Louis Vuitton, Aston Martin, Prada: the Chinese are keenly attracted to exclusivity. But soon, perhaps, the prize for most exclusive Chinese product will not go to goods like clothing and accessories. Instead, the honor may go to an activity: Golf.
The United States, population 307 million, is home to 15,890 golf courses. The People’s Republic of China, population 1.3 billion (more than four times that of the U.S.), is home to less than 650 golf courses—and of those, only ten are government-approved. Nevertheless, the golfing industry netted over $927 million in 2009.
Unfortunately, the limited number of Chinese golf courses—intentionally restricted by the government—prevents a significant percentage of the estimated 20 million potential Chinese golfers from participating in the sport. And with such a huge potential market, Chinese golf courses have the upper hand. The result? Super-exclusive golf course membership.
Many golf courses in China are located within a community of luxury villas. Membership can be obtained only by purchasing an expensive villa—property priced at about 5,000 yuan per square meter ($773). As a comparison, the average cost of real estate across China, for non-luxury homes, is about 3,000 yuan per square meter. According to Renmin University professor Yan Jinming, these real estate sales are a way for many golf courses to make a profit.
In that case, it seems as if the construction of new golf courses—including clubs or public courses—would be a further boon for China’s economy. The government, however, has different concerns. In 2004, the Chinese government put a moratorium on golf course construction in an effort to preserve arable land.
“Authorities in less developed areas are facing a dilemma between urban construction and land protection,” said Li Jianqin, head of the law enforcement branch of the Chinese Ministry of Land and Resources. Land management experts are concerned about a shrinking inventory of farm-worthy land as the nation moves toward greater urbanization and consumerism.
But the government is not keen on standing in the way of growth. According to Li, golfing regulations are on the agenda for discussion at the Ministry of Land and Resources as well as the other 11 government departments with a stake in the issue. For now, however, golf remains an exclusive activity for luxury consumers.