Page 172 - 2023 White Paper on the Business Environment in China
P. 172
3 White Paper on the Business Environment in China
face more challenges to enter the Chinese market. transactions hit a record high. 2021 held great
Companies will require a strong business strategy importance for investors as China launched real
and market entry plan to enter the Chinese market estate investment trusts, which boosted liquidity
through the right channels. Businesses will also and transparency in the market. Rental housing
need local assistance to leverage the growth was another sector that drew investment interest
opportunities available under the new China in 2021, with numerous government policies and
infrastructure plan. One of the best solutions for initiatives promoting the sector. Influenced by
foreign investors and international companies is to structural deleveraging in the Chinese market over
opt for professional employer organization (PEO) the past year, real estate developers have been
services for their China expansion (Donnelly). selling assets in exchange for liquidity. Investors
capitalized on this unique opportunity to acquire
Construction assets. Buyers who purchase homes for their own
use also expanded their asset portfolios according
China's annual commercial real estate to their needs.
investment is expected to exceed 300 billion RMB
(US$47 billion) for the first time in 2022. China's Infrastructure Construction
commercial real estate investment enjoyed a
solid recovery in 2021 as total transaction volume China is pumping trillions of yuan into
surged 33% year-on-year to reach 273 billion RMB. infrastructure investment, stimulus that could
The figure for the coming year is projected to grow benefit the world's second-largest economy well
between 10% and 15 percent to race past 300 beyond this 2022's gloom of Covid lockdowns and
billion RMB due to the strong market. Purchasing property market turmoil. Beijing is making 6.8
plans reached a new high, with 59% of respondents trillion RMB (about US$1 trillion) of government
saying they intend to buy more in 2022. Purchasing funds available for construction projects. Total
intentions among domestic and foreign investors spending could be even higher than that —
became stronger than in recent history. Interest three times that amount, by some estimates.
among overseas buyers is especially high, with Whether the projects are a success or end up as
Shanghai and Beijing rated among the top five white elephants will help determine the outlook
cross-border investment destinations in the Asia- for China for years to come. Deserts in north
Pacific region. As the country is transforming to China are set to host an unparalleled build-up of
a low-carbon economy with high value-added renewable energy. Construction began in 2022
technology, growth in investment in biomedical, on wind and solar-power “bases”, which by 2030
electronics and telecoms, integrated circuits, will contain about as much renewable capacity
new energy vehicles and other high-tech as currently in all of Europe. The wind and solar
manufacturing industries will accelerate. Investors bases are the main engines of China’s renewable
are beginning to target real estate benefiting from installation. Ultra-high voltage transmission
the new economy such as logistics, warehouses, lines will transport the energy to the densely
business parks and data centers, and seize cyclical populated eastern seaboard. China's state-owned
opportunities in the office and retail sectors. grid company built 13 of them in 2022. The
Emerging as one of the markets that underwent a most ambitious water conservation project is a
strong rebound in 2021, China's commercial real 200-kilometer-long tunnel moving water from the
estate sector saw its transaction volume reach country's Yangtze river to a reservoir that feeds
US$39 billion, up 21% year-on-year. By category, northern China, a scheme known as the South-
investment in offices took the lion's share in the North Water Transfer Project. Projects that move
commercial property market, accounting for 37% water around the country account for about a
of total transaction volume. Logistics transactions third of China's water infrastructure spending.
grew significantly to 38 billion RMB in 2020, from Building urban infrastructure — including urban
16.9 billion RMB in 2019, and jumped to 59.1 billion roads, gas and water pipe networks and parks
RMB in 2021. Large-scale portfolio transactions — is the most popular choice for spending by
boosted retail investments, and alternative local governments, which account for the bulk of
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face more challenges to enter the Chinese market. transactions hit a record high. 2021 held great
Companies will require a strong business strategy importance for investors as China launched real
and market entry plan to enter the Chinese market estate investment trusts, which boosted liquidity
through the right channels. Businesses will also and transparency in the market. Rental housing
need local assistance to leverage the growth was another sector that drew investment interest
opportunities available under the new China in 2021, with numerous government policies and
infrastructure plan. One of the best solutions for initiatives promoting the sector. Influenced by
foreign investors and international companies is to structural deleveraging in the Chinese market over
opt for professional employer organization (PEO) the past year, real estate developers have been
services for their China expansion (Donnelly). selling assets in exchange for liquidity. Investors
capitalized on this unique opportunity to acquire
Construction assets. Buyers who purchase homes for their own
use also expanded their asset portfolios according
China's annual commercial real estate to their needs.
investment is expected to exceed 300 billion RMB
(US$47 billion) for the first time in 2022. China's Infrastructure Construction
commercial real estate investment enjoyed a
solid recovery in 2021 as total transaction volume China is pumping trillions of yuan into
surged 33% year-on-year to reach 273 billion RMB. infrastructure investment, stimulus that could
The figure for the coming year is projected to grow benefit the world's second-largest economy well
between 10% and 15 percent to race past 300 beyond this 2022's gloom of Covid lockdowns and
billion RMB due to the strong market. Purchasing property market turmoil. Beijing is making 6.8
plans reached a new high, with 59% of respondents trillion RMB (about US$1 trillion) of government
saying they intend to buy more in 2022. Purchasing funds available for construction projects. Total
intentions among domestic and foreign investors spending could be even higher than that —
became stronger than in recent history. Interest three times that amount, by some estimates.
among overseas buyers is especially high, with Whether the projects are a success or end up as
Shanghai and Beijing rated among the top five white elephants will help determine the outlook
cross-border investment destinations in the Asia- for China for years to come. Deserts in north
Pacific region. As the country is transforming to China are set to host an unparalleled build-up of
a low-carbon economy with high value-added renewable energy. Construction began in 2022
technology, growth in investment in biomedical, on wind and solar-power “bases”, which by 2030
electronics and telecoms, integrated circuits, will contain about as much renewable capacity
new energy vehicles and other high-tech as currently in all of Europe. The wind and solar
manufacturing industries will accelerate. Investors bases are the main engines of China’s renewable
are beginning to target real estate benefiting from installation. Ultra-high voltage transmission
the new economy such as logistics, warehouses, lines will transport the energy to the densely
business parks and data centers, and seize cyclical populated eastern seaboard. China's state-owned
opportunities in the office and retail sectors. grid company built 13 of them in 2022. The
Emerging as one of the markets that underwent a most ambitious water conservation project is a
strong rebound in 2021, China's commercial real 200-kilometer-long tunnel moving water from the
estate sector saw its transaction volume reach country's Yangtze river to a reservoir that feeds
US$39 billion, up 21% year-on-year. By category, northern China, a scheme known as the South-
investment in offices took the lion's share in the North Water Transfer Project. Projects that move
commercial property market, accounting for 37% water around the country account for about a
of total transaction volume. Logistics transactions third of China's water infrastructure spending.
grew significantly to 38 billion RMB in 2020, from Building urban infrastructure — including urban
16.9 billion RMB in 2019, and jumped to 59.1 billion roads, gas and water pipe networks and parks
RMB in 2021. Large-scale portfolio transactions — is the most popular choice for spending by
boosted retail investments, and alternative local governments, which account for the bulk of
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