A bird’s-eye view of the overall master plan for Hengqin New Area in the south of Zhuhai, South China’s Guangdong Province Photo: CFP

Position of Hengqin

 
 
It's being touted as China's answer to Orlando, a $5 billion resort and theme park complete with a mega roller coaster and a whale shark tank situated on a sleepy southern island next to Macao, the world's biggest gambling hub.

Chimelong, which is set to partially open next month, is the linchpin of China's ambitious plans to expand Hengqin into a leisure hub similar to Orlando, the coastal US city that is globally renowned for its natural attractions and theme-park resorts by Walt Disney Co and Universal Studios.

While some extravagant infrastructure projects in China have turned into white elephants, the odds are on Hengqin's side, largely due to the support of the central government and the island's proximity to the millions of tourists who flock to Macao every year.

"I don't have many doubts that it will be successful," said Philip Tulk, director of equities research at Standard Chartered Bank in Hong Kong, referring to the island, which the government designated as a special economic zone five years ago.

"The mainland people are looking for entertainment and travel options that are reasonably easy. They strongly desire new and interesting places to go to, and if Chimelong can deliver on that it will be massively successful," he noted.

The construction boom on Hengqin, just a 10-minute drive from Macao, comes at a time when mega-resorts are being developed in Asia in places like South Korea, the Philippines, Vietnam and the island of Taiwan to tap the region's growing ranks of wealthy tourists.

Most of these visitors are Chinese and many choose to stay close to home, heading to Macao, the only place in China where casino gambling is legal.

Macao welcomed almost 30 million visitors last year, but the government's plans to increase that number are being stymied by a lack of land and strained infrastructure and services.

Enter Hengqin, which is three times the size of Macao and which boasts long, sandy beaches and thick, mountainous forests.

"Macao is small and there are too many people. It needs to be expanded. Chimelong is a good complement. It is positioned as leisure tourism," said Niu Jing, director of the administrative committee, or local government, of the Hengqin New Area.

Ideal solution

Hengqin has been part of the central government's plan to develop the Pearl River Delta since 2008, and the island is being groomed as a test bed for political and economic projects between Guangdong Province and the special administrative regions of Macao and Hong Kong.

The Hengqin model also fits in with China's plans to boost consumer spending to lift the economy and wean growth away from the manufacturing sector.

Local officials say Hengqin has so far attracted investments worth 240 billion yuan ($39 billion) from companies like Hong Kong conglomerate Shun Tak, Italian luxury yacht maker Ferretti and Starwood Hotels & Resorts Worldwide Inc.

Ferretti, controlled by Chinese machinery group Shandong Heavy Industry, is building its Asia-Pacific headquarters on the island as well as a yacht club and a navigation school.

Pansy Ho, Hong Kong's richest woman and managing director of Shun Tak, calls Hengqin the perfect solution for Macao. The property-to-transport conglomerate is building a complex that will include offices, homes and a hotel on the island.

"We need to work on a plan to assimilate and to make sure that in the future, Macao will be in the center of things but also integrated with the development and the future of the whole Pearl River Delta," Ho, the daughter of Macao gambling godfather Stanley Ho, told Reuters.

The government has banned gambling on Hengqin, but that has not deterred Macao's billion-dollar casino operators. Galaxy Entertainment is considering investing in sports stadiums, golf courses and a marina on the island to complement its Macao casinos, Francis Lui, deputy chairman of Galaxy Entertainment, told Reuters.

"The customers want a bigger and bigger experience... and in Macao, we just don't have the land and it would be too expensive," he said. "So Hengqin is going to be very important for us."

Looking to the future

Hengqin is connected to Macao through two underwater tunnels. By 2016, it will also be linked to Macao in the east and Hong Kong to the north by a bridge. Rail services will also be extended to Hengqin.

Forests of cranes and scaffolding jut out from pockets of Hengqin as companies like Zhuhai Huafa Group and Shimao Property Holdings Ltd race to develop the island, where wooden stilt houses still dot parts of the shoreline.

Property prices have soared, with new houses near the central business district costing more than double the amount per square meter than in the nearby Zhuhai.

Palm-fringed, six-lane highways line the island while residential high-rises are cropping up as the pace of construction has picked up in the past year.

Home to fewer than 8,000 people now, officials forecast the island's population will rise to over quarter of a million in seven years' time.

The marine-themed Chimelong resort, headed by Chinese businessman Su Zhigang, is the biggest project to open on the island this year. Its coral-hued towers, topped by blue onion-domes, will house 1,880 hotel rooms, a conference center, a spa and an indoor water park.

Macau University, which finished construction of its Hengqin campus in July this year on a site 20 times larger than its Macao location, will welcome students in February 2014. The university, which can accommodate up to 15,000 students, will be operated under the laws that govern Macao, and not mainland regulations.

Major lenders such as Bank of China, Bank of Communications and Agricultural Bank of China have set up temporary offices in Hengqin's central business district to help drive its development.

The island is also hoping to lure business with tax breaks and new financial policies that include allowing companies to develop offshore business in foreign currencies and piloting the exchange of the yuan, Macao pataca and Hong Kong dollar.

"The special thing about Hengqin is that it is a naturally isolated island, so the risk is controllable," says Hengqin's Niu. "Hengqin, without exaggeration, is unique."