Universal Studios plans to build a US$900 million theme park in Beijing, its first venture into China. The Hollywood entertainment group last month signed a preliminary agreement with one of the mainland's largest travel enterprises, the Beijing Tourism Group, to build a park of American-style attractions with Chinese cultural characteristics. 'We signed the memorandum of understanding with Universal Studios last month,' Duan Qiang, chairman of the Beijing Tourism Group, confirmed. The park, to be built on a 300-hectare site in a Beijing suburb, needs the approval of the government's State Development and Planning Commission. The US entertainment group - part of French media and utility giant Vivendi Universal - had earlier indicated that China was high on its list of planned parks for Asia. Along with Beijing, Shanghai was named as a possible location. It is understood that the Shanghai government is making great efforts to persuade Universal Studios to build a theme park there, despite having signed a framework deal with Walt Disney. Mr Duan, speaking on the sidelines of a ceremony in Hong Kong yesterday celebrating the formation of Beijing Tourism Development - a Sino-Hong Kong joint venture - said China's vast size could support two parks. Beijing Tourism Group is a major shareholder of Beijing Tourism Development, holding a 32.5 per cent stake. Red-chip Beijing Enterprises Holdings owns 40 per cent, with the balance owned by Li Ka-shing's Hutchison Whampoa. Beijing Tourism Development is chaired by Yi Xiqun, who is also vice-chairman of Beijing Enterprises. It is hoped the Universal theme Park project will be completed in time for the 2008 Olympic Games. Hong Kong tourism groups had urged the government to ask Universal Studios to build a park here. Many are worried Shanghai's Disney theme park will provide unwelcome competition for Hong Kong's own Disney project, due to open in 2005 or 2006. Mr Duan said the location of the theme park had not been decided but several options were being considered, including Shi Jingshan in the west, and Majuqiao in the southeast of Beijing. Construction work could begin as early as next year. 'Equity distribution has not been finalised as we may invite more domestic or foreign partners to join the proposed development,' Mr Duan said, adding that the US group had not asked for a controlling stake.