The Shanghai municipal government finally announced yesterday that the National Development and Reform Commission has agreed to cooperate with the Walt Disney Co to build a Disney theme park in the city.

Word about the Shanghai Disney project has been circulating for quite some time, and the Hong Kong community has been watching the development closely all along.

The reason for Hongkongers' anxiety is not hard to understand - it seems that the SAR, already having a Disney theme park, would stand to lose should Shanghai build another one.

Now the rumor becomes a reality, the "wolf" has come, but the local community has generally remained calm.

Hong Kong was the first city in the Greater China Region to build a Disney theme park, reflecting the central government's special care for the SAR. Since its opening, Hong Kong Disneyland has lured a large numbers of local, mainland, Taiwan and foreign visitors, and the park is in the process of expansion.

On the other hand, Shanghai is the biggest city on the mainland. It is also the core city in the Yangtze River Delta (YRD), an affluent region with the most well developed economy in the country.

Building another Disney theme park there represents the company's hope to tap into the huge China market, and could fulfil the entertainment needs of mainland residents, especially those residing in the YRD region.

It is also a key project that could stimulate the economic growth of Shanghai, which is busily preparing for the World Expo 2010.

Through the two major projects of Expo and Disney, Shanghai could expedite its economic transformation and thereby set an example for Hong Kong.

That Hong Kong needs an economic restructuring is a general consensus here. But the community has yet to arrive at a general agreement as to how to do it.

The SAR can no longer rely solely upon the property and financial markets to prod the economy forward. It must augment its economic base.

As a matter of fact, the city has huge advantages in such service industries as conventions, exhibitions and diversified tourism. The government and society must from now on acquire a sense of urgency in transforming the SAR's economy.

Hong Kong Disneyland should not be treated as a tourist attraction on its own. It is closely connected to the city's role as a regional shopping and tourist hub. Visitors to the park, be they from the mainland or overseas, also shop and go sightseeing in other parts of Hong Kong. This ought to be taken into consideration.

The new park in Shanghai, when complete, certainly will draw visitors from Hong Kong as well as from other places. This competition should stimulate Hong Kong Disneyland into constant innovation in order to protect its source of visitors.

Given China's huge population of 1.3 billion and the continuous growth of its economy and per capita income, two Disney theme parks are not too many.

I actually believe that the possibility of having a third Disney theme park in northern China cannot be ruled out.

The author is a commentator of the Phoenix Satellite TV

(HK Edition 11/05/2009 page1)