Reforms Lead to Sustainable Growth
December 6th, 2013, Beijing —The Economist’s annual grand conferences - China Summit and The Bellwether Series 2013: China, sponsored by CBRE, the world’s leading commercial real estate services and investment firm, were held in Beijing on December 5th and 6th. Over 200 professionals attended the event and nearly 50 government officials, economists and business leaders delivered insightful speeches. China’s economic and political reforms and their implications, China’s engagement with developing countries, rapid growth of the internet, urbanization and the pension system were discussed openly and vigorously.
During the conferences, CBRE shared viewpoints on China real estate prospects with guests: in the short term, the real estate market will continue to face administrative regulation whilst exploring long-term management mechanisms; in the long run, the introduction and expansion of a property tax as a long-term market mechanism will lead to a more market-oriented and sustainable growth of the real estate market. The implementation of a new type of urbanization model will also help break the long-existing urban-rural divide. Considering the emergence of a large number of new cities, local government and developers will face challenges on how to realize balanced development. However, the change of city structures points us to an important opportunity in the real estate market of the future. The easing of the one-child policy and new ways in population management will have a positive impact on the real estate sector in the long run.
Last month, the Third Plenary Session of the 18th CPC Central Committee officially closed. Regarding the implications on the China real estate market, Frank Chen, Executive Director, Head of CBRE Research, China, commented: “CBRE believes a number of the proposed reform measures related to the real estate market will have long-lasting impact on the sector. Real estate, especially residential housing, is both market-oriented and public-service oriented. The central committee has determined that the ‘market’ should play a ‘decisive’ role in the overall resources allocation and pointed out ‘to accelerate property-tax legislation and related reform at an appropriate time’. CBRE believes the introduction and expansion of property taxes as a long-term market mechanism will enable the current real estate regulation model which is focusing on taking administrative measures and regulating transaction stage to become more balanced to drive a more sustainable growth of the real estate market. Furthermore, the easing of one-child policy and the differentiated hukou (household registration) systems of large, medium and small cities will have a positive impact on the real estate sector in the long run. In general, we believe the reforms will lead to a more market-oriented and more sustainable growth of the China property market.”
During The Bellwether Series 2013: China’s session “Paying for China’s Cities”, regarding the difficulties and the risks that rapid urbanization entails and how municipal authorities will raise the finance necessary to house, and serve, hundreds of millions of new residents, Frank Chen said: ”In the Third Plenary Session of 18th CPC Central Committee, a healthy development system of urbanization and related reform measures were raised which will speed up its progress and stimulate huge business demands including real estate. CBRE believes that municipal authorities should be mindful of overall considerations on how to boost the healthy and balanced development of urbanization in light of the current springing up of new cities, while noting there will be numerous challenges in finance, planning and revenue equalization in the short, medium and long term. On the other hand, for the developers, how to utilize the huge opportunities brought by new urbanization will be the key factor for the realization of precise positioning, strategy and product upgrading considering the current saturating market and intensifying competition.
Ivan Poon, President, CBRE China, attended the conferences and engaged in in-depth discussions with industry experts, academics and clients on CBRE’s important role in facilitating the China real estate industry to develop further. He stated: ”As a close partner, CBRE collaborated with The Economist introducing this perfect platform for great minds to get together in exploring various aspects of the China macro economics and political issues, including areas that will impact the broader real estate’s market. We firmly believe that, as the largest commercial real estate services and investment firm, CBRE should play an active role in reinvigorating and leading the transformation through continuous innovation across the industry.“
“As China real estate is quickly evolving and moves from start-up into a mature stage, requirements for real estate consultancy services from international and domestic customers are becoming increasingly sophisticated and diverse. Looking forward to 2014, following the business philosophy of ‘Embracing Change and Innovating Continously’, CBRE is dedicated to combining a strong in-country business platform and global network, capitalizing on the opportunities and providing value-added services to enhance our clients’ business strategies.”
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
