SHANGHAI — After five years of construction, Shanghai Disneyland will be inaugurated on Thursday with much fanfare. And with the arrival of China's first park from the American entertainment conglomerate, many Chinese players in the theme park business are asking if the proverbial "wolf has really come" this time — dressed as Mickey Mouse.

But there are signs all around that the industry remains bullish. Most recently, Wanda group, China's largest property developer and the world's biggest cinema chain operator, opened a cultural tourism hub on May 28 in Nanchang, about 700 kilometers (435 miles) from Shanghai.

Within the last few years, more than 300 theme parks have been built across China. Last year alone, 21 new parks were inaugurated while another 20 are undergoing construction.

As a survey conducted this year by Guotai Junan — one of China's largest investment banks showed — Shanghai Disneyland will attract more than 12 million domestic and foreign tourists annually. With a weekday admission fee of 370 RMB ($56) per person, this means an annual total of over 4.4 billion RMB ($667 million) of ticket sales. Meanwhile, boosted by an estimated increment of 1 RMB driving 8 RMB, in tourist-related business such as transport and hotels, the single Disney park will bring about 35 billion RMB ($5.3 billion) growth for the whole tourism industry.

With the construction of the Universal Studio theme park broke ground last November in Beijing another American giant is scheduled to open in 2019. It is expected to generate just as many visitors as Disney.

Liu Daoqiang, chairman of Fantawild, a local cultural and scientific park company investing in new locations, does not see a zero-sum game with the Americans' arrival. "The entry of McDonald or KFC didn't stop us eating Hunan or Sichuan cuisine," Liu said. "It just means people have more options."

With aims of becoming the world's top tourism enterprise, and indeed considered a serious rival to Disney, Wanda's medium-term target is to open up to 15 new locations within China for Wanda City, a type of diversified mega complex that combines entertainment, shopping, catering and luxury hotels — as well as three to five abroad by 2020.

Fantawild has already achieved Wanda group's goal by operating 20 small and big theme parks in China. They welcomed 23 million visitors in 2015, a year-on-year increase of 77.4%. Fantawild wants to open 40 parks within the next five to 10 years, and to own at least five theme hotels in the next three years.

Dai Bin, president of the China Tourism Research Institute confirmed that Chinese demand for leisure and travel is increasing. The risk of a glut of theme parks is offset by a "herding effect" among those visitors who draw others.

According to the US consulting firm AECOM's forecast, China's tourism market is worth $610 billion. This number is expected to double by 2020, with the country eventually surpassing the United States as the world's largest theme park market.

Taking on Disney

Whether in terms of project positioning or choices of sites, Chinese theme parks take a different path from that of the American giant: They are mainly counting on the number of entries, lower admission fees, scale consumption, and the virtue of their local advantages.

Most Chinese local theme parks are located in second, third or even fourth-tier cities. Apart from the consideration of land cost, it's also to offer a taste of the exotic. "If the parks are too close to home, people think it's just like doing your daily errands," explained Liu Daoqiang. "You've got to let them drive two or three hours and make them feel like they're having a travel experience."

Chen Huijun, vice president of Fantawild, believes that Disney's advantage does not lie in the technology of its park offerings, but rather on its animation brands. Chinese local parks lack the intellectual property and content base of both Disney and Universal Studios.

But Chinese theme parks are trying to catch up by copying the same business model. Fantawild's series of three films, Boonie Bears, have created some recognizable cartoon images that have since been presented in the parks and "gave birth to numerous derivatives," Chen Huijun pointed out.

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Boonie Bears — Source: Fantawild Holdings

Fully integrated fun

Despite the vigorous investments in theme parks, some worry the bubble will burst nevertheless. According to a study published by the Prospective Industry Research Institute, 70% of Chinese parks currently operate at a loss. Some 20% break even, while only 10% make profits. The fundamental reason is that theme parks require huge investments, while the payback period is particularly long.

Liu Daoqiang says foreign theme parks operate very differently. They adopt a joint-venture model and most often the asset-heavy side lies on the local government or the firm they cooperate with. In Liu's opinion, Disney's investment of 36 billion RMB ($5.5 billion) is mostly about branding.

As for Wanda, the Chinese giant is relying on its own diversified upstream and downstream industrial chain. Thanks to its vast hotels and resorts across China, Wanda has formed its own scale and brand advantages. In the past three years, the group has also acquired more than 13 of China's top online and offline travel agencies to ratchet up its sales channels.

By comparison, some are convinced that Wanda has a more extensive profit resource and potential than Disney thanks to the massive amount of properties it owns, its integrated tourism as well as land development.

Counting on government subsidies

At the same time, as this newspaper learned, major Chinese theme parks all receive generous government subsidies. Take Fantawild as an example: From 2013 to the first half of last year, it received more than 5 billion RMB ($758 million) in subsidies from the government. Meanwhile, preferential fiscal policy also indirectly helps these companies' profitability. Tax incentives accounted for 12.96%, 19.16% and 19.91% of Fantawild's net profits, respectively over the past three years.

Chinese authorities attach great importance to fostering the cultural industry, and have set up a large number of special support funds in recent years. Meanwhile, local governments are eyeing how theme parks can create employment and stimulate local consumption, which in turn contributes to local economic development brought about by the same theme parks. Mickey would be proud.