The Mandarin Oriental Hotel Group yesterday finalised its first project in China, sealing a contract to manage a 292-room resort in Sanya, Hainan. The announcement surprised analysts who had expected Shanghai to be the group's starting point for the mainland market after protracted negotiations to buy a stake in the historic Peace Hotel. Mandarin Oriental group chief executive Edouard Ettedgui said the project would be the first of many investments in China. However, the group still lags behind rivals Four Seasons Hotels and Resorts, Ritz-Carlton Hotel and the Peninsula Hotels, which have already made their mark on first-tier cities Beijing and Shanghai. 'The project offers Mandarin Oriental a unique opportunity to introduce our luxury brand and legendary standard of service for the first time to China where we are reviewing a number of other opportunities,' Mr Ettedgui said. A Mandarin Oriental spokeswoman said Peace Hotel was one of several acquisition candidates in Shanghai. 'We are looking at a number of opportunities in this city, including the Peace Hotel, as we acknowledge its importance for our brand recognition in the mainland,' she said. 'As with all new projects, any potential deal has to satisfy our rigorous investment criteria.' Rumours have been circulating that Mandarin Oriental and Peace Hotel's owner, Jin Jiang (Group), have not been able to reach an agreement on the valuation of the 380-room hotel property established in 1929 on the scenic Bund. A wave of foreign investors rushing to invest in the city has pushed up asset prices, especially Peace Hotel, a rare and historical icon in the prestigious financial and tourist district. Meanwhile, the Mandarin Oriental's Hainan acquisition - which occupies a 12-hectare beachfront site on Dadonghai Bay - will be ready for business in the second half of this year. The resort plans to target big spenders. The developer for the resort is Hainan New Superior Industry.