"This is just the start," says David Chu, developer, owner and chairman of Mission Hills Golf Club in Guangdong, who commissioned Annika Sorenstam, the world's No. 1-ranked woman golfer, to design her first course on his land near Hong Kong. "Golf has more growth potential in China than in any other part of the world."

That's partly because China's economy is growing at an annual rate of 8.5 percent and a rising percentage of China's 1.3 billion people have become smitten with the game.

Today, golf is China's "green opium," says Ye Hong, owner of the Beautiful Pines club in Beijing. Developers already have spent $4 billion during the past 20 years to make China the fifth-biggest golf-playing nation — behind the United States, Japan, Canada and the U.K., says Ramlan Haron, executive director of the Malaysia-based Asia Professional Golfers Association.

"Everywhere I turn" in China "they are just building golf courses," he says.

Nike Inc. and Adidas-Salomon AG, the world's top two sporting-goods makers, are targeting the country's domestic market even as they manufacture clubs in China for export. China is the leading exporter of golf equipment, accounting for $858 million of the $2 billion market last year, according to the Golf Research Group, a golf business consultant with offices in Dallas and London.

Celebrity-designed links

Chu, a 53-year-old Hong-Kong-born businessman, says he spent $120 million to buy 7.7 square miles of land for Mission Hills and $267 million to develop it.

By next year, he plans to make the club, which opened in 1993, the world's biggest by courses — 180 holes on 10 celebrity-designed links. The current leader is 107-year-old Pinehurst in North Carolina, which has eight courses.

He's already more than halfway there. Sorenstam visited China for the first time Nov. 2 to check her design, the sixth course for Mission Hills.

"I'm very proud of the course — super condition and a beautiful facility," Sorenstam said last week.

About 100 million people, including 7 million in Hong Kong, live within two hours' drive of Mission Hills, Chu says. Annual membership fees range from $45,000 to $141,000, capped at 1,500 members for each private course.

'Oriental Swiss-style living'

"Property will become one of the biggest earnings contributors," says Chu, who calls his course-hugging villas and apartments "Oriental Swiss-style living."

About 70 percent of China's courses are in high-income areas such as Beijing, Shanghai, Guangdong and Fujian, the China Golf Association says. China has 210,000 millionaires in U.S. dollar terms, according to Cap Gemini Ernst & Young's 2003 World Wealth Report. Average annual income in urban areas last year was $930, and in rural areas $299.

Most developers are from Hong Kong and Taiwan, often in partnership with provincial governments, says the PGA's Ramlan. "I haven't heard of any courses owned by Americans or Europeans," he says. "It's powered by the local population."

Once viewed as decadent in communist China, golf began to be seen as a means of attracting foreign investment after president Deng Xiaoping opened up the country in 1979.

A Hong Kong businessman built the first communist-era course, designed by Arnold Palmer, in 1984 in Guangdong.

At the Beautiful Pines club and driving range in Beijing, local Chinese account for 80 percent of customers, up from 20 percent when it opened three years ago.

Social status

Beautiful Pines owner Ye Hong says locals have taken to the game much faster than she expected. "Their purpose is both business and social," Ye says. "It's also a social status thing."

Zhang Wei, the manager of a building materials factory in Shenzhen and a Mission Hills member, says a business associate introduced him to golf three years ago.

"I get a lot of business done on the golf course," said Zhang, 43, who had just finished a midweek game. "After all, doing business in China is all about trust and relationships."

International success has helped the game prosper. Two years ago, Chu brought game icon Tiger Woods to China for the first time. Woods held a clinic for leading Chinese professionals, including Zhang Lianwei.

Zhang, 38, a self-taught golfer, recently won the Asian PGA's China Open in Shanghai. In January, he beat former world No. 1 Ernie Els by one stroke to win the Singapore Masters, a European Tour event.

Ups and downs

A former javelin thrower, Zhang said he started playing golf to challenge himself. "But there are great difficulties, including visa, language, transportation and finance," he said.

Outside China, golf is stagnating. More than 900 courses were built worldwide in 1991-1992, according to Golf Research. Last year, fewer than 300 were built.

A decline in the popularity of golf in the United States is forcing lower prices for courses and foreclosures, Barron's business magazine reported in July.

In Japan, U.S. investment companies Goldman Sachs Group Inc. and Lone Star Funds acquired Japanese courses, owing a total of $20 billion, at a rate of two a week last year.

Equipment makers are also affected. Spalding Holdings Corp., a Massachusetts-based sporting goods maker, filed for bankruptcy in June, listing less than $1 million in assets and $100 million in debt.

As a result, the golf industry is heading to China. Arnold Palmer, now designing a course in Beijing, says China reminds him of Japan, where he's mapped 19 courses.