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THE CHALLENGE OF SUSTAINABILITY IN CHINA AND THE ROLE OF THE PROFESSIONAL ADVISOR

THE CHALLENGE OF SUSTAINABILITY IN CHINA AND THE ROLE OF THE PROFESSIONAL ADVISOR. Margaret Brooke Professional Property Services Limited 16 October 2006. Background . Sustainability in China Economic Social Environmental All about managing change Case Study – Chongqing

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THE CHALLENGE OF SUSTAINABILITY IN CHINA AND THE ROLE OF THE PROFESSIONAL ADVISOR

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  1. THE CHALLENGE OF SUSTAINABILITYIN CHINA AND THE ROLE OF THE PROFESSIONAL ADVISOR Margaret Brooke Professional Property ServicesLimited 16 October 2006

  2. Background • Sustainability in China • Economic • Social • Environmental • All about managing change • Case Study – Chongqing • 10th most livable city in China • Fastest growing municipality in China

  3. Chongqing Map

  4. Chongqing Demographics • Located some 2,500 km from Shanghai • Strategic location on the Yangtze River • Population – 31 million (2005) • Area – 82,400 square kilometres • 4th Municipal City in China (1997) • GDP per capita – RMB 11,000 in 2005 (RMB 4,450 in 1997) • GDP grown 11.5% pa. since 1997

  5. Chongqing

  6. Old industrial centre • The economic centre of SW China – bridge between the west and east • Established transport – water, land and air • Since 1930’s a heavy industrial base • steel and aluminum • cars and motor bikes • chemicals and pharmaceuticals • electronics and building materials

  7. New Infrastructure Developments • The Three Gorges Dam – largest hydroelectric dam in the world spanning the Yangtze – to be completed in 2009 • Port – Chongqing is the last cargo port on the upper reaches of the Yangtze and in the midst of a RMB14 million redevelopment • Highways – 8 major new highway projects in and around the city • Bridges – 8 new links across the Yangtze to improve connectivity • Airport capacity being quintupled by 2010

  8. Three Gorges Dam

  9. Bridges old and new

  10. Modernisation • New economic hub of western China • Introduction of new job creation opportunities – logistics, trade services • Shui On Group renovated Hualong Bridge area and developing new Industrial Zone • 137,000 sm of new floor space laid a day – residential, retail and factory • 1,400 people a day arrive from the countryside

  11. New riverside developments

  12. Economic Challenges • Widening gap between rich and poor, winners and losers • Wages and salaries rising but so also are costs • Need to extend urban economic gains to the countryside • Problems of affordable housing, medical and education provision

  13. Social Challenges • Growing competitiveness creating stress and inequalities • Speed of urbanisation impacting lifestyles and family ties • 10-25% of Chongqing residents suffer mental problems • Divergence between aspirations v achievement

  14. Environmental Challenges • Cheap coal and doubling of car ownership have lead to China having 16 of the dirtiest 20 cities on earth and Chongqing is amongst them • Air quality failed to reach a level of 2, the government health standard, on 25% of days in 2005 • The city is trying to clean up but economic development takes priority

  15. Housing Provision • Some 16.5 million sm of residential floor space provided in 2005 • Prices rose 8.5% during the year to RMB2,600 psm • Demand largely local with over 90% of sales being to local residents • Lack of affordable housing for less well off

  16. Are such levels of development sustainable? • Coming from low base • Key drivers • Political stability and need for control • Willingness to experiment • Aspirations of the people • Export led economy to date • Regional not national economies

  17. What are the challenges? • Political freedom v economic freedom • Energy and resource sufficiency/efficiency • Aging population • Environmental degradation (including heritage) • Rich v poor • Financial systems reform • Civil society and its value systems

  18. Can China accomplish its goals? • Five balances: • Domestic v international • Inland v coast • Rural v urban • Society v economy • Nature v man • Foreign policy • “peaceful rise to a great power”

  19. What are impacts internationally of such levels of development? • Increased nationalism • Greater global economic competition and opportunities • Intensive competition for global resources • Increased cross cultural influences • Outgoing investment will be a force • Increasing participation in international capital markets

  20. What opportunities are presented – both domestically and internationally? • Land use planning • Optimisation of Development – marketability, design, efficiency • Affordable housing • Project management • Property Management • International valuation standards • Effective funding of projects

  21. Pudong Today

  22. Areas of Opportunity • Land Use Planning • Developing master/action plans which are both market driven and capable of delivery • Holistic approach to implementation and management • Obtaining community buy-in • Flexible and responsive to changing market circumstances

  23. Dong Guan　　　　　　　　　圳 Hui Zhou　　　　　　　　　圳 Shenzhen　　　　　　　　　圳 Daya Bay Dapeng Bay Built up area Hong Kong Dapeng Peninsular Shenzhen Master Plan

  24. Areas of Opportunity • Optimisation of Development • Importance of project marketability and viability • Design, buildability and appropriate choice of materials • Reflecting aspirations of purchaser/occupier but also economic and financial realities • Effectively combining uses to maximise site potential

  25. Beijing Projects

  26. Areas of Opportunity • Affordable Housing • Nationwide issue – ownership underpins social stability • Balancing market intervention and wealth creation • Need to distinguish between social and financial need • Tailor solutions to reflect local circumstances

  27. Affordable Housing

  28. Areas of Opportunity • Project and Property Management • Address time, cost and quality issues • Introduce new skills and standards • Extend life and profitability of developments • Improve the quality of life by introducing management and maintenance programmes

  29. International ValuationStandards Committee

  30. Areas of Opportunity • International Valuation Standards • Long term FDI programme contingent upon use of international standards • Need for common approach which has global relevance • Combine nest of local knowledge with understanding of international practice • Crucial in Mainland Chain’s efforts to continue to attract FDI in future

  31. Conclusion • Barring any unexpected stress within the system, current levels of development should be sustainable • Sustainability challenges need to be recognised and addressed • Huge scope for international professionals to participate and assist • However, need to maintain focus

  32. Thank you! Professional Property Services Limited

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