By Ronald Fream
For 15 years or more, China has been viewed as the world’s top growth market for golf development. And it has mostly delivered on its promise. Starting from literally zero in 1980, today the nation counts roughly 600 golf courses.
But don’t bet on golf development in China continuing at this furious pace. In no way will China ever build even 1,700 golf courses, approximately 10 percent of the number still in play in the United States. In the next few years, adding even 100 more courses to the current inventory will be a challenge.
I know this news will disappoint the architects who believe China will someday serve as their meal ticket. Sorry, but it’s not going to happen.
Land and water are the two major “great walls” that will slow future golf development.
No doubt, China is a huge country – 9.7 million square kilometers. The trouble is, much of the nation is nearly inhospitable due to harsh climates and/or a lack of reliable rainfall.
In addition, the price of land has increased dramatically in all of China’s urban areas, and therefore the cost of golf construction is getting increasingly difficult to recover through property sales. We learned this in the United States the hard way. Nowadays in China, developers need to build huge communities to pay for the design and construction of an 18-hole course. Even when land is available at an affordable price, it’s hard to justify allocating 70 hectares (175 acres) to a golf course when such a plot could accommodate 370 or more apartments per hectare – some 25,900 income-producing units.
In the future, residential development in and around China’s cities will be far more important than golf development. The nation has a population of 1.36 billion, and it’s adding 22 million people a year – practically the equivalent of the current population of Australia! According to the Financial Times, there will be 1 billion people living in China’s cities by 2030.
This unstoppable population growth is a problem, because less than 15 percent of China’s land mass is suitable for crop production. By comparison, 44 percent of the land in the United States is arable. Therefore, any land in China that’s suitable for agriculture will inevitably grow in strategic importance and, more importantly, value. It won’t be made available for any kind of development, let alone golf development.
As troublesome as land-related issues may be, however, water is a larger worry. In many of China’s provinces, the supply of ground water has been dropping at an alarming rate. It’s feared that Beijing may run out of potable water in a few years.
To address this issue, China is creating a canal system, the South-North Water Transfer Project, that will transport water from the interior southwest and the foothills of the Himalayas to the industrial north, where rivers are running dry. This is a multidimensional project, but one part of it involves tapping the headwaters of the mighty Yarlung Tsangpo (or Zangbo) River, which originates in Tibet and flows through the states of Arunachal Pradesh and Assam in eastern India and then into Bangladesh. The dams that are being built to capture the water will be tunneled through mountain ranges to the Yangtze River and then go north.
This construction is going to have a major impact on India, a nation with a fast-growing population and plenty of water-related problems of its own. The two nations have only recently begun to discuss the implications of the water diversion. Within 20 years, a water war is a distinct possibility.
Mind you, I’m not saying that golf construction in China is about to end. Golf in China is here to stay. Powerful local politicians and major business forces will see to it. I’m simply saying that the upside to China’s golf potential isn’t as high as some people would have you believe. In the coming years, golf construction is going to be a far more selective affair than it has been up to now. We are closer to the end than we are to the beginning.
Underemployed golf architects from distant places aren’t going to find a feeding frenzy in China. They may not even find a bowl of rice.
Ronald Fream, an occasional correspondent, founded Golfplan, a Santa Rosa, California-based design company, in 1972. He’s now semi-retired and living in Malaysia.