"The initial sales targets were astronomical," said Dann Murphy, who took over as general manager as his predecessor left eight months after the store opened. Targets for the six-story outlet’s restaurant and "retail experience," which includes designing personalized Barbie dolls, have been revised down three times since its opening in March.

"Every retail store operates at a loss when it opens, but they've been open long enough that it should be working by now," said Paul French, founder of Shanghai-based market research company Access Asia. "They overestimated their brand recognition in China. I just think the concept is wrong."

Mattel has revised the overall sales target for the store to between 65 percent and 70 percent of original expectations, said Murphy. The store has started meeting its sales targets on product sales, including dolls and toys, after the targets were downgraded twice, he added.

Disney, the owner of the ABC network in the U.S., still has no approval for a TV station in China. "Disney's park will mostly be a boost for its retail business in China, not media," said Duncan Clark, Chairman of Beijing-based consulting firm BDA China. "The only way they could get this park in China is by keeping it separate from their media business."

China's government owns all the nation's television channels and newspapers and imposes limits on foreign media companies, including allowing only 20 overseas films a year. China censors material critical of the ruling Communist Party through control of publication licenses, state-ownership of TV and radio stations and by blocking access to Internet sites such as Google Inc.'s Youtube. Those restrictions led News Corp. Chairman Murdoch to say in 2005 that his company had hit a "brick wall" in China.

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"The market is being opened more and more but media is a sensitive industry in China and any changes will only happen very slowly," said Professor Ding Xueliang, who teaches courses on political, economic and social development in China at Hong Kong University of Science and Technology.

The agreement to construct Disney's fourth park outside the U.S. in the world's most populous nation "marks a very significant milestone," Chief Executive Officer Robert A. Iger said in a statement. Disney and its Shanghai partners are now allowed to move toward a construction and operation agreement, the statement said.

Disney's foothold in mainland China comes after a decade of negotiations and will cost 24.5 billion yuan ($3.6 billion), according to Hong Kong newspaper Wen Wei Po. The expansion targets the wealth of China’s middle class and the fastest growth of any major economy as Burbank, California-based Disney suffers from lower spending at its U.S. theme parks, tumbling ad sales and falling DVD revenue.

"It gives Disney an opportunity to monetize its brand without necessarily having to produce filmed content," said David Bank, an analyst with RBC Capital Markets in New York. Expanding in China without facing the risk of regulatory hurdles is "the real key to making money in China for the media companies," he added.

The project started in 2003," said a spokesman. "Construction started the following year and we are nearly finished. We are just sealing the roof."

He added: "The design of the project was inspired by the appearance of the Pentagon. This building is not only impressive externally, but it is actually a very smart design. The logistics mean that people can circulate freely inside." The US Pentagon is said to have been designed so that employees can reach any office inside in under seven minutes on foot.

"We have signed thousands of tenants already, including a number of Western brands," said the spokesman, while declining to reveal the precise details of which clients had committed to floorspace.

The six-storey emporium displays almost 900 different Barbie dolls, many of which date back decades.

It also contains a spa, a bar and a studio where fans can try on human-sized items from Barbie's wardrobe. Inside, the 900 different Barbies are exhibited in glass cases that form a three-storey spiral staircase.

Browsers can get their nails done, sit in a glitzy bar with a fashion runway or eat in a pink and black restaurant. There is also a computer studio were Barbie die-hards can design and take away their ideal version of the doll.

American toy manufacturer, Mattel, says the store is part of the celebrations for Barbie's fiftieth birthday in March. And the choice of the location reflects the growing base of Chinese fans, who know Barbie as " Ba Bi Wa Wa". The world's most glamorous doll couple, Barbie and Ken, arrived in downtown Shanghai to help launch what is being billed the biggest Barbie store in the world.

Disney has long sought a mainland park for the access to the vast Chinese market that it would offer. The $37.8 billion media giant will be able to pitch the park as creating 50,000 new jobs amid a cooling Chinese economy. The downturn has given the park new urgency, according to a person familiar with the situation. "I think it will really fly now given the current economic climate," that person said.

Still, Leslie Goodman, an executive vice president at Disney's Parks and Resorts unit, stressed the proposal is preliminary and faces a long road ahead of it.

"As part of this lengthy process, we worked on a joint application report with the Shanghai government which will be submitted to the central government for review. She cautioned: "No deal has been signed, no project has been approved."

A Shanghai government spokesman declined to comment. Approvals by China's central government could take up to a year.