A short but interesting Economist article on golf in China

[Peter Pallotta]

From mid February of this year, and tied to the water shortages/drought some provinces are experiencing.  As is often the case with the Economist magazine - concise and well written.   The last line of the article left me asking the question "Why" -- not in a negative sense, but more in wondering about the power/appeal of the game.

Peter


An acute shortage of water, say Beijing officials, is one important reason for limiting the city’s growth. Rarely in recent memory has water scarcity been so apparent as this winter, which saw 108 dry days before snowfall on February 9th—the latest to arrive in 60 years. When it comes to water-hungry golf courses, however, a blind eye is turned.

Golf has been a favoured sport of the elite since the 1980s, when Zhao Ziyang, then Communist Party chief, played at one of the city’s first clubs. To make the pursuit more palatable to xenophobes, the state media ran stories brazenly claiming that the game was invented in China hundreds of years before the Scots had ever heard of it.

By 2004, the golf craze was getting embarrassing. Not just in the capital, perennially afflicted by drought, but nationwide a profusion of golf courses was eating up scarce farmland. The government banned the building of new courses. Beijing already boasted 38, but they appear to have been far from enough to satisfy demand. In January Southern Weekend reported that construction in the capital, as elsewhere, defiantly continues apace.

The newspaper said that telephone directories alone showed the existence of more than 60 courses in Beijing; other materials suggest 73. A recent aerial survey by the government confirmed 170 golfing establishments (including driving ranges), of which at least 70 were illegal. Developers appear to have got away with it simply by not calling them golf courses.

For all the fretting about this winter’s drought, Beijing shows little sign of renewing the onslaught on golf (or on skiing, another popular pastime around Beijing, for which snow is created artificially). The drought has hit eight provinces that produce much of China’s wheat. Crop-damage could send already fast-climbing food prices much higher. The game, though, goes on.

[George Pazin]

Many can understand the appeal of the game. Play it once, you are hooked. Or at least a lot are, not everyone, obviously.

The negative part of the why bothers me too much to speak about golf in China.

[Peter Pallotta]

George - yes, I understand the appeal of the game to regular people; I'm wondering about the power of its appeal for the government leaders (the kind who usually don't look the other way re their publiic edicts).

Peter  

[Lou_Duran]

George - yes, i understand the appeal of the game to regualr people; I'm wondering about the power of its appeal for the government leaders (who usually don't look the other re their publiic edicts).

Peter 

Peter,

Why the wonder?  Government is populated by people; attributions to these folks of greater benevolence or being guided by purer, more altruistic motives relative to the population at large are foolhardy.  The biggest difference between a government and a business leader is that I can normally avoid the desires and mandates of the latter, but am compelled in many ways by the former.  As compensation, benefits, and job security for the public sector continues to outpace the private sector, golf may become the game of the new elites- those who govern.  A bit ironic, don't you think?   

[Peter Pallotta]

Lou: yes, but my wonder comes not from attributing more altruism or purity to the government leadership than to business people -- it comes from recognizing the tendency of that leadership to be image conscious and to carefully control information/communication, such that this public/open contradiction between what they've decreed and what they are allowing struck me as unusual.  

Peter

[Lou_Duran]

Peter,

Again, in the case of the Chinese government and socialism in general, it is not about reality, but about creating the desired illusion of how things are.  This is largely controlled through the various channels which mold and reinforce public thought, namely the media, academia, and high-profile entertainment types, which, in China are largely organs of the Party.

But even in the U.S., depending if one is a Democrat or a Republican, or a "progressive"/liberal or a conservative, the same action- say a president playing golf or taking time off away from D.C.- is presented quite differently.  Perhaps you didn't see all the highly negative coverage about Bush being AWOL on vacation in his TX ranch or playing golf in Kennenbunkport, but nary a word when Obama hits the links while the Middle East burns.  As noted in "Animal Farm", some piggies are just a bit more equal than others.  Oh to live in a world where we act in precisely the same manner we require of others to act! (a derivative of the golden rule.)

[Jim_Kennedy]

PP,
The government of China recognizes where the money and jobs are, but there are 1.34 billion people in the country who've been fed Chairman Mao for the past 60 years.

It must be quite an exercise to turn that ship-of-state around while staying in power.   
   
 

[Tom_Doak]

How many people could you feed off 160 acres of wheat field in one year?  Does anyone know the answer?  The article makes it sound like people are starving because they built another golf course in China.

[DMoriarty]

How many people could you feed off 160 acres of wheat field in one year?  Does anyone know the answer?  The article makes it sound like people are starving because they built another golf course in China.

Seriously?  It would depend upon the land, but here is a rough guestimate.  Figure 30 bushels per acre for dry-land farming or 80 bushels per acre for irrigated farmland.  So for 160 acres let's say 4800 to 12,800 bushels.  Sixty pounds wheat in a bushel, which would make about sixty 1 lb. loaves of "whole wheat" bread. That'd be 288,000 to 768,000 loaves of bread. Not sure how many that would feed. Probably depends upon whether those people really like bread.  

But according to Jim Kennedy they have all been fed Chairman Mao anyway, so they are probably not hungry.

[B. Mogg]

How many people could you feed off 160 acres of wheat field in one year?  Does anyone know the answer?  The article makes it sound like people are starving because they built another golf course in China.

Not sure that golf is really the bogey man it is made out to be in China. Yes, there are anywhere between 600 and 800 golf courses in China and probably another 100 or more underway (Florida by comparison has over 1000 courses). Many of these courses are not on arable land - instead on areas reclaimed from the sea or up in the hills. Some of the farming carried out on sites is very marginal sort of farming - its not like the type of well managed industrial farmland you see in the US or Australia.

The real unseen destroyer of farmland is industrial parks. These things have propagated like weeds across the country - there is well over 4000 of them across the country, many sitting completely empty. And some of these parks are huge (talking in tens of square kilometres). Because they are seen as contributing to the industrial base (although many are not) they get a free ride.

Golf courses on the other hand are seen as playgrounds of the rich.

What would interest me is how easily would it be to convert a golf course back into farmland? I am guessing it would be pretty easy - certainly a lot easier than could be said for an industrial park.

[DMoriarty]

Also, I read recently where there was pressure on and/or incentives for farmers in China to grow more lucrative crops like tobacco, which doesn't go to far in feeding anyone.

[B. Mogg]

Also, I read recently where there was pressure on and/or incentives for farmers in China to grow more lucrative crops like tobacco, which doesn't go to far in feeding anyone.

All the problems would go away if people had tenure over their land - and were compensated properly for it. That way land use would be determined according to market demand. That is not going to happen in China anytime soon so until then the peasants are going to get screwed no matter if it is a golf course or public housing getting built.

[David Kelly]

I haven't been to China but I seriously question the demand for all those courses.  I think the course building boom might be tied into what could be a real estate bubble that would dwarf anything seen so far:
http://www.dailymail.co.uk/news/article-1339536/Ghost-towns-China-Satellite-images-cities-lying-completely-deserted.html

[Jim_Kennedy]

On average, China produces 108,712 *TMT of wheat annually. This makes China the world’s largest wheat producer, producing 42,856 TMT more than India, the world’s second largest wheat producer. However, China also has a population of over 1.2 billion people, and domestic consumption in China averages 112,501 TMT. China is the world’s seventh largest importer of wheat, importing an average of 4,247 TMT of wheat. Variability in production and quality issues also compel China to export a small quantity of wheat, mainly in years of excess, and mainly to neighboring Asian countries. Its exporting policies have made China the twenty-first largest exporter in the world, averaging an export of 657 TMT annually. Also, China ranks first in ending stocks, averaging 61,896 TMT

*Thousand Metric Tons

They are importing wheat, so whatever they lose to XYZ has some impact.



A golf course in the UK employs 14 people, on average.
A golf course in China employs 282 people, on average. (KMPG report)


Edit: China produces an average of 65.0 bu/acre, increasing by 2.2 bu per year.

160 acres of wheat will produce 780,000 one-pound loaves of white bread, or 988,000 one-pound loaves of whole wheat bread.

Consumption of wheat per person in China is about one kilo per year. A 160 acre farm would supply just under 1/2 million people's bread needs.    

[Richard Choi]

A typical western thinking... wheat...

The dominant grain grown in China is rice, not wheat. Most of the courses are built in southern China where rice is even more important.

Figuring that a typical asian family farm is usually about an acre, you can roughly calculate that 168 acres would probably feed at least 168 families.

[Jim_Kennedy]

Richard,
Several sources cite 5,300 lbs of rice per acre as an average in China and they cite usage as 90kg per person/per year . That translates into one acre of rice feeding 26/27 people per year.

They also mention the impact of hybrids, where yields of twice the present amount per acre are possible.

[Kris Shreiner]

Kelly,

Thank you for posting that link! Sounds like an excellent opportunity to learn exactly what is going on over there. I'll be sure to tune into to that Webcast. The Chinese government and regulatory folks should be part of that audience, but I doubt they are interested in that as a group.

Cheers,
Kris

[Matt Day]

from the number of architects present at the China Golf Show two weeks ago, China is viewed as the promised land. There seemed to be around 20-30 architects represented from all around the globe. I think from memory that one of the presenters mentioned numbers like 600 courses in the pipeline for the next ten years, but I'd had a few Tsingtaos the night before and might have misheard.

Any discussion with the average Chinese people about golf brought the immediate comment that golf was for rich people. There appears to be no thought for public golf facilities, driving ranges is it.

To me as on outsider looking in for only a brief moment, China is promising but has a number of obstacles that need to be overcome.