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China: An Overview
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The People's Republic of China is located in the eastern part of the Asian Continent and features a land area of more than 9.6 million square kilometers, making it the fourth largest in the world behind only Russia, the U.S. and Canada.
China is a region with one of the longest histories in the world, dating back more than 5,000 years. The country has long been recognized for its impressive advancements in industry, architecture, arts, and language, before it was slowed by internal and external turmoil in its later history. In 1978, leaders focused on a more market-oriented economic development, which has since improved the personal freedoms and living standards for many of its people. China has shifted not only from central planning to a market economy, but also from a closed market to a global one.
China is indeed a country of natural splendor, from the majestic Himalayan Mountains to the mighty Yangtze River, the land is as broad and diverse as the culture that defines it. It is home to more than 1.3 billion people that make up some 56 nationalities all of which possessing their own culture and traditional customs. China is also one of the world’s greatest natural and architectural achievements, from housing the largest ancient building complex in the world to the longest man-made architecture, the oldest tree and the greatest canyon…the list goes on.
Special Announcement: China Earthquake Relief
 On Monday, May 12, at 2.28 p.m. Beijing time (6:28 GMT), a major earthquake, measuring 7.9 on the Richter scale, jolted southwestern China's Sichuan Province. Several lower-scale earthquakes and aftershocks followed in the same area. The quake destroyed many buildings in the area, as well as infrastructure like communication towers. According to recent reports, the confirmed death toll from the quake rose stands at more than 34,000 and the council - China's cabinet - said 220,109 people were injured. Officials said the final death toll was expected to top 50,000.
*Additional Sichuan Earthquake Facts:
Thousands are still missing;
approximately 14,000 were trapped under collapsed buildings; at least 436,000 homes have collapsed; 159,000 have been injured; over 70% of the roads are damaged and all the bridges have collapsed.
The Red Cross Society of China (RCSC) and its local units are accepting donations for the Sichuan earthquake relief. Please visit today to learn how you can make a difference!
Weather
Owing to its vastness, China’s climate varies greatly from region to region. Moving from the south of China to the north, the climatic zones are tropical, subtropical, temperate, medium temperate, and frigid temperate. During the spring and autumn months, temperatures range from the low 50s to the low 70s F, with a limited amount of rainfall, while summers and winters bring on extreme heat and cold, varying in extremes south to north. More Info >>
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Economy
China's economy expanded 10.7% in 2006, helped by strong fixed-asset investment and booming exports, according to recently issued government data. The National Bureau of Statistics reported that China's GDP totaled $2.7 trillion in 2006, slightly higher than 2005, and its fixed asset investment totaled $1.4 trillion in 2006, according to the Bureau, and is expected to hit $1.68 trillion in 2007. China's consumer price index, a key inflation measure, grew by 1.5% in 2006, with the fastest monthly increase occurring in December, rising 2.8% form a year earlier owing mainly to higher food prices. China's 11th Five-Year Plan (2006-2010) projects continued high economic growth based on higher domestic consumption.
China is now among the world's largest trading nations and a major importer and exporter of goods and services. Foreign direct investment (FDI) used in China in 2006 topped $63 billion, up 5% year-on-year, according to Commerce Minister Bo Xilai. Despite Beijing's two-year-old belt-tightening policy, China's economy still grows faster than expected. Experts are saying that China’s economy will be the world’s largest in less than 25 years.
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Tourism
China has set a development goal for its tourism industry in the "11th Five-year Plan" period (2006-2010), aiming to achieve across the board growth in the number of inbound tourists, international and domestic tourism revenue, and an overall tourism income of 10%. The World Tourism Organization forecasts that China will become the world's largest tourist destination and the fourth biggest tourist source by 2020.
According to the China National Tourist Office, more than 22 million foreign tourists visited China in 2006, an increase of nearly 10% from the previous year. China's total income from the tourism industry is expected to amount to more than one trillion yuan ($151 billion) by the year 2010, making up 7% of the country's GDP.
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Land of Opportunity
To compare China with most other emerging markets is like comparing a Corvette to a Chrysler... from closed markets to capitalism on cruise control, China’s been advancing at an accelerated pace that’s at or exceeding a level of what neighboring countries like Japan, Hong Kong and even Taiwan have done during the past few decades: rise from the burden of poverty to burgeoning wealth.
China’s past is just that, a thing of the past, and its future is arriving quickly, regardless of whether an obstacle slows the economy, as many fear has to happen, or otherwise, once the ball began rolling, or “bull” if you will, there’s been no stopping the momentum.
As a result of China’s eventual accession into the WTO, China has committed to broad reforms in the areas of transparency, notice and comment, uniform application of laws and judicial review. Each of these reforms will strengthen the rule of law in China and help to address practices that have made it difficult for U.S. and other foreign companies to do business in China.
China has grown at nearly double-digit rates for well over a decade now and the rise in consumerism is evident everywhere you look as the global marketplace has continued to expand. This has created a widespread opportunity for businesses spanning all major industries. According to the National Bureau of Statistics, China’s industrial earnings growth, primarily driven by soaring profits in sectors such as non-ferrous metals, transportation equipment production and energy, is in line with the surging economy. Profits of the industrial firms grew 23% and 40% in 2005 and 2004 respectively. Additionally, this advancement of capitalism contributes to a rise in salaries and thus a rise in consumerism from an increasingly affluent populace that’s been hoarding away cash for years to begin with. Your serious venture capital should look to China for big returns.
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Real Estate
In an effort to cool surging property prices, in 2006, the Chinese government imposed a succession of rules to make it more difficult for investors to capitalize on short term gains, beginning with raising the minimum down payment for larger apartments to 30% and more than doubling the period during which a property sales tax will apply. Consequently, China’s property market has become favorable for those seeking a more stable investment environment with increased potential for long term growth. Foreigners who have worked or studied in China for at least one year are allowed to purchase property. By cutting out some of the speculation, the market should continue to get stronger.
Inside Information...
If you're an investor with designs on purchasing property in China for business use, you MUST read this section regarding the new changes for foreign investment in real estate markets. Recently imposed restrictions on foreign purchase have indeed made it difficult, but not impossible, to purchase real estate in China so long as certain conditions are met. Here's what you should know...
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China's commercial real estate market contains plenty of cargo for foreign investors to choose from. The large banks have many real estate holdings available as a result of recent banking reformation after years of excessive lending, weak central regulation and a buildup of bad loans. These banks are therefore looking for buyers for the holdings, which may include everything from hotels and office buildings to raw land.
When it comes to owning real estate in China, foreign buyers are protected by property rights that include laws which state that the government may not confiscate property without paying compensation at least equal to the current market value and allows for claims to be made against the Chinese government under certain conditions. Today, there is a greater degree of transparency for potential property buyers. That said, there are still inherent risks that investors should be wary of, particularly if attempting to go it alone.
Laws are different throughout the country, so it is a good idea to connect with a quality agent who will know the local laws and be able to guide you through the process. Much of the real estate available for purchase in China are newly constructed developments, or off-plan, in the earlier construction stages. Due diligence on the developer and the integrity of their projects is essential for foreign buyers.
China continues to undergo a transition and we at Vinnie's World will continue to move in-kind with regard to the China property market so that we may present you with not only a suitable selection of real estate choices, but also create the opportunity for interested investors to enter the market smoothly and efficiently. Through our experience and reliable network of local channels, we can help you locate and purchase your preferred property for individual or business investment, and guide you through what would otherwise be difficult terrain.
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Why Buy in China?
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Because China has developed into a legitimate economic force moving into the next commercial phase—investment and consumerism. The most populous and industrious nation in the world, today China and its people have the opportunity to be more economically focused for themselves, and this in turn creates countless opportunities for savvy investors and business people alike.
It is a huge country that is undergoing a huge population shift, with some 300 million people moving into urban areas from the countryside. Consequently, this will create enormous demand for real estate and tremendous growth potential for investors. While major cities like Beijing and Shanghai are already major fixtures on the global scale, expansion will continue and the population level will increase; there will also be a spillover effect into the many "Second Tier" cities along the coast and toward the west that will stand to benefit by increased habitation and concurrent development. And Chinese real estate in many parts of the country is still an undeniable bargain by Western standards.
Not only adding to the intrigue, but also substantiating China’s ascension into a burgeoning world superpower, two of the world’s largest economic events will be held in China in the next few years—the 2008 Olympic Games, hosted by Beijing and the 2010 World Trade Expo in Shanghai.
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Properties in China
China's transitioning and so are we. While the investment climate for Chinese real estate has indeed ground to a halt for many a would-be investor due to recent litigation, there are still options available.
As we continue to seek the best opportunities for purchasing property, we are also focusing our efforts on providing long-term rentals and relocation services. In this way, would-be foreign investors may satisfy the requirements of residing in-country for the one year minimum, and more easily, make a determination if they will in fact want to purchase property for residential use.
In the meantime, please take some time to read our brief overviews on each of the following cities to gain a better insight on what they have to offer, then follow our links for more information about the available properties.
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Beijing: Few cities in the world are changing as quickly as Beijing. Upon departing the Beijing International Airport, construction cranes line the horizon, and wave after wave of new buildings consisting of hotels, shopping malls and commercial plazas are emerging at an inestimable pace. Beijing’s progression has been ongoing, but to be sure, with the prestige of playing host to the 2008 Olympics and billions in public and private capital flowing in, it’s an emphatic statement of China’s emergence as a global superpower. More Info >>
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Wuxi: Wuxi is home to approximately 4.5 million residents and the city continues to thrive. Its bustling City Center recently introduced its newest state-of-the-art skyscraper, appropriately titled “More Sky,” and there is numerous building and renovating taking place alongside many existing modern high rises. In the evening, the flood of neon radiates in the skyline creating a similar energy to Shanghai, something of a big sister to the city affectionately known as "Little Shanghai."
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Shanghai: Shanghai serves as China’s business lifeline with a number of seaports and international conglomerates dotting the landscape to create its largest commercial and financial center. It’s Mainland China’s answer to Hong Kong with its cosmopolitan character and global appeal. As the commercial hub of the country, Shanghai is more open and westernized due to its long heritage of international trade and European influence which suggests investors are likely to see good returns in capital appreciation and rental income.
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Chengdu: In a bid to boost the poverty-stricken western regions of China, the central government launched the "Develop the West" back in 2000. Today, Chengdu boasts a billion dollar infrastructure. The financial center of southwestern China, Chengdu has successfully attracted major international institutions as well as top flight local firms such as the People's Bank of China. Cost-effective labor forces and start-up costs continue to drive foreign investment in Chengdu, which is well on its way to becoming an established global player in China.
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Contact Us
Have you wanted to develop a presence in China and tap into its booming economy and bright future? We can assist you. Here at Vinnie's World, China is one of our primary areas of coverage and between our growing local team and network of professionals in China, we can locate the ideal commercial or residential property and assist you with the purchasing process.
To learn more about property buying opportunities for your business in China, please contact us: chinaventures@vinniesworld.com
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