Industry officials estimate at least seven amusement or water parks, foreign-invested and home-grown, have gone bust in Shanghai because of lack of funds, poor planning and fierce competition.

Shanghai has 80 registered amusement parks, though most are small, city officials say. The only two large theme parks remaining are Jinjiang and Tropical Tempest, a foreign-invested water park.

Disney has a preliminary deal with Shanghai for a park, but sources say more negotiations are needed to bring the Magic Kingdom to the city. Disney will not confirm or deny if it has signed an agreement.

Hong Kong, Taiwan and United States investors reportedly poured millions of dollars into American Dream, designed and managed with the help of US-based International Theme Park Services.

Behind locked yellow gates, the Whirling Dervish ride has stopped whirling, the Merlin Magic Theatre has all but disappeared and the Pony Express Carousel has been put out to pasture.

Ticket booths are boarded up, a parking lot the size of a football field stands empty and weeds sprout at the project which once sprawled over more than 30 hectares.

A waitress at the Dream Seafood Restaurant just outside the park, Wu Zheng, said: 'It closed in October last year. Business was bad. They have already taken all the equipment away.'

Officials from International Theme Park Services in Cincinnati, Ohio, could not be reached for comment.

A security guard wearing an American Dream blue uniform denied the park had gone bankrupt, saying it is closed for renovations.

However, the paint peeling off Grand Station and the decaying artificial mountain from the roller coaster say otherwise.

As others have come and gone, the grandfather of them all - Jinjiang Amusement Park - is still going strong after 18 years.

Jinjiang attracts about 600,000 visitors a year, off a peak of more than two million in the mid-1990s, with annual turnover of 40 million yuan (about HK$37.59 million), officials said.

Hotel operator Jinjiang Group set up the park with an initial investment of US$3.1 million. Owners boosted investment for expansion, including adding what is billed as China's biggest ferris wheel.

Jinjiang is helped by a location within the city and an underground stop, important in a country where private car ownership is small.

American Dream is more than 20km outside the city centre in the Jiading district accessible only by car or special tourist bus.

Jinjiang offers various types of tickets: 10 yuan for a small child, 30 yuan for two rides and 60 yuan for eight rides.

American Dream initially asked 100 yuan for an adult ticket and 80 yuan for a child, though that included most of the 30 rides in the park.

Shanghai officials have offered the town of Huanglou, well outside the city in the Pudong development zone, as a possible location for the Disney park. A planned magnetic levitation train link to the Pudong airport and a four-lane highway are nearby.

Shanghai International Studies University economics professor He Jianmin said Disney would have to set ticket prices which are affordable for mainland residents.

'If Disney wants to succeed it has to reduce costs so ticket prices will be low enough for the local market,' he said.

Last year, China's average urban income was about 570 yuan a month.

But Hong Kong fears lower ticket prices in Shanghai will draw mainland visitors away from its own planned Disney park.

Jinjiang expects the Disney park to cut into its business but aims to find new activities to attract visitors.