In a land where the benchmark index more than quadrupled in two years, does the Magic Kingdom really have a place? According to the Shanghai government, yes - although Disney itself seems more reticent.

I first read rumors of a Shanghai Disneyland in March 2006, when China Daily quoted the city’s mayor, Han Zheng, as saying a theme park was being planned.

“We have hoped to build a Disneyland theme park for a long time, but we are not sure when the construction will begin,” the report said. Han was talking to reporters in Beijing during the 10th National People’s Congress.

Then, nothing. Now, new, more detailed rumors have surfaced. AP did a story recently (it was carried on the website of Singapore’s subscription-only, no-free-archive Straits Times, and I can’t seem to find that story on the news aggregators) saying that a Disneyland for Shanghai has nearly been confirmed. All that’s left is approval from the central government. It even named possible sites for the park: Chongming Island or Chuansha in Pudong.

The evidence this time? The AP quoted an anonymous source in the city government, and also pointed to a quote by city official Qian Weizhong in the online edition of “state-run magazine Oriental Outlook”: “Once we have central government approval and a concrete plan, Shanghai Disneyland can begin construction right away.”

AP also pointed out that two “high-level executives” from a US Disney theme park had surveyed Chongming Island twice in early 2007. Disney has denied that a Shanghai park is in the works.

Interestingly, the report says public discussion of Shanghai Disneyland was suspended after the pension fund scandal that took down former city party boss Chen Liangyu shook the city in 2006.

That theory would explain a few things. Han Zheng was only recently officially let off the hook - this Reuters report says he’s been allowed to keep his job despite being implicated in the pension fund abuse probe. There’s a new party boss (former construction minister Yu Zhengsheng) in town, and anointing a Disneyland for his new jurisdiction would surely be a nice bonus - even if the heavy lifting for the deal began during Chen’s reign.

The set-up seems perfect: Chongming is already earmarked for the Dongtan eco-city project, which means Disney visitors won’t be choking on smog while they ride Space Mountain. It’ll be a major tourism boost for a city that desperately lacks top-class family entertainment venues. And Disney would get a major presence in the mainland market, introducing millions of newly minted middle-class Chinese to the joys of Mickey and co.

Although Shanghai and Hong Kong are two very different markets - and the parks will also surely be quite different, at least in terms of scale - the question remains: Will a Shanghai park end up like Disney’s Hong Kong venture, which isn’t exactly raking in the cash? Or will Disney conquer China with all-American values and entertainment? It’s a small world, after all.

Highlights from the last week of China business news.

Hobnobbing in Bali and Beijing
Lots of high-powered meetings recently, with the attendant speculation about their outcomes. Probably the most enjoyable one to be at is in Bali, where 190 countries have sent delegates to hash out a plan - for two weeks - to replace the Kyoto Protocol, which expires in 2012. That meet started Monday, and, although details are still surprisingly thin on the ground, it appears that China will continue to reject imposed emissions targets. It will propose the creation of an international technology transfer fund - paid for by developed countries - that will help developing nations research and create their own clean technology. This works out very well for China, clearly. In the less salubrious environs of Beijing, another meeting of consequence ended this week, confirming the rumors that the top national leadership has decided to step up monetary tightening measures next year. The seasoned decoders of bureaucrat-speak at the Journal say officials now speak of a “tight” monetary policy for next year, instead of the “stable-to-tight” regime now in place. Next week, the US-China Strategic Economic Dialog happens for the last time this year. Hank Paulson flies in with Susan Schwab, product safety chief Mike Leavitt and others to talk about product safety and - surprise! - letting the yuan appreciate more quickly. Vice Premier Wu Yi must be glad she’s retiring in March.

Rio Tinto mines a rich vein of rumors
Will they or won’t they, steel executives wondered this week about a Chinese counter-bid for Rio Tinto. Last week, we wrote that China Investment Corp was rumored to be putting together a deal to buy into Rio, but that was quickly squashed by CIC and Rio executives. The sovereign wealth fund did say, after all, that it’s not confident enough to go raiding abroad yet, and that it would steer clear of sensitive industries. So the rumor mill promptly put new hearsay into circulation. For awhile, it seemed that Baosteel would spearhead a consortium of Chinese firms to snatch up Rio Tinto. A Baosteel executive told Economic Observer last week that his firm would only join a bid if the Chinese government wanted it to - hinting that a bid was possible, though not confirmed. Then the 21st Century Business Herald said Baosteel chairman Xu Lejiang confirmed that a bid was in the works. Shares of Rio Tinto jumped. Today, the official Shanghai Securities News quoted Xu denying the quote. “I did not say this. It is a fabrication of the media,” he said. Even with that seemingly definitive response to the matter, our guess is the rumor mill still has plenty of grist to keep it churning.

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You may have read last week that International Olympic Committee head Jacques Rogge said that some Olympic events may have to be postponed if some days fail to live up to Beijing’s promises of clear blue car exhaust-free skies, for the sake of the athletes competing. Smoggy days may be depressing, but most of us without lung conditions (yet) can manage to walk around in one. How much does pollution affect world-class athletes? Slate’s frequently useful Exlpainer column is glad you asked. Here’s what they had to say:

Scientists haven’t done enough research to be sure, but it could make it impossible to break any world records. An athlete must breathe in a large amount of air during a competition—more than 20 times the amount inhaled by a normal person at rest. In Beijing, that means the athlete will be getting a super-sized dose of ozone and fine particulates, which can make respiration more difficult and reduce the amount of oxygen that gets to the muscles.  …

It is possible to develop a tolerance to ozone over just a few days, but that doesn’t mean athletes should spend extra time training in Beijing. In fact, Olympics coaches advise competitors against arriving too early and recommend wearing activated carbon filtration masks.

Yikes. Read more here.

picture from Slate

The annual meeting of China’s parliament, the National People’s Congress (NPC), is nothing if not predictable. After all, this is the political body that has never actually voted down a policy.

Opening the 10-day jamboree (which, curiously, always seems to see the ethnic minority NPC delegates pushed to the front for photo calls - never let it be said China is not a diverse, equal and caring society), Premier Wen Jiabao hit all the expected buttons.

“The pattern of economic growth is inefficient,” Wen told the 3,000 delegates. “This can be seen most clearly in excessive energy consumption and serious environmental pollution.”

There goes that chemical plant they wanted to build in northern Anhui. And Shandong, Guangdong, Henan, et al.

And it’s not as if the provinces can simply nod in agreement and then do whatever the hell they want any longer. At least, not in theory. Wen noted that many of the problems are down to local governments that have failed to comply with environmental regulations and requirements.

The message is clear: the party’s over boys. China is no longer interested in growth at any cost.

(Incidentally, there is no reason why the message shouldn’t be clear. This mantra has been publicly polished for months now just so it would be nice and shiny for Wen’s big speech.)

The tighter leash to be placed on provinces previously committed to lightning growth is reflected in Wen’s GDP growth projection for 2007 - “around 8%”, down from 10.7% in 2006. Note the “around”. Based on Beijing’s track record, a projection of 8% means they will struggle to keep it below 9-9.5%.

As if things couldn’t get any worse for your provincial official who has grown fat on the government’s tab, Wen added: “Quite a few local governments, government offices and organizations compete with one another for lavishness and spend money hand over foot, which arouses strong public resentment.”

Cue the hearts and minds section of the address, complete with the prerequisite reference to “building a harmonious countryside”. Down with corruption, down with the rich-poor divide and up with farmers’ incomes, buoyed by better education and medical care.

Expect more on the “new Socialist countryside” Tuesday, courtesy of a news conference starring officials from the Chinese People’s Political Consultive Conference.

Come Wednesday and it’s back to controlling the growth express train, with your friendly ticket collector Ma Kai, director of the National Development and Reform Commission.

Sometimes it seems like it’s all one can watch these days in Beijing. The following from Danwei.org:

You can see SEPA’s figures for December 12. Note that while Beijing air gets a 500, the highest figure for another city is 212, measured in Shijiazhuang, a Hebei city close to Beijing.

The SEPA chart says that the major pollutant is ‘inhalable particles’ (可吸入颗粒物). It is not clear if that includes dust as opposed to industrial pollutants.

Can that be right? Personally, I’m not in Beijing, so I’m not qualified to say, but please write in with your own assessment if you were yesterday. What was it? Coal particles? Car exhaust? Premature dust storm?

Anyway, the SEPA site is interesting, as it lets you search pollution levels (measured on an index of 0 to 500) of quite a few Chinese cities over periods of time or on specific dates. After spiking on Monday (256) and Tuesday, Beijing’s air quality returned to a breathable 88 today. A search for levels in the capital during the two and a half weeks following August 8 this year (the approximate dates for the 2008 Olympics) found them mostly around the low 100s and upper double digits. Beijing better hope that pattern holds.

Rounding up people’s dogs and putting them down? No problem! Complaining about it? A national disgrace! The protests in Beijing over the recently imposed “one dog” rule following a rabies scare have apparently shamed Beijing in the eyes of the world, in the eyes of its own law and order officials, that is. As one animal rights activist put it in the South China Morning Post,

“Friends with the Beijing Public Security Bureau told me they wanted to punish the event’s leaders, who made the city lose face in international society while the 2008 Olympics host city is under the spotlight.”

While I can appreciate on some level that allowing organized protests of any kind makes the PSB lose face in front of city and central government authorities - since it reflects badly on their ability to control the public in the run-up to an event where everything must go according to plan, or else - this is a ultimately a losing PR move and only attracts negative international attention. Like, for instance, from the Washington Post.

Especially so when your city is still having days like yesterday, when “thick fog”, as Shanghai Daily so generously puts it, caused 80 planes to be delayed at Beijing’s Capital International Airport. Let’s not kid ourselves here - there’s a word for that weather, and it isn’t fog. Just take a look at this picture, taken yesterday:

There may be some moisture in the air there, but there are definitely plenty of sooty particulates as well.

Somebody, please explain to Beijing city officials which is the bigger loss of face internationally, not just within their own bureaucracy.

Photos from ENS Newswire and Shanghai Daily websites.