Why China's 'Illegal' Golf Boom Is Coming To An End - Forbes

It seems that China’s wealthy elite are going to have to pack away their woods and putters for the foreseeable future, with dozens of golf courses expected to be shut down by the government in the coming year, according to golf industry experts.

Earlier this week, Chinese authorities closed 66 courses in a nationwide crackdown.

Alongside luxury cars and oversized watches, golf has become a symbol of wealth and part of a modern lifestyle for many of China’s nouveau riche. The boom in golf’s popularity has led to hundreds of new courses being built alongside luxury mansions and other luxury facilities.

In this Saturday, Dec. 13, 2014 photo, Shanshan Feng of China plays a ball on the 14th hole during the final round of the Omega Dubai Ladies Masters in Dubai, United Arab Emirates. (AP Photo/Kamran Jebreili)

While there are no official figures for how many golf courses there are in the country, golf organization R&A estimates in a new report that there are 473. Author and golf expert Dan Washburn told me it could be as much as double that amount.

The irony of China’s golf boom is that building new golf courses is actually illegal.

When Mao Zedong took power in 1949 he branded the sport bourgeoisie and a lot of the existing golf courses were dug up or repurposed. (Shanghai’s premier golf club was turned into a zoo). In 2004, the government again imposed a ban on new golf course construction in an effort to protect the country’s land and water resources.

So how can something be booming and illegal at the same time?

“Golf is a politically taboo topic and tightly linked to corruption,” Dan Washburn said during a speech at the Foreign Correspondents’ Club in Hong Kong. “No golf course is being built in China without government involvement.”

Developers and local officials have typically side-stepped the restrictions by filing applications that designate the projects as sports training facilities, eco-parks or other creative types of developments. “Rule number one when building a golf course: don’t call it a golf course,” Washburn said.

In his book “The Forbidden Game: Golf and the Chinese Dream”, he states that golf isn’t just a barometer for the country’s rapid economic rise. It also allows us to examine major concerns, such as the ever widening gap between rich and poor, rural land rights disputes, environmental concerns, a real-estate bubble and “plenty and plenty of corruption”.

Repeatedly, farmers are forced to give up their land, which is sold by corrupt officials to developers.

“You have people living in shacks, in the shadow of multi million dollar mansions. That is an image that in a way encapsulates modern China,” he said.

That’s also why the issue of the “rich man’s sport” arises a lot of tension.

Now, under president Xi Jinping’s crackdown on corruption and party officials’ lavish lifestyles, the boom days seem be fading. In its report, R&A said that national government is now taking a more active enforcement stance and demolishing courses that were illegally built.

Washburn said he encountered more pessimism because there’s now more uncertainty in the industry than ever before. There were always crackdowns and a level of uncertainty, but the only constant was that the number of golf courses was rising.

“Now, it has come to a halt. In fact, there is a rumour that China plans to close as many as 100 courses the coming year,” he said.

“A lot of this has to do with the current business climate in China, and definitely has a lot to do with Xi Jinping’s corruption crackdown.”

Chinese authorities closed down 66 golf courses earlier this week in a crackdown on courses built in contravention of rules designed to protect arable land and save water, Reuters said.

“Governments at all levels and relevant State Council organs have proactively carried out golf course rectification work and have achieved phased results,” the National Development and Reform Commission said in a brief statement.

Three of the closed courses were in Beijing.

Three golf courses that belong to Taiwan’s Orient Orient Golf group were recently ordered by local governments to shut down by the end of March this year, according to Taiwanese media. No details of compensation were provided.

The newspaper, Want China Times, said that since the implementation of the crackdown policy last year, several golf courses have been forced to close.

Despite the ban, there are currently 56 courses in development, R&A said. However, there are also 46 projects on hold with their fate unknown.

It will take a long time before Chinese politicians will be open about their affection for golf. It brings to mind the unfortunate fate of Zhao Ziyang. He was the last high-ranking Chinese public official to be open about his golf habit and spent the final 15 years of his life under house arrest â€" although his political stance was more controversial than his sporting habits.

“Zhao remains the only member of China’s ruling politburo ever to be photographed enjoying a round of golf. Such a photo, even today, would be considered political suicide,” concluded Washburn.