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24 | LETTER FROM BEIJING WORDS | Hilary Li


OPP CHINA


www.opp.org.uk |MARCH 2012


Finding the money


To achieve success in marketing real estate to China, broaden your horizons beyond Beijing and Shanghai. The regions with the highest GDP growth rates in 2011 were Guangdong, Jiangsu and Shandong. So, if you want to sell to Chinese buyers with cash to spare, these are the places to go says our Chinese editor Hilary LI (right).


C


hina continues to forge ahead, posting record GDP fi gures in spite of speculation about the unsustainability of the country’s meteoric growth rates.


The government-mandated shift from an export-led, to a high- tech, consumer economy ensures a continuing supply of new middle-, upper- and super-class consumers. Because signifi cant wealth is still a very delicate matter to manage in China, the newly wealthy “are being pushed out of China to fi nd schemes overseas,” says Adam Wu, chief operating offi cer on The China Business Network, in an exclusive interview with OPP.


“There is a huge pot of money there looking for the best place to get a good return,” he says, “and now is the time to get involved.” (See page 64).


For all that, China’s robust growth


impresses economists, its property sector outlook remains gloomy. Despite rigorous government policies


to avoid the dreaded real estate bubble and lower runaway appreciation, housing prices remain beyond the public’s purchasing power. In his latest newsletter, Jim O’Neill claims, “Beijing offi ce space has become more expensive than New York’s, according to Cushman and Wakefi eld, now $130 per square foot compared to $120.” Faced with this tenuous situation, Chinese investors are eager to fi nd safe overseas markets in which to invest their hard-won savings, and get good returns. Although Beijing and Shanghai


have a smattering of overseas property organisations marketing to them, the rest of China is virtually wide open. That opening becomes much more attractive when one considers that, measuring China’s 2011 GDP - $7.3 trillion – by province, Guangdong, Shandong and Jiangsu are the top three, big enough combined to be a top 20 world economy. Let’s take a closer look at each province, and the major cities in each.


Rank 1


2 3 4 5 6 7 8 9


10


Primary Chinese Provincial GDP Figures (2011) Region


GDP (RMB) Guangdong Jiangsu


Shandong Zhejiang Henan Hebei


Liaoning Sichuan Hunan


Shanghai 5.30 trillion


4.80 trillion 4.50 trillion 3.20 trillion 2.70 trillion 2.40 trillion 2.20 trillion 2.15 trillion 1.90 trillion 1.82 trillion


GDP (USS)* 838 billion


759 billion 711 billion 506 billion 427 billion 379 billion 348 billion 340 billion 300 billion 288 billion


*US$1=RMB6.325


10.0 9.2 9.2 9.0


11.6 11.0 12.0 14.7 14.0


Guangdong province South China’s Guangdong Province, the long-time leader of the Pearl River Delta’s bustling economy, is the country’s fi rst region to claim a GDP over RMB5 trillion, increasing 10 percent year-on-year in 2011, China Briefi ng reported. Fixed asset investment into Guangdong grew by 17.6 percent last year to RMB1.69


“Guandong is densely populated with a population equivalent to Mexico’s”


trillion (US$267 billion) and the province’s trade volume amounted to US$913.48 billion, expanding 37 percent from 2010. Guangdong is a densely populated province with a population equivalent to Mexico’s. Guangdong is not only China’s largest exporter of goods, but also the largest net importer as well. Its annual Canton Fair is the largest trade fair in China. Guangzhou‘s capital and largest


Growth rate (%)


city, is located about 120 km (75 mi) north-northwest of Hong Kong. A key national transportation hub and trading port with a population of 6.7 million, Guangzhou is the most important centre of foreign commerce in South China. Due to their historic port status and proximity to Hong Kong, Guangdong people are known for their cosmopolitan outlooks, and willingness to go abroad to seek their fortunes. On the southern coast of Guangdong lies Zhuhai, one of the fi rst Special Economic Zones. Industrial development in Zhuhai is focused on fi ve new high-tech and heavy industries: electronics, computer software, biotechnology and pharmacy, machinery and equipment, and petrochemical industries. Zhuhai is an attractive destination for foreign capital


and investment, due to a combination of its location, infrastructure and port. Similarly, its monied class is known to derive from high tech, with a similarly sophisticated approach to investing. Shenzhen is situated immediately north of Hong Kong. The area was China’s fi rst—and one of the most successful—Special Economic Zones (SEZs). In 2010, Shenzhen’s economy maintained a healthy momentum of development. GDP grew by 12% to 951.09 billion yuan, and the total retail sales of consumer goods increased by 17.2% to 300.08 billion yuan. Foreign trade volume increased 28.4% to US$346.75 billion, while export volume increased 26.1% to US$204.18 billion, ranking fi rst among the nation’s large and medium-sized cities for the 18th consecutive year. Heavily trade- focused, Shenzhen folk are known to be seeking havens for their earnings now that re-investing in export production is proving less and less attractive.


Jiangsu province


Since the late 1970s, Jiangsu province has been an economic hotspot and one of the wealthiest areas in China. In East China, Jiangsu Province’s GDP grew 9.2 percent to RMB4.8 trillion (US$759 billion) in 2011, according to the provincial government’s report. Jiangsu’s GDP per capita reached US$9,500, and the region’s FDI amounted to US$32 billion.


The development and wealth of cities


like Nanjing, Suzhou, and Wuxi have defi ned the province’s success story; however, the province must now address a large wealth gap that divides the province into a poorer north and a richer south. Naturally, it is to the south that a savvy real estate marketer should look. Nanjing’s economy is mainly based on electronics, cars, petrochemicals, iron and steel, and power, referred to as the “fi ve pillar industries”. It


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