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China Property Investment For Sale | Guides, Economy and  China Hotspots

 

"Global economic giant with huge cities and demand for property"

 

China is the world’s most populous country, the world’s second largest economy behind the United States and the world’s largest exporter. With huge urban conurbations with concentrated populations and considerable internal migration towards its enormous cities there is increasing strain and demand for accommodation countrywide.

For sometime now China has been gradually moving away from its strict communist regime to a more market-orientated international global player although in a highly state controlled fashion. This restructuring of the economy has resulted in more than tenfold increases in GDP since 1978, yet the per-capita income is still below the world average.

Although without doubt an international powerhouse to be watched, the Chinese do have a host of problems including low domestic demand, the world’s most rapidly aging population (thanks to its population control policies), sustaining adequate job growth for its enormous population, inequality, reducing corruption and containing the environmental damage its rapid growth has created including air pollution, soil erosion and the fall in the water table – especially in the North.

Since China’s expansion, house prices have soared as has the construction industry and many have invested heavily in second and even third homes.  The government has reacted to try and control this over inflation by placing numerous restrictions of who can own what, especially in the second home market and as a result of public complaints has instigated a massive public housing programme to provide low-income homes.

Country Guide

Geography

The People’s Republic of China is the second largest country in Asia by area after Russia. The territory of the People's Republic of China (PRC) contains a large variety of landscapes. In the east, along the shores of the Yellow Sea and the East China Sea there are extensive and densely populated alluvial plains, while on the edges of the Inner Mongolian plateau in the north, grasslands can be seen. Southern China is dominated by hillsides and low mountain ranges. In the central-east are the deltas of China's two major rivers, the Huang He and Yangtze River (Chang Jiang). Other major rivers include the Xijiang River, Mekong, Brahmaputra and Amur.

Government

The Chinese government is usually described as communist. Heavy restrictions remain in many areas, most notably in the media i.e. internet and press. Restrictions also inhibit freedom of assembly, freedom of reproductive rights, and freedom of religion. However, compared to the mid-1970s, the liberalization of the PRC is such that the current administrative climate is much less restrictive than before, although the PRC is still far from the full-fledged democracy as practiced in United States and most of Europe. The country is ruled under the Constitution of the People's Republic of China. 

Language

Chinese is the official language, while some Mandarin is also spoken.

Standard of Living

Within the urban centres living standards are not too dissimilar to Western standards. China’s rapid economic growth has increased personal wealth enabling further consumer spending. Many obvious lifestyle changes are occurring as citizens spend disposable income on cars, fashion, property and tourism. The life expectancy rate is also increasing.

 

Country Economy

Measured on a purchasing power parity basis, the People's Republic of China is the second largest economy in the world, after the US. Having been pegged to the US dollar for years, the Chinese currency is now pegged to a basket of currencies, a change which has boosted the economy greatly. On a global scale China is involved with many foreign enterprises and has numerous trade relations across the globe. China is the third largest importer and largest exporter in the world and has the second largest economy in the world after the US.

Its accession to the World Trade Organisation in 2001 has enabled the country to progress within the international arena and has encouraged foreign investment in the country. China plays a large role in international trade. The US is the largest recipient of China's exports, taking just under a quarter of China's commodities. China imports most of its commodities from more local countries, the majority coming from Japan, South Korea and Taiwan. China's economy is however highly energy intensive and inefficient and is the world's largest energy consumer, relying on coal to supply 70% of its energy needs.

Key industries:

Machinery, electrical products, data processing equipment, apparel, textiles, steel, mobile phones.

 

Hotspots

Shanghai

Home to the powerful Shanghai Stock Exchange, Shanghai rubs proverbial shoulders with New York, Tokyo and London and is one of the world's most important trade and finance centres. 

Considering the city's current status, the price of property remains attractive – you can purchase here for less than of the cost of other world financial centres including Hong Kong or Taipei. 

The real estate market in Shanghai is very healthy due to constant demand for luxury residential units. Transaction rates are high and construction is increasing to match demand. The luxury residential market is a stable one with an optimistic future as demand seems set to increase further. 

Beijing

Beijing is the capital, main political and cultural centre of China and enjoyed a thriving GDP growth rate. As the centre of China's tourism Beijing sees a high level of transient population, so serviced apartments and hotels in the city represent a good buy. 

Chongqing

The yield compression in first tier cities is diverting some institutional investors' attention to second tier cities among which Chongqing is an obvious hotspot.

Chongqing is located in Central China at the confluence of the Yangzte and Jiangling Rivers and has become somewhat of a "Gateway to the West". Central government's "go west" plan is providing an enormous boost to the city and the Three Gorges Dam project (impacting tourism and the relocation of residents) and increasing FDI will result in increased demand for commercial space and accommodation.

As a secondary city, Chongqing is beginning to be recognised as an upcoming market with enormous potential for high rental yields and capital appreciation.

Macau

Dubbed the Las Vegas of the Far East, Macau is one of world's most famous off-shore banking centres and tax havens.  Only 70km southwest of Hong Kong, property prices in this small territory (only 23km²) are about a third of Hong Kong's. Over 50% of GDP comes from teh gaming, tourism and hospitality industry.

With its robust economic performance, continual wealth enhancement, booming gaming and gaming related tourism industries, Macau's property market is attracting more and more sophisticated property investors and property prices have already increased rapidly. The supply of new dwellings is very limited and the property vacancy rate is low, making Macau a prime market with great potential. 

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