On a tour of the old section of Beijing last year, Walt Disney Co. President Bob Iger found himself in unexpected quarters.
An elderly woman cleaning windows along a narrow street had invited him and his assistant into her two-bedroom apartment for a cup of tea.
As he sipped his tea, Iger noticed a stack of Disney books on top of the woman's refrigerator.
"She said they were for her grandson," Iger said. "It was a seminal moment for me."
Iger recalled the tale recently, fresh from another trip to China, where he and Disney Chief Executive Michael Eisner met with top leaders on a mission to expand Disney's business interests there.
The trip cast a spotlight on Disney's plans for a possible second theme park in China. It also coincided with other ventures, including the launching of the company's first Chinese-language Web site, signaling the company's growing interest in the world's biggest untapped market.
"Enough development has already occurred for us to view China as an incredibly important market for the Walt Disney Co. and a great opportunity," Iger said in an interview. "It could evolve into one of our most important markets."
Disney is hardly alone in seeing gold in China, which is on the verge of entering the World Trade Organization. News Corp. and AOL Time Warner Inc. announced this month that they were close to a deal that would allow them to broadcast programming to homes in parts of southern China. And Viacom Inc.'s MTV cable channel has had a presence in China for several years.
For American business, the allure is clear: China is a vast market of 1.3 billion people with a vibrant economy--one that grew 7.5% last year--and a rising middle class.
Mickey Mouse and China would seem to be a perfect pairing. China has a huge middle class that is hungry for the kind of wholesome, apolitical family entertainment that is Disney's trademark.
And, after years of nurturing ties with China, Disney has something of a head start over its rivals. The piracy of Disney products in the 1980s and 1990s has helped to make Mickey Mouse and Donald Duck household names in much of China.
"Walt Disney's future in China can be extremely promising. The market opportunity is there for the taking," said Desmond Wong, a partner at Ernst & Young who advises Western clients on investing in China. "There's no domestic competitor anywhere close in magnitude in brand recognition. Generations of Americans grew up on cartoons in the Walt Disney library that will be relatively new material to generations of Chinese kids."
