On March 30, China’s National Development and Reform Commission ordered the immediate closure of 66 golf courses across the country — the first sign of follow-up on a 10-year moratorium on new courses that a report by Beijing Today describes as “an admission of the failure” of that ban. During the past decade, instead of declining, the number of golf courses on the Chinese mainland exploded from 178 in 2004 to 528 in 2013. How did that happen in the face of a government crackdown?

The reason for a surge in new golf courses during a moratorium on exactly that appears to be connected to the lure of land sales.

In “Chinese golf built for face, not for fun,” by Lynne Wang for Beijing Today, a Shanghai golf club manager speaking on condition of anonymity said:

“Rolling golf courses into real estate projects is how Chinese golf makes money. No one cares whether anyone plays because the nearby real estate projects already allow the golf operators and real estate developers to make quick money.”

According to Beijing Today, growth at 10.3 percent a year in China’s golf industry, since the State Council banned new golf projects in 2004, coincides with a real estate boom and that “overlap is no mere coincidence.” Speaking to Beijing Today, Liu Shouren, executive dean of the Golf Rules and Culture Research Center at China University of Politics and Law, said course operators have been able to circumnavigate the necessary central government approval for new golf projects by representing these undertakings as “parks, ecological gardens and tourist resorts”. Projects of this type only require local or county-level government approval, says Liu, and also benefit from “steep” discounts on the price of land because “agricultural” projects enjoy preferential pricing. That’s a win-win for all involved, says Liu: for the golf operators, real estate developers and local officials, whose career advancement is tied to boosting GDP through land sales.

An editorial by Economic Information Daily, cited by Beijing Today, said the “illegal golf projects significantly boost tax income, employment and local tourism – all of which ensure personal promotion.”

Faux GDP-maximizing construction and development projects have been responsible for a number of China’s development fiascos, including its ghost cities, malls and theme parks, as well as a bizarre burst of mountaintop surgery as land creation strategy. [See: China flattening mountains to build more ghost cities?]

In the past, GDP growth represented the Party yardstick for appraising local officials’ success; a performance measure that culminated in local-level liabilities and a rapid rise in local government debt. In late 2013, the central government moved away from GDP-obsessed assessments to prioritize fiscal discipline and other concerns, such as the environment.

No reason has yet been given for the closure of the 66 golf courses. [See: China closes 66 ‘illegal’ golf courses].

Related Reading

China’s golf mania grows

Golf courses proliferate in China, defying gov’t ban

Beijing building golf courses despite disastrous droughts

Beijing’s golf craze

Golf clubs told to save water