China cracks down, once more, on golf course development

As many will be aware, earlier this year the Chinese Central Government issued the ‘2011 Notice on Starting the Comprehensive Nationwide Compliance and corrective Measures for Golf Courses’. The notice was issued following an explosion of golf course development across the country, despite a 2004 Notice, which effectively banned the development of any new courses in China.

The 2004 Notice forbid local government from approving the construction of new golf courses, and also supposedly forced those projects that had been built without relevant approvals to be stopped. As visitors or observers of the local industry will attest, the 2004 Notice has been largely ignored in China as developers skirt anti-golf regulations by incorporating courses into housing estates and referring to their layouts as ‘green space’, ‘sports fields’ or ‘country clubs’. As a result golf construction has exploded, with as many as 600 courses now in operation across the country. Most of these projects have been approved by local government, which sees golf as having a positive financial and social benefit to their community.

The 2011 Notice apparently aims to put the brakes back on golf construction, and to prevent the inappropriate development of farmland, forests and drinking water source zones. It requires the local provincial governments in China to both continue to enforce the 2004 ban on new golf construction whilst also identifying completed courses that occupy farm or forest land.

Local governments have been asked to conduct an investigation into golf course compliance and to inspect, one-by-one, all of the golf courses in their region. They are expected to take appropriate action against those in violation of governmental regulations. This action would apparently include converting golf courses back to farmland, as well as fines and other penalties for course operators. It’s expected that local governments will have completed their compliance reports by the end of June.

Whether golf development continues to power ahead in China like it did after the 2004 Notice remains to be seen, but there is no doubt that this latest crackdown has caused some concern within the industry and sensible developers will proceed now with much more caution. We expect fewer courses on questionable sites, such as within national parks or on occupied farming land, but hope that high-quality, sustainable golf projects continue to be part of major residential and recreational subdivisions across the country.

While there have certainly been a number of ‘dodgy’ developments in recent years, the industry is clearly moving in the right direction both in terms of where golf courses are being built and also how they are designed. Despite these positive signs, most golf construction here still happens at breakneck speed and if this new edict from the central government slows things down a little, and causes investors and property developers to proceed more cautiously, it may actually be good for the game in China.

As always we will continue to follow the local industry closely here at Planet Golf, and look forward to reporting on more exciting Chinese developments in the future.

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