Fast track funding

When the fans, the teams and the drivers arrived in Shanghai for the inaugural Chinese Grand Prix in September 2004, they could be forgiven for having mixed reactions. Shock, surprise and even envy were just some of the emotions experienced as the Formula One circus got its first glimpse of the Shanghai International Circuit.

In the last few years, consortiums of entrepreneurs from all over the world have tried to persuade 'Mr Formula One', Bernie Ecclestone, into adding their bid to the roster of F1 World Championship venues, most have failed. Yet in 2004, Shanghai became the latest addition to the F1 tour, and the Chinese Grand Prix drew high praise from drivers, fans and team personnel alike.

With its ultra-modern facilities, unrestricted viewing for over 200,000 spectators, and a track designed to promote exciting racing (and more importantly, overtaking), it's no wonder that Shanghai sets the standards for other circuits to aspire to.

But what was it about Shanghai that caught Bernie's eye in the first place? The answer lies largely in the fact that China is an untapped market for many of the sponsors involved in Formula One. Grand Prix racing has always been an excellent way for blue-chip brands to reach worldwide audiences. However, established markets in Europe and North America have matured in recent years, leaving Ecclestone's company, Formula One Management (which oversees the commercial interests of the sport), to look further afield in order to find fresh markets. A prospective race in Shanghai fitted the bill perfectly. Not only does China have the largest population on the planet, a high proportion of them are being exposed to western branding for the first time. For any company looking to expand its customer base, China is a key market.

But even given the right economic conditions, there was still plenty of hard work to be done to convince Mr Ecclestone that the time was right for a grand prix in China. The Formula One calendar already boasts world-class venues such as Silverstone, Monte Carlo and Spa-Francorchamps, each with decades of motor racing history and tradition behind them. Any new circuit attempting to compete with these hallowed tracks has to make a serious impression.

But building a modern grand prix circuit is a gargantuan task, requiring years of planning, preparation and construction, all of which needs to be funded in a realistic and structured way. To finance the Shanghai circuit, a government-funded joint-venture company was created in February 2002, comprising the Shanghai Juishi Corporation, Shanghai National Property Management Co Ltd, and Shanghai Jia'an Investment and Development Co Ltd. They put up the reported $450 million build cost and have underwritten its franchise fee through to 2010.

Even with the financial backing in place, the hard work was only just beginning. When the Shanghai consortium began talks with Ecclestone's company, the site for the circuit, in Jiading, 30km north-west of Shanghai's city centre, was little more than swampland. They had just 18 months to transform it into one of the world's most modern sporting venues. With a team of 3000 people working around the clock, they set about turning the dream into reality.

The construction project was led by circuit design expert Hermann Tilke, the man behind the other recent additions to the Formula One calendar in Malaysia, Bahrain and Turkey. He was supported by his team of 120 architects in Aachen, Germany.

They came up with a layout that offered an equal number of left- and right-turns (seven apiece) and a 200mph back straight leading into a hairpin, which is a trademark feature of Tilke's latest circuits and a proven recipe for exciting racing. The track layout also bears a passing resemblance to the Chinese 'Shang' character, meaning 'above'. However, this was unintentional and it was only on his first visit to Shanghai that Tilke was alerted to the connection. From there, the concept was born.

The swampland location brought its own particular challenges. Specialist building techniques were used to construct the track, which had to be built on support piles - 40,000 in all - ranging from 40 to 80m in depth. Despite this, the circuit was completed in record time. The circuit office was opened in September 2003, and in April 2004 the world's media were invited to the circuit to see the facilities for themselves and get a taste of what was to come before the first Chinese Grand Prix in September.

FIA F1 Race Director and Safety Delegate, Charlie Whiting, gave the circuit the official go-ahead in June, and the initial reaction from the drivers was very positive. BAR Honda driver Jenson Button predicted that Shanghai would be "one of the best circuits in the world". Seven-times world champion Michael Schumacher was even moved to say, "It's the best racetrack I have ever seen."

The Shanghai International Circuit's facilities have also attracted acclaim from all quarters, praised by drivers, teams, the media and fans alike. Shanghai has raised the bar of what can be achieved with the right conditions, an ambitious plan, a dedicated team of experts and, of course, the right funding.

In a country with a sports-mad population of 1.3 billion, the potential economic benefits of the Chinese Grand Prix are virtually limitless.

Of course, most of the immediate benefits were felt in the Shanghai region where, by the time Ferrari's Rubens Barrichello had taken the chequered flag, up to 10,000 new jobs had been created as a result of the grand prix. Around 150,000 tickets were sold for the race and several stores opened in the city selling F1 merchandise.

There's also a wider knock-on effect to consider; China's tourism industry, for example, has expanded beyond recognition. In the first half of 2005, the number of visitors to Shanghai was up by 24.5 per cent compared to the same period in 2004. As a result, many new hotels have sprung up, local transport industries have experienced a boom in demand and organisers have estimated that the Grand Prix will generate more than $5.5bn of revenue over the next 10 years.

Through successfully hosting a sporting event on this scale, the country's global reputation has been greatly enhanced and Shanghai has become the focal point of this rapid economic transformation.