Everyone wants a piece of the Chinese president, with theme park operator Merlin Entertainments unveiling plans today to expand in the Middle Kingdom as part of Xi Jinping’s right royal state visit to the UK.
The FTSE 100 company is opening a Legoland in Shanghai as part of a joint venture with China Media Capital (JVs being increasingly compulsory for western firms wanting to enter successfully Chinese market). It already has four Madame Tussauds across China and the Chang Feng Ocean World aquarium in Shanghai and had announced three other new openings for the next 18 months.
Now, as part of this deal, Merlin is aiming to roll out other Dungeon and Legoland-themed attractions and new brands like Kung Fu Panda Adventures, based on DreamWorks’ animated film (one would hope its local partner knows how to sell a western version of Kung Fu to the Chinese).
The tie-up will be ‘proudly announced’ at a UKTI event today attended by Xi and the Duke and Duchess of Cambridge (aka Wills and Kate). Seems like the president can’t go anywhere without a House of Windsor entourage, after his carriage ride with the Queen and state banquet last night. And now businesses like Merlin and others (today including BBC Worldwide, Aston Martin and London Taxi Company owner Geely) get to ride on those royal coattails.
Can Merlin sell Kung Fu to the Chinese? Credit: Dreamworks
‘China is a key growth market for the Group and we see this partnership as providing a significant opportunity to accelerate our plans,’ Merlin chief executive Nick Varney said. ‘By working together in partnership we will be able to combine our expertise in operating world-class attractions with CMC’s insight and expertise in the Chinese market.’
He must be relieved to be able to talk about positive new projects, rather than the rollercoaster crash at Alton Towers in June, which led to two people having a leg amputated. Investors breathed a sigh of relief too: shares were up more than 4.5% to 388.4p in mid-morning trading, having sunk 18% in the last six months.
It’s also a nice break for both governments, which had been dogged by questions over the security of Chinese investment in British nuclear power and the ‘dumping’ of cheap Chinese steel amid UK job cuts. And China has long wanted to boost consumer spending to shift its dependence on manufacturing and exports.
Merlin, for its part, may be bedevilled by the slowing Chinese economy. But even growing at around 7% (at least officially), there’s no doubt the country still holds huge opportunities - as long as the locals own a significant slice of any foreign investment, so they can share in the upside if it succeeds. David Cameron and co may want to reflect on that as they so cravenly pursue Chinese investment in UK infrastructure this week.