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No Clear Wins Yet for China's Golf Development

Stocks in this article: H ELY

TAIPEI ( TheStreet) -- The LPGA will miss China for a fourth year on its Asia swing that is on its way from South Korea to Taiwan this week and en route to Japan.

The official line: Problems with the golf course scuttled events proposed in China over the past two years. China has hardly missed out on golf, however, and the LPGA expects to get the problem fixed soon, Commissioner Michael Whan told me this week in Taipei.

Still, the exclusion leads a list of rough patches along the course marking China's rise from a nation that once banned golf as bourgeois. Now some of the world's top club developers and equipment makers are watching China's growing golf markets.

Over the past few years, eager, experimental Chinese consumers have followed their Western counterparts and their own country's elite by relaxing on the green.

But golf development in China, also supported by the country's land mass, has skulked its way from the ban 28 years ago to a quasi-legal and controversial sport today. Meaning, there's huge investment potential but watch it.

With golf gingerly morphing from a rich-only sport to a middle-class one, so many courses have been built that government officials fret that fairways will displace farms. More than 600 courses operate in China today, up from 170 in 2004.

Some are technically illegal according to the country's increasingly rigid laws protecting the environment and the small villages that can be wiped out by greens spanning just a few holes. But it's China. When rich people and developers want something, they tend to get it.

The best-known course is Mission Hills, which has built two complexes in China with a third in the works. Its 216-hole course in Shenzhen is the world's biggest. An exclusive peer, the Sheshan International Golf Club in Shanghai, hosts the HSBC Championships.

More typical are smaller, private courses that function as outdoor rec rooms for swanky gated communities. For example, a 27-hole project (with a five-star hotel) called the Taiyuan Luxuriance International Golf Club is under construction in Shanxi Province.

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