The Forbidden Game

by Dan Washburn

  • Accelerate intensive development of the leisure industry

  • Increase the wage income of farmers

  • Advance the construction of a peaceful and harmonious society

  The words were printed on an image the size of a movie theater screen – a color photo of King Valley golf course taken when the fairways had been decidedly greener.

  Access to the club was closed in early 2010, soon after the “crackdown” press conference, but if you crossed the creek you could find a dirt path winding around the course’s southern end, offering several fence-obstructed views of what was once known as the back nine. Nearly a yard of earth was removed in some spots, and most of the fairways looked like freshly plowed fields awaiting the spring planting season. But a closer inspection revealed what could, at best, be called “peculiarities.” All the greens and tee boxes in view – the most expensive architectural features on a golf course – were untouched. Many of the cuts around them seemed to follow a neat line. Greens, and what remained of some of the fairways, were being watered and mowed daily. The paved cart paths were still in place. So were all the buildings and most of the landscaping. Some smaller shrubs remained wrapped in white plastic to protect them from the winter cold. Was this the new workers’ paradise? A putting green for every production team?

  “Don’t worry – the course is not going to become farmland,” one of the several dozen workers who remained at King Valley said reassuringly. “We are working on repairing the underground pipes that were broken. It’s just a matter of time before we open again. Since the greens were not harmed, of course it will take a very short time to rebuild it. The government has certain guanxi with our company.”

  That favorable relationship would seem to be strained these days. When Beijing’s focus turned to King Valley, the local officials made a figurative mad dash for the hills. Many of them denied knowing a golf course existed inside the “Anji China Ecotourism and Fitness Center,” as King Valley was then officially known. This was, of course, ridiculous: King Valley had been a stop on China’s domestic golf tour the year before; it had been the official training center of the Zhejiang provincial golf team; and the large sign the local government installed beside the highway directing people to “King Valley Country Club” included the stylized silhouette of a man swinging a golf club. “Only a ghost would believe their claims,” said a shopkeeper in Jianshan. “Government officials go there all the time. How can they not know?”

  Despite the workers’ assertions at the golf course, sources familiar with the situation said Hangzhou-based Handnice Group – the company behind the project – was in no hurry to pay for the necessary repairs, or to jump back in bed with the local government officials who they felt had betrayed them. Many in Jianshan believed the course’s destruction had been a calculated move by the local officials, a grand display intended to shield them from punishment from Beijing. It’s noteworthy that the bulldozers were brought in with little public fanfare. The only newspaper report about the drama at King Valley, which appeared in Hangzhou’s Youth Times, was later expunged from the paper’s website. “The local government already turned their back on [Handnice] once, so it’s very hard to say they will not do it again,” said the source. “The developers will not move forward unless they can be assured the project is now fully legal.”

  Handnice, to be sure, deserved its share of the blame in this mess. The risks associated with opening a golf course in China, while seemingly benign in recent years, were no secret. And while official land designations in rural China often changed on the latest whims of those in power, no one could miss the fact that villagers were farming – rice and pears, mostly – on a portion of the land that would become King Valley Country Club. In fact, the company had paid close to $1.2 million in fines for illegal land use between 2006 and 2008, so they were well aware of the turbulent political climate. But after each fine, sources said, the local government urged them to carry on with construction. The fines were viewed merely as a cost of doing business.

  In this case, it seemed the process of relocating and compensating villagers got too messy, placing King Valley on the central government’s shortlist for investigation. Because the state owned all the land, money from the developer had gone directly to the local government, as per usual. Much of the money had got caught in the government filter, and never made it to the villagers who called the land home.

  One elderly man in Jianshan said the 100,000-yuan settlement he received was not enough to cover the cost of his new home, and that the 1,000 yuan he was set to receive in “rent” each year from the golf course, which charges up to 800 yuan for a round of golf, was “definitely not enough.” He shrugged his shoulders and added, “But what can you do?”

  It was unclear what would come next for King Valley’s owners. When asked for a status update, a worker at the Anji Land and Resources Bureau said only “that’s already been dealt with” before hanging up the phone.

  *

  Such stories rang true for Martin Moore, who estimated that 90 percent of his projects encounter land-related “obstacles” of some kind, be they villager relocations, the removal of graves, or disputes over what was or wasn’t farmland. The farmland issue, which according to Martin had been cropping up more and more in recent years, was a thorny one, because, as one course designer put it, “it seems like every square inch of China that is not already under a building or a highway is being used to farm something.” Such complications should be settled between the local government, the developer and the area’s residents long before a construction crew hits a site. But in Martin’s experience they rarely were.

  Even when things were ironed out, and all the local agencies declared themselves satisfied, the golf course was still technically illegal, after all. You could get permits for construction and permits to move land and permits to plant grass, but you couldn’t get a permit to build a golf course. So when government inspectors (the “golf police,” Martin and others called them) came knocking, as the owners of King Valley learned, you’re only as good as your relationship with the local brass. And if Beijing decided to get involved, that probably wasn’t getting you very far.

  “These guys get approval from local government, and it’s all about how many nights in the karaoke and this and that,” Martin said. “They’re going to eventually convince the local government to say, ‘Yeah, yeah, yeah,’ but when the central government comes down on them, those guys aren’t going to say, ‘I told them they could do it.’ It’s pretty ugly, and that’s the history with the village issues. These owners don’t go in there and clear all the villagers. They go in there and negotiate with the local government. ‘Okay, we have this many villagers. Here’s the compensation.’ And how much of that goes from the government to the villagers? It’s never enough, and the owners are always digging back into their pockets because you still have villagers who aren’t going to move. That’s business in China, I guess.”

  Martin always steered clear of this side of the business. But he found developers rarely did all the necessary legwork before launching into their projects. “I ask the same questions to every one of them when we first meet,” Martin said. “Do you own all the land? Do you have any villager problems? Do you have this? Do you have that? Please do your due diligence, do your homework and find that out. We need to know that now rather than later because we mobilize a big crew and if we hit all these walls it just costs them millions of dollars. Obviously some of them have better connections with government than others so even those that do have obstacles can get clear pretty quick.”

  That developers could move forward with so many question marks hanging over their projects was proof, Martin acknowledged, that some kind of crackdown was probably justified. But he thought it wouldn’t make much difference. “They are never going to be able to stop all the golf,” he said. Martin reported that most of the “respected” people in the industry agreed with him that the government needed to get “a better handle on
things.” The real problems were people “who wake up with a dream” to build a golf course and take off on a development project “destroying the world, without anybody knowing about it.”

  *

  Initially, when Martin read all the “crackdown” headlines – his colleagues had forwarded them around like wildfire – he figured it was just the “government flexing its muscles before Chinese New Year.” Martin had been in China long enough to know not to overreact to every story about the government targeting golf course development. The busiest years of his career hadn’t come until after China had made his profession illegal! He’d seen probably a dozen stories about a supposed crackdown in the past six months. “The first couple used to scare me a bit, but now for every crackdown announcement, I get twenty-five leads right behind it,” he said.

  “Maybe I’m just trying to be optimistic, but I see no way in the world China’s going to be able to put it to a halt. I’ve been telling people, if they shut down 50 percent, even 70 percent, of projects, there are still too many of them – a hell of a lot of golf courses are still going to be built. I counted my prospect list this morning because I had a meeting, and I had eighty-seven golf courses on my prospect list and thirty-seven of those are what I call ‘hot’ and ‘new’ leads.”

  In the past few weeks, Martin had heard that several golf projects around Chengdu, the capital of Sichuan province, which had become a hotbed of construction activity, had been put on hold, pending further review. The golf police had been frisking golf courses, both finished and unfinished. An official provincial notice called for local governments in Sichuan to “stop approving and building new golf courses.” It cited the 2004 moratorium issued by the State Council and insisted the authorities “immediately clean up and correct” existing golf courses and other “forbidden projects.” The province’s “limited land resources” were instead supposed to be used to “build important infrastructure.” Golf courses currently under construction, the notice said, must be halted, and those in the planning stages were “forbidden to start.”

  Martin was about to sign a contract for a new twenty-seven-hole layout south of Chengdu called Seasons International Country Club, and he feared it might get caught up in the crackdown. He was soon told the contract would have to wait until after Chinese New Year. Then, just a few days later, he got word that the people behind the project wanted to hurry up and sign the deal before the holiday, with an eye toward “moving dirt by March 1.” “That’s right in Chengdu, so they must’ve resolved what problems they had,” Martin said. It seemed proof to him that the latest crackdown wasn’t “for real.”

  But after the Chinese New Year, he kept hearing stories about projects in Sichuan. Some were saying all course projects in the province were to be shut down for six months. Worse, he’d been told that a nearly completed course on the outskirts of Chengdu had been forced to reforest its fairways. People talked about the hundreds of new trees sticking out of acres of freshly landscaped lawns, but no one could pinpoint the course where this had supposedly taken place.

  There were other examples of government interference that Martin couldn’t shake off as hearsay, however, because they were happening on his own sites. The owner of Seasons International had officially extended the construction schedule into the following year, and the scope of the undertaking was starting to resemble the “sports park” it was known as in the official documents – more so than the golf course he’d been contracted to build. They were going to clear trees and move dirt, build lakes and shape the layout. They were going to do everything to it except make it look like a golf course. No greens, no bunkers no tee boxes; just a very expensive park with no public access. “It’s basically landscape architecture right now,” Martin said. He suspected that the owner had a long-term plan in mind. “It’s going to look just like that, and then, when they think it’s going to ease up, they’ll bring somebody in to cut out the greens and bunkers.”

  Things were less “funny” at one of Martin’s other projects, northeast of Chengdu, where workers had become accustomed to helicopters “and all kinds of shit” flying overhead on a daily basis – the Beijing golf police’s not-so-subtle way of letting them know they were being watched. It got to be like working in a war zone. “The owner’s comment to my guy was, ‘Screw ’em. We’ll shoot ’em down,’” Martin said. “There we are, grassing holes and cutting in bunkers and putting in sand. Either the owner is just not listening or they know the right people. Who knows how it works?” And that was coming from someone who had worked in China longer than almost anyone.

  Martin had just returned from San Diego, where the annual Golf Industry Show, or at least what he called the “Campbell’s condensed soup” version of it, had been held. The industry, like the economy, was hurting, and attendance was down. In the United States, far more golf courses were closing each year than opening. “It’s China, China, China,” Martin said of the mood at the trade show. “That’s all anybody was talking about: China, China, China.” Meanwhile, the annual China Golf Show in Beijing was growing every year. Martin recalled when few paid the show any attention. Now, everyone was “whoring for the business.”

  China may have been a perplexing, and at times infuriating, place to build a golf course, but it also was pretty much the only place building golf courses. One representative of an American golf course design firm compared the goings on in China to the Oklahoma Land Run combined with the California Gold Rush. With so many firms going all-in on China, a helicopter here and a bulldozer there were causes for concern. Just what were the golf police going to do next?

  “I’d lose sleep trying to think about what is going to happen, because I surely can’t control it,” Martin said.

  *

  In the midst of all this confusion, China’s State Council issued a notice with far less fanfare. It seemed to acknowledge that some forms of golf development were now permitted, but only in one location: Hainan. The document, made public on December 31, 2009, entitled “Several Opinions of the State Council on Promoting the Construction and Development of the Hainan International Tourism Island” discussed openly the government’s goal “to scientifically plan, limit the total quantity of, rationally distribute and regulate the development of golf tourism under the preconditions that land use planning and urban planning regulations are adhered to, arable land (especially basic farmland) is not occupied, forests and the ecological environment are effectively protected, the legal rights of farmers are safeguarded, and land-use legal procedures are strictly abided by.” Section three of the notice was called “Exploiting Hainan’s unique advantages, and raising overall service standards in the tourism sector.” In it, the State Council outlined an official desire to “encourage the hosting of large-scale cultural performances and festive events, to enrich the performance event market, and to support the hosting of international regattas, international cycling events and professional golf tours in Hainan.”

  The notice was publicly backed up by a press conference less than a week later. It was a familiar, almost annual, routine: Hainan’s government leaders announced their latest plans to turn the island into the next Hawaii or Bali. This time, several stories followed, mostly in the state media. They talked about Hainan’s plans to “clean up” tourism and become a “tourist heaven.” They mentioned Hainan’s plans to promote “red” tourism while at the same time dabbling in games of chance, including, someday perhaps, horse racing. There was also talk of adding facilities for water sports, scuba diving and cruise ships, and offering visa-free travel and tax-free shopping.

  Buried in the print coverage was just one line about golf course development: “Asked about expanding golf courses in Hainan, Luo [Baoming] denied the province had violated China’s strict rules on building golf courses and had never used subsistence farmland to build golf courses.”

  The denial had taken place at the press conference, during an exchange between Hainan’s governor, Luo Baoming, Hainan’s Party chief, Wei Liuchen
g, and a reporter from Associated Press Television News, David Wivell. Wivell had asked Wei and Luo directly about Project 791:

  David Wivell: The central government has in recent years been urging developers not to build more golf courses, but reports say Hainan is completing a twenty-two-course project – I think it is called the 791 Project. Why is Hainan building so many? And how will that impact the environment?

  Wei Liucheng: As to golf, you mentioned building twenty-two new golf courses – I’m not really clear about it. The documents from the State Council do have one regulation about Hainan developing golf. That’s Article 3, Item 8, and it says, if it conforms to the general plan for the utilization of land, doesn’t occupy basic farmland, protects the ecological environment effectively and protects the interests of farmers under the premise of scientific planning, total control and rational distribution, the golf industry may be developed with regulation. Throughout the world, golf is an important factor to tourism, and regulated golf development is probably good for the development of tourism and the development of an economic society. But it needs to be standardized, and we cannot mess this up.

  Luo Baoming: Let me add one point. Although the State Council said in the document that we can develop the golf industry, it has very restrictive conditions. I can say this: Hainan has never developed golf in a way that goes against the general plan for the utilization of land, and golf has never taken one acre of basic farmland. With this as a prerequisite, according to our plan’s demands, we will develop the golf industry moderately and orderly and within the parameters of State Council policies. The plan regarding this aspect still needs approval from the State Development and Reform Commission and related government departments.

  One would assume that Wei, as the Party’s secretary, would be aware of a construction project the size of Hong Kong on his island. In October, ninety holes had been finished and grassed at Mission Hills, and two courses were playable. There had been talk of opening the courses to the public for limited play before Spring Festival in mid-February 2010. Some local government officials had already been spotted hitting balls on sections of the finished courses. In fact, there was one fairway in particular they used so often, workers dubbed it the “government hole.”