china_golf_course_constructionIt’s impossible to report on China from Brooklyn. Things change so randomly and rapidly there that you really have to be in the thick of it to try and make sense of anything (and even then you feel as though you are only scratching at the surface of the truth). So, when I left China after nine years in 2011, I for the most part gave up the China beat. I had a new full-time job, and anyway, I was living on the other side of the world. Now, it’s true that I wrote most of my China book from New York, but the bulk of the research had already been conducted and the storyline spanned (roughly) 2004 to 2010, a time period in which I called China home.

When The Forbidden Game came out this summer and I began doing media appearances and book events, people understandably wanted to ask me about the current state of things in China. Were golf courses still banned and booming? I hadn’t set foot in China for three years, but I wanted to be able to answer these questions truthfully and intelligently, so I had tried to keep my ear to the ground. It wasn’t easy. I had a job, and book to finish, but I attempted to stay on top of things the best I could. Because of my earlier work, I was still known as “the China golf guy” — admittedly a confusing title for a non-golfer — and I was confident no other journalist would be better equipped to take on questions of this kind. Still, I can say now that in those early interviews I got some things wrong.

When people would ask me the current state of the golf course construction industry in China, I would usually say something to the effect of, Things may not be booming the way they were four or five years ago, but it’s clear China — where building golf courses has been illegal since at least 2004 — is still building more golf courses than anywhere else in the world. If people in the golf course construction industry aren’t working in China, they probably aren’t working much at all. And that was true based on the most recent information I had.

Then, in early October, a China golf industry friend sent me the following on Facebook: “Huge crackdown this year on courses. None being built and 100 being closed. Hasn’t been anything building for a while.” He said the crackdown was “linked to the overall political landscape.”

Later I heard from someone who had just returned from the annual meeting of golf course general managers in China. “The word has come down that Beijing will close 90 courses to show face about being strict on golf,” he reported. “No mention of which golf courses will be closed, but no one seems to be that concerned.”

It’s true that I heard many such rumors during my time covering the golf industry in China. Rarely did they come to fruition. Sure, there were almost constant “crackdowns” on golf course development, but they were isolated, and with varying degrees of severity. The only thing you could truly count on is that there’d be more golf courses built each year. Lots of them.

But during my recent two weeks in China, I encountered more pessimism and uncertainty from those in the industry than ever before. Everyone quoted the rumor that up to 100 courses would soon be shut down, a process that perhaps got kickstarted with the closure of a handful of courses this summer. Beijing then, as it had a handful of times over the previous decade, reiterated its oft referenced but rarely enforced ban on golf course construction. It did so again just this week. Things do appear to be ratcheting up.

What to make of it? Who knows. Maybe this is truly the end of the boom. Maybe it’s just another bump in the road. Either way, it seems a good time to share with you a recent email I received from a China golf course industry veteran. He sent it prior to my China trip, and now that I’ve returned, it really rings true. He gave me permission to publish his unvarnished views anonymously.

It is very hard for anyone to understand and properly comment on the golf industry in China or any other business there. China has always been a massive enigma and very difficult to pin down for a variety of reasons. What appears to be true today will not be true tomorrow and this is why most foreigners have difficulty there. We like to have clear rules and black and white boundaries. Asia is not put together that way and never will be.
 
I have been working there continually for nearly 30 years and much of it still remains a mystery to me. Most of what people continually hear in the media that is going on, especially in the foreign press, is not true, half true, and exaggerated for their ears.
 
From where I sit today, however, the golf industry in China is currently in a full stop mode. There are not hundreds of projects shut down and stopped, because there are not that many actual projects underway, but there are a large number of projects not moving ahead anymore or being reevaluated. There are 12 courses around Beijing which have been either closed or forced to stop operating because of lack of proper land use permits.
 
The current problems with golf in China right now are threefold:
 
1. The government is enforcing much more strictly the 2004 rules governing golf development and they now have satellite technology to monitor what is happening throughout the country.
 
2. Due to much more strict bank lending rules it is very difficult to borrow money for development projects, therefore more developers must use their own cash which few have access to. At the same time, the real estate industry is in a decline due to poor worldwide economic conditions and similar tougher lending regulations for real estate properties.
 
3. The government has finally begun to focus on their severe water shortages, especially in the north in and around Beijing, and this is a massive problem which they have no solution for currently … and golf is an easy target.
 
Golf in China currently has no advocate like it does in the USA and elsewhere. And golf is not the massive problem it is made out to be in much of the media in recent years — it has done a lot of good in many regions as I have witnessed. I do acknowledge however that in the last five to eight years issues relating to golf development have got completely out of hand there.
 
Therefore, things are not going well for golf these days in China and most developers are sitting on their hands and waiting. I do not blame them. While a few projects continue to sputter along, most will go nowhere anytime soon. I have a few things still ongoing but there is zero urgency for completion at this time. Everyone keeps talking about new policy coming down next year to clarify things, however I do not believe this will happen anytime soon because being ambiguous right now works to the central government’s advantage.
 
The Chinese central government is consolidating power and has bigger fish to fry than the golf and real estate development industry. Yet millions will go unemployed if this is left to flounder too long.
 
As for the rest of the world, there are a few projects here and there and that will remain the case for the foreseeable future, mostly user and resort-driven and some remodeling work, especially in the US, but the days of the big golf boom are over.
 

 
Things (in China) have been shut down since early this year. It has just taken awhile for the word to spread around. Some have tried to proceed anyhow, but with all the political power consolidation from Beijing it is now way too risky unless you are in tight with the new regime. Big time golf development is absolutely over in China for the foreseeable future.
 
So a few designers still have a few things going on there, but if you scratch the surface deep enough you realize they are really only treading water for things to improve. There is zero impetus to move ahead with speed, especially with a lousy real estate market most everywhere right now.