Country Guide to China
- Area: 9.6 million sq km
- Population: 1.3 billion (UN, 2006)
- GDP: $2.225 trillion (2005 est.)
- GDP per capita: purchasing power parity $6,800 (2005 est.)
- Main resorts: Beijing, Xi’an, Jinan, Hangzhou, Shanghai, Nanjing, Suzhou, Wuxi, Wuhan, Chengdu, Chongqing, Fuzhou, Guangzhou, Changsha, Lushan Mountain, Guilin, Kunming, Hainan Island, Tibet (Xizang), Lhasa,
- Major Airports: (Shanghai) Pudong, Beijing, Hong Kong, Hong Qiao
- Flight Time from UK: 2h50min
- Time: GMT +8
Overview
China's rapid economic growth, with predictions that it may become the world's major economic power within decades, has generated controversy surrounding global warming and insufficient oil supplies. However, it has also spurred on China's rapidly improving tourist infrastructure.
Beijing is a perfect example. The city is currently undergoing great investment in both tourism infrastructure and historical renovation due to the 2008 Beijing Olympic Games.
Restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978. Economic development has generally been more rapid in coastal provinces than in the interior, and there are large disparities in per capita income between regions.
Foreign investment remains a strong element in China's remarkable expansion in world trade and has been an important factor in the growth of urban jobs. In July 2005, China revalued its currency by 2.1% against the US dollar and moved to an exchange rate system that references a basket of currencies.
Tourist Industry
Tourism is one of the fastest-growing industries in the national economy. The total revenue of China's tourism industry reached $67.3billion in 2002, accounting for 5.44% of the GDP. It dropped, largely due to Sars, to $59billion in 2003. Nevertheless, for areas rich in tourism resources, tourism has become the main source of tax revenue and the key industry for economic development.
According to the China National Tourism Administration, the number of inbound tourists is expected to grow by 4%, the foreign exchange earnings from tourism is expected to grow by 8%, and the domestic market size is expected to grow by 8% in the next five to ten years.
The World Tourism Organization (WTO) forecasts that China's tourism industry will take up to 8.6% of world market share to become the world's top tourism industry by 2020.
Tourism receipts (US$ million)
Property Market
The Chinese government are seeking to target overseas investment, and have changed the law to allow foreign purchase of Chinese real estate. An investor taking his chance today will benefit from a maturing market and fantastic predicted gains over the medium to long term.
Some breath-taking statistics from the Chinese property market:
- From 1998 to 2002 the average yearly growth in the property sector was 22%. In 2003 it was an unprecedented 32.5%.
- In Beijing, the revenue to investment ratio of high and medium-grade housing has reached as high as 30% to 40%, compared with around 5% in Europe and the USA.
- Research by Morgan Stanley shows that up to $2 billion in foreign capital will flow into Shanghai's property market in the next few years.
The majority of the most attractive residential and commercial developments in China are centred around Shanghai which is the business and trade hub of the entire country and where in excess of 30% of the country’s taxes are generated. Other interesting cities for an investor to consider are Beijing, Guangzhou, Tianjin, Shenzhen and Dalian, though Shanghai stands out from the rest as it is the fastest growing city in the world in terms of its size, population and output.
Demand for property in Shanghai will likely surge following the promotion of the city during the 2008 Olympic Games and the 2010 World Expo.
In summary, investment conditions are ripe and the long term prospects for the profitability and sustainability of the Chinese property market are exceptional.