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China’s Ski Industry

Although Skiing and China may not be the first word association to come to mind, China’s ski industry is growing. Ten year’s ago it was estimated that 200 people in China had skied. Today over a million people are estimated to have skied at least once. Although skiing has in no ways reached the popularity levels in the West, more and more young Chinese, especially those in big cities and with high-income levels are taking up skiing. Having skied is becoming a symbol of a modern outlook for young urban people. Chinese business managers as far away as Fujian and Zhu Hai, not to mention Shanghai and Hong Kong, ski regularly.
Skiing in China and elsewhere is a money-consuming sport and its development relies significantly on the wealth of the people. After over 20 years of double digit economic development, the personal income of Chinese people has risen considerably. By the end of 1999, per capita disposable income of urban residents reached 5,854 RMB (approx US$710) or 3.6 times that in 1978. The income of the top ten percent of residents in the country averaged 12,148 RMB (approx US$ 1,475). The income of rural families grew even more markedly – up 4.7 times from 1978 and some 12 percent of rural households enjoyed an annual income over 4,000 RMB. At the same time, the total savings deposits of Chinese residents topped 5,962 billion RMB or 4,735 RMB (approx US$575) for each person. Because of this growing wealth, leisure tourism including skiing is becoming increasingly in reach of more and more Chinese.

Most individual visitors to China’s ski resorts are self-paid tourists who come from Beijing, Shanghai and other big cities in the north or middle part of the county. In a recent survey in Beijing, seventy-four percent of young people between the ages of 18-40 expressed an interest in skiing soon at one of China’s ski resorts. The figure was 57 percent in Shanghai. Most of the actual skiers as opposed to those with interest noted above tend to be young, generally well educated and with generally relatively high annual income above 50,000 RMB (Over US$6,000). If a ski area is named, Yabuli Ski Resort, which is China’s best known resort, is named most often.

An analysis of China’s Ski areas and their strengths and weaknesses are shown below:
 

Resort
Strengths
Weakness
Yabuli Ski Resort
Heliongjiang Province
www.YabuliSkiResort.com
China’s Premier Ski Resort
170 day average snow coverage
Still limited facilities
Compared to western ski areas
Beidahu Ski Resort
(North Grand Lake Ski Resort)
China’s No. 3 ski Resort
Closer airort – 56 km to Jilin
No quality hotels insufficient facilities
Jingyuetan Ski Resort China’s No. 2 ski area
Located close to Changchun major urban area, capital of Jilin Province
Snow not as good as Yabuli – short season
Changban Mountain Ski Resort Major training base of Chinese National Team near Yanjin City
Has hot springs in area
Little infrastructure
Songhua Lake Ski Resort Close to Jilin City
Good Scenery
Temperature higher than Yabuli – Snow for less of the season
Saibei Ski Resort Full Service Facility 260 Kms from Beijing
Less Snow Coverage
Saihanba Ski Resort Well-know tourist attractions nearby 340 Kms from Beijing
Less Snow
Yulong Snow Mountain
Ski Resort
Only Ski Resort in Yunnan Province
Soon will have Int’l Airport
Under Construction
Great Wall Ski Area Near Beijing Little to no natural snow
Short runs – under construction

From the above information, we believe that the ski industry in China will continue to progress. Currently virtually all of the ski equipment is imported into the country. Yabuli has purchased over 700 complete sets of skis, boots, poles, ski clothing, etc. from Switzerland and promises to purchase an additional 2,200 sets in the years ahead. Other resorts are looking at similar purchases although often being more economical on price and quality. As China’s numbers of skiers grows, more incentive will exist for development of a ski equipment industry in China.

Ski resort statistics on actual usage are still relatively scarce in China. Yabuli Ski Resort has the highest documented visitor levels and last year received 110,000 visits. Average skiers on a weekend is 400 skiers per day with the numbers of visitors peaking at several thousand a day during the spring festival. Other ski resorts see similar or lesser usage although over a much shorter season due to limited snow and lesser ski runs and other facilities.

Of all the ski resort in China, Yabuli, in our opinion, will continue to maintain its lead as the premier resort. This is because the resorts geographical position and climate give it the best snow within relatively close distance to major population areas. The central and provincial government has continued to support infrastructure development in the region. A 26-seat Helicopter service using quite reliable Russian-made helicopters is currently available from Harbin airport for a price of slightly less than USDols 200. Other arrivals are through either the airport in Mudanjiang or Harbin with further transport by land or by arrival by train. Government approval for an airport, acquisition of the property and securing of all necessary permits, etc. has been already completed and is only awaiting actual construction which would take less than a year. With this airport in place, direct tourist arrivals could be arranged daily from Shanghai, Beijing, Hong Kong, Korea and Japan which would really make the area boom.

No statistics currently exist for all arrivals at China ski areas in 2000. Tourist arrivals, however, at Yabuli last year were approximately 110,000 times and are projected to grow to in excess of 500,000 times by 2010. Although this figure demonstrates significant growth, the figures are based on UNIDO estimates and are realistic.

For a ski resort to successfully compete nowadays, it must transmute itself into an all year resort location with both summer and winter attractions. Other resorts in China are attempting to make this alteration. Yabuli is making this transition while also attempting to protect the environmental diversity that makes it such an attractive tourist destination. In addition to the current 600 meters vertical drop of its ski runs, which could be easily expanded with limited investment to 900 meters, Yabuli has the most challenging ski runs in Northern China. In addition, its highly attractive dense forest, beautiful scenery and rich animal and plant resources make it an ideal place for spring, fall and summer tourism. Although this side of the resort is still in its infancy, we see great opportunities for growth here as well.

China’s ski industry is growing and growing rapidly. The ski industry remains a capital intensive and long-term investment industry but the profit potentials over long periods tend to be quite large as the cost of creating facilities and the limited geographic and climatic factors limit the alternatives. With these considerations in mind, the relatively close pools of skiers in Korea and Japan only a short flight away and the booming demand for in-country tourism, China’s ski areas, particularly Yabuli Ski Resort, represent an attractive investment for those with a more long-term outlook.


About the Author:

Christopher W. Runckel, a former senior US diplomat who served in many counties in Asia, is a graduate of the University of Oregon and Lewis and Clark Law School. He served as Deputy General Counsel of President Gerald Ford’s Presidential Clemency Board. Mr. Runckel is the principal and founder of Runckel & Associates, a Portland, Oregon based consulting company that assists businesses expand business opportunities in Asia. (www.business-in-asia.com)

Until April of 1999, Mr. Runckel was Minister-Counselor of the US Embassy in Beijing, China. Mr. Runckel lived and worked in Thailand for over six years. He was the first permanently assigned U.S. diplomat to return to Vietnam after the Vietnam War. In 1997, he was awarded the U.S. Department of States highest award for service, the Distinguished Honor Award, for his contribution to improving U.S.-Vietnam relations. Mr. Runckel is one of only two non-Ambassadors to receive this award in the 200-year history of the U.S. diplomatic service.


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