China’s urbanization wave is considered by many to be the largest in human history. Following Deng Xiaoping’s reform and open up policy, millions of rural Chinese moved to China’s major coastal cities looking for opportunities in the newly-established factories. As a result, cities like Shanghai and Shenzhen grew into sprawling metropolises practically overnight.
However, much of China’s rural to urban movement has been absorbed by the mega cities unknown to most people outside the country. As cities like Beijing and Guangzhou continue to grow and mature, cost of living is rising as well. With economic development now spreading to these lesser known cities, people are beginning to abandon China’s largest cities for the increasingly cosmopolitan regional hubs.
Most of the accompanying construction boom has been exploited by domestic companies, and largely state-owned businesses at that. In 2013, less than 300 construction companies were foreign invested, compared to almost 80,000 domestic ones. Construction and real estate In China is largely a domestic game.
In this Issue of China Briefing, we explore the latest trends. In commercial real estate in China, and discuss how foreign companies can benefit from China’s massive construction boom. We provide a guide to how firms can sell construction materials In China, and finally detail how foreign architects can most effectively enter and take advantage of China’s rapid Urbanization.
Opportunities abound for the discerning company or individual in China’s booming real estate market. With our specialized knowledge of the sector, we at Dezan Shim & Associates look forward to working with interested parties in the future.
Powering China’s Urbanization: A Market Overview of the Real Estate Sector
The culmination of an enlarging middle class, rising wages, and rapid urbanization has created an Immensely profitable real estate sector within China. Each year, 1.8 billion square meters of
construction is erected within the nation. China Is responsible for more than half of global cement consumption.
Investment in China’s teal estate market has skyrocketed in tandem with the development of the country’s middle class and urbanization. Chinás middle class is predicted to encompass at least 75
percent of the urban population by 2023. With higher Incomes, the demand of new urban citizens will evolve in terms of housing, work and shopping. As the service industry is beginning to make up a larger share of the Chinese economy, the future will see more and more Chinese working In offices. This shift will have important consequences for the market In office space. In 2013, 15 percent of total real estate fell under the commercial category, with six percent as office buildings. By the end of 2015, China’s office real estate Industry is anticipated to grow by up to four percent from two years prior.
Originally published by Dezan Shira & Associates, a fellow LEA Global member.