THE LONG ROAD TO CHINA; DISNEY REPORTEDLY NEGOTIATING PLANS FOR PARK.

Byline: Dave McNary Daily News Staff Writer

The Walt Disney Co. may build a theme park in China, but it's likely that at least a decade will pass before the entertainment giant breaks ground in the world's most populous nation.

Disney and the Hong Kong government reportedly were near a preliminary agreement to build an attraction that would open as early as 2004, according to Bloomberg News, which cited an unnamed person familiar with the discussions. Analysts believe talks between the government and the Burbank-based entertainment giant probably have taken place but were dubious about the timetable.

``China is certainly a rich and fertile market, but it won't be ready for a Disney theme park for another 10 years,'' said Dennis Speigel, head of Cincinnati-based International Theme Park Services.

The consultant, who has been active in advising Chinese park operators over the past decade, said China's economy isn't healthy enough yet to justify a large-scale theme park. ``Everyone in the world wants to have fun but they have to be able to afford it,'' he added.

Recent comments by Disney Chairman Michael Eisner undoubtedly heated up rumors. ``I am completely confident that the Chinese people would love Mickey no less than a Big Mac,'' he said in his annual letter to shareholders. ``As evidenced by the popularity of McDonald's, we could be getting close to the time for a major Disney attraction in the world's most populous nation.''

If Disney goes forward with a Hong Kong attraction, the theme park would be its third in Asia: Tokyo Disneyland  opened 16 years ago and Tokyo DisneySea  is due to open in 2001. But Speigel warned that many Hong Kong tourists are unlikely to visit theme parks during their stays.

``Hong Kong tourism is largely focused on the business community, where people are in and out - in for a day of meetings and out the next day,'' he added. ``It's a different mentality than in Tokyo.''

Bloomberg reported Disney could reach a deal within three months. The Hong Kong Daily News said the park will open in early 2004 in Tolo Harbor in the suburban New Territories and provide 12,000 jobs.

Disney spokesman Tom Deegan called the reports ``speculation'' and cited Disney's policy of not commenting on rumors.

Analyst Linda Bannister of Edward Jones & Co., who met this week with Disney executives, said Disney probably would wait eight to 10 years before opening a Chinese theme park.

Such a deal could be hampered by the high cost of land in Hong Kong, she added, so Disney might opt for a scaled-down ``regional'' facility, which could include attractions like Club Disney and DisneyQuest indoor parks.

``They are definitely interested in that market and there's a huge opportunity in that part of the world but I don't think they're jumping in with both feet,'' Bannister said. ``You're likely to see gradual introduction of Disney products.''

Bannister also said Disney is unlikely to own a Chinese theme park outright but rather operate it as a joint venture or under a licensing agreement that would pay it royalties. ``Disney's great with Imagineering but if they find a local partner who understands the culture, they're probably a lot better off,'' she added.

Disney's theme park business has been a solid performer for the past decade with Eisner pushing expansion through new projects such as the $1 billion Animal Kingdom, which opened last spring in Florida. Speigel believes Disney's discussions about Hong Kong are designed both to lay future groundwork for a project and to dissuade rivals from entering the market.

``Disney is doing the exploration we all do in this business,'' Spiegel added. ``I think they're running the flag up the pole to keep out anyone else.''

ANOTHER DISNEY PARK?

The Walt Disney Co. is rumored to be considering a theme park in China, which would be its 10th location. Others include:

Name Location Opened

Disneyland Anaheim 1955

Walt Disney World  Outside Orlando, Fla. 1971

Epcot Outside Orlando, Fla. 1982

Tokyo Disneyland Tokyo 1983

Disney-MGM Studios  Outside Orlando, Fla. 1989

Disneyland Paris Outside Paris1992

Animal Kingdom Outside Orlando, Fla. 1998

California Adventure Anaheim 2001 (xx)

DisneySea Tokyo 2001 (xx)

(xx) projected

CAPTION(S):

Box

BOX: ANOTHER DISNEY PARK? (See text)