and has been held in Shanghai since its launch in 2005. Professional Golf Association representatives, I was told, have toured Mission Hills Hainan. And Ken Chu flies in every two weeks to monitor progress on the project.

The moans of bullfrogs emanating from the marshland along the 18th fairway are replaced by the ping ping of hammers hitting metal. Chain-smoking labourers, skin brown and weathered by the tropical sun, plug away at the two dramatic structures that form the backdrop to the course’s closing hole. Fashioned in Mediterranean Revival style, they are white with red and black tile roofs.

In reality, this will be the world’s only self-contained golf city. Its 22 courses will cover every style imaginable – from links to desert to Augusta-like perfection – and include some decidedly non-traditional designs. Picture yourself playing into a waterfall, through a cave, around a volcano, or over a replica of the Great Wall. There will be multiple town centres with luxury homes and apartments, hotels and spas, shopping malls and streets lined with restaurants and bars. The Chus are turning countryside into suburbia, no doubt raising surrounding property values and creating thousands of jobs along the way.

But why the reticence when I inquired about the Hainan development? Why does a golf project require a code name? There is a one-word answer to such questions: China. The country’s latest moratorium on golf course construction was brought in more than five years ago, and is still technically in place. In China, golf remains a prohibitively expensive, elitist pursuit – inescapably linked to corruption in the minds of many – and, some believe, its expansion runs counter to several of President Hu Jintao’s primary concerns: among them the environment, the plight of farmers and the widening gap between rich and poor. A project that absorbs 20 million acres of open land and directly affects the lives of tens of thousands of poor rural families is bound to create controversy. For Mission Hills, for now, the less fanfare the better.

Given all that, how could such an audacious project get the go-ahead? Why would someone even consider trying to open a golf club nearly one-and-a-half times the size of Manhattan? And how could construction go virtually unnoticed and unreported for more than a year? There’s an answer to these questions, too, and it is also China. In the years since the government announced its supposed golf course moratorium, the number of courses has nearly trebled to an estimated 600 or so. In China, there is always a way.

And that is especially true in Hainan, where golf is now viewed as a vital part of the province’s development. When modern China’s first golf course opened in 1984, Hainan was four years away from becoming a fully-fledged province, and most mainland Chinese still regarded it with equal parts curiosity and fear. Despite its proximity to the mainland – Haikou, Hainan’s capital, lies just 30km from the southern tip of Guangdong province – for centuries it had been characterised as a typhoon-prone outpost inhabited by mysterious natives, ruthless pirates, banished criminals and exiled officials. Indeed, prior to his expulsion to Hainan in 848, disgraced Tang Dynasty chief minister Li Deyu famously wrote that he was being sent to the “gate of hell”.

The reputation stuck. One Hainan local said that when he arrived on the mainland in the 1980s to attend university, his fellow students were surprised to discover he didn’t have a tail. But it was also during this decade of reform that top-ranking officials began referring to Hainan as China’s “treasure island”, both for its rich natural resources and its sun-blessed, palm-lined beaches. Though poor, backward and corrupt, Hainan had potential, but it seemed no one could agree for what.

As China’s middle class continued to grow, its appeal as a tourist destination came to the fore. And last year, after decades of false starts, the provincial government announced plans to make tourism the “pillar” of the local economy, to rival destinations such as Phuket and Bali. Golf, once banned by the communists as bourgeois, is expected to play a big role in this repositioning. At last count, Hainan – slightly bigger than Belgium – had 22 courses, although many people believe it could easily reach 100 within five years.

While a negligible percentage of the population plays golf, China is one of the few places in the world where golf course construction is booming. “Everyone who is even thinking about golf course design is here in China,” said Haikou-based Richard Mon, vice-president of China operations for Schmidt-Curley Golf Design, the US company behind all 34 of Mission Hills’ China courses. “If you’re not, you don’t have any work. Everywhere else in the world is done.” Golf in modern China is in its infancy – the game here is still four years younger than Sergio Garcia – and the speed of its growth will no doubt be accelerated by its inclusion in the 2016 Olympics, a move that should give the sport some legitimacy in the eyes of the once-sceptical Chinese government.

What’s less certain, though, is whether the provision of 100 golf courses – let alone the 200 to 300 touted by one provincial official – makes sense on Hainan, an island with 8.5 million predominately rural inhabitants, only about 3,000 of whom play. While most Hainan courses are fully booked during the winter peak tourist season, the insufferable heat and relentless rains of summer keep away all but the most dedicated or frugal (greens fees are often heavily discounted during the quiet months). The struggling global economy has also taken a toll on business.

But such quibbles may be missing the larger truth about golf course development in Hainan, and throughout much of China: the number of golf courses built has very little to do with the number of golfers available to play on them. With few exceptions, golf courses exist to help sell luxury villas. Developers do not worry if a course sits empty, as long as the properties around it sell. And so far in Hainan, selling homes has not been a problem. Wealthy bosses from Beijing, Shanghai, Guangzhou and central China’s coal belt fly in and buy up the villas, sometimes several at a time, often paying in cash. In China, to own a home on a golf course does not necessarily mean you play the game. It’s more about prestige. Golf, like luxury sedans and handbags, is just another way to project your wealth.

During the planning and proposal stage, however, golf is rarely mentioned. That is how developers get around the supposed national moratorium on building courses. “No one calls it a golf course now,” one industry insider told me. “Instead, it’s a green space or it’s equestrian or it’s an exercise field. They are creative. But the government knows. It’s just all about loopholes.”

For example, in 2008 the China Youth Daily reported that the word “golf” does not appear in Mission Hills’ agreement with the local government to develop in Hainan. According to the newspaper, the document describes a “land consolidation” project that will “improve the production and living standards of the local farmers and promote the building of a new socialist countryside”.

Hainan bills itself as China’s greenest province, and in many ways it is the tropical paradise it is touted to be, a literal breath of fresh air for those travelling in from the mainland. But the past several decades of property development and slash-and-burn agriculture have taken their toll on the island’s ecology. Like many current golf projects on Hainan, the Mission Hills development primarily occupies acreage that the government has classified as huangdi, or “wasteland”. But this only means that the land was either never used by man or is no longer used by man. It doesn’t take into account its ecological merits. “If they only build on true wasteland, then there is no problem,” said one conservationist active in Hainan. “To me, the [Mission Hills] area next to Haikou is not a wasteland. In Hong Kong, that would be a country park, a very nice forest or wilderness park.”

This northern section of the Mission Hills land is less than 30 minutes by car from downtown Haikou and just east of a 108sq km national geological park built around the crater of an extinct volcano. Both properties occupy a region long known as the “lung of Haikou” for its green landscape and fresh air. Nearly three years ago, a Haikou-based pressure group believed it had secured around 825 acres of this land to establish a forest park that would help promote environmental awareness. Its members worked on the project for two years, winning the support of the government, attracting investors and brokering a land deal with local villagers. But suddenly in 2007, the villagers ended talks. And that is when the group’s organisers first heard about Project 791.

“They didn’t even notify us,” a member of the group told me over a pot of Pu’er tea. “The government just told the villagers not to work with us any more. All the years working, the money, the energy, all wasted. It was a devastating hit. It broke our hearts, and we felt so small and insignificant. We knew we could never defeat them. How can you go against the government?” The group was warned not to do anything that might disrupt the Mission Hills project. In Hainan, a domestic non-governmental organisation is never truly non-governmental. A good relationship with the authorities is necessary for survival, and going up against golf, an industry thought to be lining the pockets of many a government official, would not be a wise move. At the Mission Hills site, one completed fairway has already been dubbed the “government hole” due to its popularity with local officials.

The lobby group member did not attempt to hide his frustration. “They call this ecological restoration?” he asked incredulously. “Sure, they might plant a few trees – but they also destroyed a mountain and turned it into a lake.” Ah yes, the mountain. It’s true that while certain species of tree and shrub thrive on this volcanic landscape, the rocky earth is not suitable for most forms of farming. It is also not suitable for building and shaping golf courses, which require a couple of metres of topsoil. The solution? Mission Hills bought a “mountain” several kilometres from the construction site and started digging – until the mountain was a hole in the ground. A wagon train of trucks carted the red earth to the construction site, where it is stored in a huge flat pile that looks like an Arizona plateau.

Like environmental protection, land ownership in rural Hainan is a particularly murky issue. Last year, in a town called Longqiao, villagers protested after discovering the great disparity between what Mission Hills had paid the local government for their land and the amount passed on to them. Some demonstrators flipped a government car, and military police were called in to disperse the crowd. Such public expressions of displeasure are often the only recourse for disgruntled villagers, who usually have no official documents to back up their claim to a piece of land. All they can do is yell – or congregate on fairways brandishing their sickles.

Villagers, told that developers are merely renting their land for 50 years, see through the ruse and view this as their only opportunity to cash in. It happens throughout Hainan. At one course site I visited, locals had hastily built new homes in the construction zone in an effort to claim larger payouts. At another site, where villagers were being compensated for each grave that had to be moved, fresh ones began appearing every morning. Construction on the Mission Hills project was halted for several months in 2008 due to land disputes, and various dust-ups have caused the site’s boundaries to change more than a hundred times since the planning process began.

I spent two days hiking through villages around the Mission Hills site, trying to gauge the mood of the locals, who by and large were warm and friendly, quick to invite a stranger indoors or under a shady tree for a cup of tea or a piece of jackfruit. Most lived in hamlets laid out in maze-like fashion, with narrow stone paths weaving between single-storey, centuries-old homes, with walls of irregularly shaped pieces of lava rock and tiled roofs. More and more villagers are doing away with these old buildings, however, opting instead to use the money they have made by selling land to Mission Hills to build larger, multi-storey homes out of brick or cinder block.

Near the perimeter of the golf site, I met Ma Jiguang, who two days earlier had opened a small shop a hundred yards from where labourers were building high-rise dormitories that would eventually house thousands of Mission Hills employees. Behind his one-room cement structure, the 37-year-old Ma had built a brick wall to mark where he felt his property ended and Mission Hills began. Other than his home back in the village, this was the only piece of land he had left.

“We had fruit trees, so I didn’t want to sell,” Ma said, as weary-looking workers wandered into his shop in search of cold water and beer. “But they had already claimed it and measured it. What could I do? The government tells you the price and no matter if you are willing to sell or not, they take your land anyway. As an ordinary citizen, how can you fight the government officials?”

Ma, like many I spoke to, said that despite the area’s designation as wasteland, the nutrient-rich volcanic soil was ideal for cultivating fruit trees. The region’s lychees were particularly famous and could fetch a good price at market. In all, Ma gave up 10 mu (a Chinese unit of measurement equal to roughly one-sixth of an acre) to the Mission Hills project and the government paid him around RMB200,000 (£18,000), a very large sum for the average Chinese farmer. But Ma knew that his land was worth more – Mission Hills, he claimed, paid the government five times what he had received for it – and he wasn’t sure how he’d earn a living in the future without his orchard. Although some villagers were happy to sell because their land was rocky, Ma told me of one of his friends who had protested and refused. The next day, he claimed, soldiers had arrived at his friend’s property and bulldozed his trees.

A car pulled up on the dirt patch in front of Ma’s store. In walked a man in white shorts, a white golf shirt and flip-flops. It was Ma’s cousin, Li Guanghua, a town-level government official. He assured me that Mission Hills Hainan was going to be bigger and better than the one in Shenzhen. “I have been to the Mission Hills in Shenzhen,” Li announced proudly. He and about 100 other town and village representatives had travelled there on a week-long expenses-paid trip before the land deals had been finalised.

“Do you want to have a look inside?” Li asked, gesturing towards the Mission Hills property. “I’d love to,” I said. “But will we be able to get past security? I hear it’s pretty tight.” Li looked insulted. “Who can stop me?” he scoffed. “Who can stop the government’s car?”

Alice Liu contributed to this story. Some names have been changed to protect identities. Dan Washburn is a Shanghai-based writer.
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Ryan Pyle
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