Transcript - Professional Property Services Limited

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
– 10th most livable city in China
– Fastest growing municipality in China
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Chongqing Map
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
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Chongqing
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
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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
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Three Gorges Dam
Bridges old and new
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
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New riverside developments
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
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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
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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
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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
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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
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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
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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”
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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
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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
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Pudong Today
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
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Shenzhen Master Plan
Dong Guan
圳
Hui Zhou
圳
Shenzhen
圳
Daya Bay
Built up area
Hong Kong
Dapeng Bay
Dapeng Peninsular
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
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Beijing Projects
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
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Affordable Housing
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
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International Valuation
Standards Committee
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
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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
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Thank you!
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Professional Property Services Limited