This article appeared in Weekend Hunter September 2003 Edition.

 New Hot Spots in Urban Living

High-end Property A Combination of Location, Environment and Culture.

From areas such as Hong Qiao and Gu Bei that have prospered since 10 years ago, to the new millennium Waterfront area and pd new district, plus the prestigious Xu Hui and Jing-an, the city’s high-end properties are always closely linked to location and environment. Culture is another selling point n recent housing promotions. In addition to emphasizing on unique local area culture, developers also put down more efforts in personalizing individual projects. Prime location are no longer restricted to the city’s downtown areas, places with nice views ad growth potential are all among hot spots. The active involvement of house developers speeds up such areas’ pace up to another lever.

Waterfront Area

Properties in this area are popular among buyers interested in living or investing there. Known for its breathtaking river views and Lu Jia Zui commercial zone. Pu Dong new district is one of the city’s key project, with a distinct modern fair and a bright future. The price for luxury residential buildings along the river has doubled in recent 3 years, the area enjoys a high rental price and low vacancy rate. Current riverside buildings together with Tomson Seaside Apartment, Peng Li Seaside Apartments, The Grand and other form an affluent neighborhood, a new landmark for the city’s high-end residence, average price is over US$2000 per sqm. Whereas some name brand complexes, such as Shi Mao Riviera Garden and Yanlord Garden have an average price US$3000 per sqm. Properties around 2010 Expo site is priced at over RMB￥10,000 per sqm. On the other hand, houses around Nan Pu Bridge is more affordable, the main reason is that during the past 10 years more development focus was placed around Lu Jia Zui. Nan Pu area started to gain more attention during the past year because of the overall riverside development and decision on 2010 Expo venue.

Xu Hui Area

Xu Jia Hui is one of the most prosperous commercial and entertainment areas in town. Other than shopping malls and office towers, residential buildings have picked up significantly in recent years. Shopping district is conveniently located just steps away close-by highways greatly cut down travel time to airport and other districts. Because many existing housing area were divided long time ago, it’s not easy to build any large –scale housing project there, also green coverage is low in some complexes. However, the area remains to be one of the market’s favorites with promising prospects. East Manhattan is famous brand name under East Overseas Group with a range of floor plans to choose, including low-rise apartments and villas Average price is around 16,000 to 22,000 per sqm. Hong Run Garden has a total area of 160,000 sqm, green coverage is over 53%, average price is about 8,000 per sqm. Zhao Feng Di Jing has both service apartment and regular apartment, total area is 7,000 sqm average price is around 12,000 to 17,000 per sqm. Other popular projects include Zun Yuan La Cite etc.

High Potential Area Follow the step of city development

Zhong Shan Park

Traditionally, Zhong Shan Park area refers to the area east of Kai Xuan Rd., west of Jiang Su Rd., south of Wan Hang Rd. and North of Wu Yi Rd. Similar to Xu Jia Hui, Zhong Shan Park is another commercial and traffic center, but newer. With increasing government spending in this area, and Xu Jia Hui’s near saturation development, Zhang Shan Park is widely regarded to be a high potential area. Price-wise, the area’s average price of 8,500 to 10,000 has more room to grow compare to Xu Jia Hui’s 9,500 to 16,000. Zhong Shan Park also enjoys an attractive environment with its newly finished green areas and a great number of universities. Today, Zhong Shan Park area is positioned to be a sub-center area: 5 layers of vertical transportation systems, numerous shopping malls, office towers and hotels. At present there is only a limited house supply available in this area, such as Kai Xin Hao Yuan and New Age Service Apartment, property price is more likely to surge. The new Gold Winner for ‘The Most Popular Project’, Louie Triumphant Gate has an average price of 8,500 per sqm, which proves to be hugely successful.

Da PU Qiao

The first group of high quality housing complex apartment in Da Pu Qiao about 10 years ago, now 10 yrs after, the pioneered developer, Zhong Hai Group has once more taken the lead in setting up a new housing wave in this area. the recent finished ‘Da Pu Qiao’ Area Urban Program’ has outlined a comprehensive urban development plans for the next 10-20 years. Currently unfurnished housing price is set at around 5,200 to 8,500 in this area, average around 6,500. The first 3 quarters of 2003 will have over a total housing area of 300,000 sqm available for the market.

Pu Dong Zhang Jiang

Other than being the well-known high tech zone, Zhang Jiang also strives towards being a quality living area. Its coverage has grown from 170,000 sqm to 260,000 sqm in a hope to house more habitants. So far, among the 30000 employers in Zhang Jiang, only 2% actually live in Zhang Jiang. 15 % are expected to move to this area very soon. About 50% are willing to settle in the area. Four zones, are integrated in Zhang Jiang: Luxury commercial and residential zone, research and educational zone, manufacturing and international housing zone. The last will take up an area of 2.45M sqm.

Building to scrape Shanghai’s skies

World’s tallest office complex to cement city’s image as financial hub

Shanghai: construction resumed last Thursday of the world’s tallest building-which will be located in Shanghai’s Pu Dong-after a five-year hiatus.

Shanghai World Financial Center will be 492 meters tall, or 101 storeys. It will dwarf the world’s current tallest building, the Petronas Twin Towers, at 452 meters, in Kuala Lumpur.

Shanghai World Financial Center is scheduled to be completed in 2007.

Japan’s Mori Building Co Ltd. began constructing the financial center in 1997, but shelved the project months later during the Asia financial crisis.

Mori announced on Thursday during a press conference it will resume construction, with financial backing of 33 Japanese banks, insurance companies and trading houses.

The financial center is expected to cost about 100 billion yen (US$823 million)

Shanghai’s ambition

The project marks ‘a new height of Pu Dong New Area,’ and is ‘a further step towards (building Shanghai into) an international metropolis,” said vice-major Zhou Yupeng.

Shanghai World Financial Center will be situated I the city’s Lujiazui Financial Area of Pudong. It will be adjacent to the 420 meter Jinmao building, China’s tallest building and the third highest in the world.

Once completed, the Lujiazui area will be hone to three skyscrapers above 400 meters tall, local planning officials said.

The third building has not been constructed. That project is in the tendering process.

Tallest, or no?

‘We hope it will be the tallest. So far, it will be, ‘said Akio Yoshimura, president of Shanghai World Financial Center, or Taipai Financial Investment Co. Ltd.

A 508-meter skyscraper being constructed in Taipai, known as Taipai Financial Center, or Taipai 101, will have a 60 meter antenna facility, but its main structure will be shorter than Shanghai’s building, Yoshimura said.

‘It’s always better to be No 1 than No 2,’ said Minoru Mori, president and chief executive offer of Mori Building Co Ltd.

Mori said the center’s previous design, in 1997, called for a 460 meter building, which would have been the world’s tallest building.

The higher the building does not necessarily make it better, suggests Zhang Shiling, vice-president of the Architectural Society of China.

Skyscrapers are necessary in large cities due to limited land, Zhang said.

But Shanghai’s authority must develop a long term, overall plan when approving high building projects, Zhang said.

Shanghai has about 2000 buildings exceeding 100 meters, indicate statistics.

‘Compared with other international metropolis, such as Paris and Madrid, Shanghai’s skyscrapers are , to some degree, in a mess, ‘said Zhang, who is also director of Tongji University’s Insitute of Architecture and Urban Space.

High Investment risk?

Industry experts note there are significant risks with a gigantic real estate project such as Shanghai World Financial Center, which is being funded by Japanese investors.

The potentially high vacancy rate – given the lease rates and high maintenance costs – is the main risk in constructing such tall buildings, said Chen Wei, an economist with the Shanghai Academy of Social Science.

It costs nearly 1 million yuan (US$120,900) a day to maintain the Jinmao Building, indicate source.

Shanghai World Financial Center’s investors remain optimistic.

‘We do not think there is a high risk,’ Yoshimura said.

‘The market prospects in Shanghai are fairly promising, and we believe we can earn money,’ Yoshimura said.

Future demand will be great for high quality office buildings in Shanghai, Yoshimura said.

Lujiazui Financial Zone has about 1.9 million square meters of commercial office space, indicate official statistics from Pu Dong New Area.

The occupancy rate is 87 per cent, despite soaring lease fees.

The occupancy rate fairly high compared with other metropolises, Chen Wei said.

Resumption of the Shanghai World Financial Center project reveals investors’ confidence Shanghai, Chen Wei said.

Shanghai has since the mid-1990s continued to solidify its position as China’s most important business hub.

The city has posted 11 consecutive years of double digit economic growth, and has hosted several major international events.

Shanghai hosted the 2001 APEC summit, and recently wont the bid to host the 2010 World Expo.

Shanghai Industry Property Market Review – Q4, 2002      

Overview

Immediately preceding the one year anniversary for China’s entrance into the WTO, Shanghai was awarded an honor of its own: the World Expo 2010. With this conference also comes the realization of promise for infrastructure and other city investments. This successful bid will only further buttress Shanghai’s property markets as city promotes itself to a global audience.

This year saw the industrial property markets in Shanghai strengthen dramatically. Average rentals from the major zones increased over 8% to a range of 0.55-0.96 RMB￥/sqm/day. At RMB 1,700-3,013/sqm, industrial facilities’ sales vales rose slightly from its Q4 2001 level of RMB 1,600-2,961/sqm.

The following are some activities of developers in Shanghai:

*The First Shanghai Real Estate Expo  was held at Shanghai International Convention Center from November 23-25.

*The Foreign Investment Service Center in Minhang Development Zone has been established to better serve its clients.

*Waigaoqian Free Trade Zone has made an agreement with SHMC to setup a network in Waigaoqiao. This network will be divided into three parts: Citywide network, Administration MIS network, and Logistic Business network.

*Zhangjiang New Development Science Park was established in Zhangjiang, Pu Dong. The zone covers around 3.7 sq. KM.

Meanwhile, some international companies have made investments in Shanghai.

*Unilever has established its international procurement center in Shanghai.

*Volvo Construction Equipment Group is going to establish its China Headquarters in Shanghai.

*WMGS, a company under Wal-Mart group has began its business in Waigaoqiao Free Trade Zone, which indicates that the procurement center of Wal-Mart is going to be set up.

Industrial Facilities

The lull in newly constructed premises Shanghai experienced in Q3 ended as developers rushed to finish their projects before the end of the year. The 235,772 sqm of newly completed facilities is more than twice as much as was completed last quarter, but a 15% drop from last year’s levels. While the new supply level increased dramatically, take up instead decreased by 19%. This is expected as companies survey the new buildings and finalize their leases and does not represent a trend.

The huge influx on new supply increased the vacancy rate by 1 percentage point and also created a negative pressure on rents manifested in a RMB￥0.03 drop. This decrease in asking rentals comes from higher priced zones Caohejing, Jinqiao, and Waigaoqiao. This indicates that lower priced zones are becoming more competitive as they gain experience. However, the drop in asking price does not necessarily represent a drop in sales price, but merely an adjustment to reflect the real value of the property.

Zhangjiang, Qaingpu, and Songjiang completed 45,000 sqm, 30,000 sqm, and 25,000 sqm of new facilities, respectively. This increased vacancy in the zone by 335% and 133% in Zhangjiang and Qingpu. Songjiang had no vacancy last quarter, but now has 32,000 sqm of empty facilities.

Land

The sales price of Shanghai’s 11 premier industrial zones remained almost unchanged at USD53.4 per sqm. Prices slightly increased in Nanhui and slightly decreased in Waigaoqiao, but remained unchanged in every other zone.

*The changes form previous quarterly reports shows only a chance in calculation of the land price for Shanghai and not in the actual prices of the zones themselves.

Forecast

As the efforts of China’s WTO entry begin to affect the markets, the government continues to fund infrastructure and other investment projects and more international companies move their operations to China. Meanwhile, many domestic based companies are also flooding into Shanghai, ensuring that the demand for industrial property will continue to gradually increase in the next eight months. However, because of Shanghai’s increasing land costs, some companies, are moving their manufacturing facilities to other cities. The government of Suzhou, Hangzhou, and Wuxi are making some efforts to grasp the chance by improving the quality of their stock.

Shanghai’s role as financial hub grows 

Both foreign and domestic players solidify footholds

Shanghai: China’s financial hub is gaining enough critical mass to return to the glory it enjoyed as an international metropolis back in the 1930s

In the last week alone, several financial events have grabbed the headlines.

Last Monday, the world’s largest financial group announced it will lease space in and purchase name naming right to a skyscraper to be completed in 2005, to be named Citigroup Tower.

Two days later, China Construction Ban, the country’s largest bank-card issuer, announced it plans to relocate its bank-card center from Beijing to Shanghai.

On Friday, New York Life and Haier Group kicked off a 200 million yuan (US$24.2 million) joint venture.

All these news items are just a sample of how financial institutions’ interest in Shanghai is growing thanks to the city’s good infrastructure, financial incentives, large talent pool and economic base. To be more precise, the interest is centered on Pu Dong, the city’s financial heart, where all three sites are located.

In addition to putting its logo on the top of an eye-catching waterfront skyscraper , Citigroup will consolidate its China operations, including its corporate, investment and consumer banking business, and plans to move them into the building. A Citibank retail branch will be opened on the building’s ground floor.

This is the second building to be named after an international financial institution. Two years ago, the Hongkong and Shanghai Banking Corp (HSBC) renamed a 46-floor office building, which houses its China headquarters, the HSBC Tower at a cost of US$33 million

Actually, most foreign financial institutions pick Shanghai as the spot to begin their Chinese business.

And quite a few domestic financial firms have chosen to relocate their headquarters or core business to Pu Dong.

Except for the Bank of Agriculture the three other big Four State-Owned banks have relocated to their Shanghai branches and some operations center into their skyscrapers in Pu Dong.

In addition, tens of domestic securities houses and fund management companies have moved their registered locations or business headquarters in to Pu Dong this year.

After a decade of development, Pu Dong, once dismissed as a white elephant, has emerged as a booming financial district, the skyline of which is now shaped by multi-hued glass and steel skyscrapers.

According to the Pu Dong government, 121 financial institutions, including 56 foreign players, are operating in Pu Dong, employing some 23,000 white-collar staff. Over 70% of the buildings in Lujiazhui are named after financial institutions, including the Bank of China, China Life and the Bank of Communications.

Shanghai based Pu Dong Development Bank and Shenzhen based Ping An Insurance are even building their own premises in Pu Dong.

All these stand as a testimony to Shanghai’s determination to become an international financial center in the next 10 to 20 years.

‘Forging an international financial center is a sophisticated and systemic projects involving an influx of market player, financial innovation and security, as well as improvement infrastructure and the environment.’ Said Shanghai mayor Chen Lianyu earlier this year.

Chen added that Shanghai would create a better market environment to attract more financial institutions to the city.

Already home to China UnionPay, the national payment system, and the credit card centers of China Merchants Bank and Guang Dong Development Bank-and now China Construction Bank – Shanghai plans to establish a bank-card industrial base in Pu Dong, aiming to attract more domestic and foreign banks to establish or relocate their bank-card centers in China’s financial hub.

According to the city government’s plan, the financial sector is expected to account for 20 per cent of Shanghai’s gross domestic product by 2005, up from last year’s 13.8 per cent  

Foreign firms explore mine in Shanghai.

City soars to new economic heights lures major multinationals

Shanghai : Plans for Shanghai have always been ambitious – nothing short of restoring the city to its former glory as an economic center to rival Tokyo, Paris and New York.

The gleaming metropolis of newly built skyscrapers, exhibition halls and hip bars and restaurant stands as a testament to that ultimate goal as well as the frenzied speed of the city’s modernization.

Although it may still be several years, even decades away from becoming one of the world’s financial hubs, foreign companies are falling over themselves to strike deals to gain a presence in this city of 13-million people.

“The government here has a vision and they done a really good job” said Angie Eagan, managing director at leading public relations firm Burston-Marsteller.

These days in Shanghai not a week seems to go by without the announcement of another deal, usually involving a multinational.

French Bank Credit Lyonnais won regulatory approval on December 20 to set up the mainland’s first joint-venture brokerage. At the same time US insurer New York Life established a life and health joint venture with the China Haier Group.

Unbridled foreign enthusiasm comes after a banner 2002 for the city which saw the government string together an impressive array of big projects and deal to help secure its eagerly sought super-city status.

Topping the list of recent achievements that have international companies salivating about the city’s economic future is the hosting of the 2010 World Expo, which officials predict will bring the metropolis billions of US dollars in investment.

Other billion-dollar projects the city has won this year include Formula One motor racing beginning in 2004, a Universal Studio movie theme park scheduled to open by 2006, and the hosting of Special Olympics in 2007.

Having already received billions of US dollars in foreign investment over the past two decades, Shanghai has used its economic position to lure major multinationals such as Volkswagen AG, one of the first arrive in the city.

Shanghai already accounts for nearly 20 percent of China’s US$50 billion in foreign direct investment, and it is voraciously looking for more, analysts say.

Several years ago city government official started to daringly pitch the city as worthy pf multinational’s attention over other regional centers like Hong Kong and Singapore.

The sales job worked. The eastern area of the city known as Pu Dong, which 12 years ago was a barren marshland, is now home to 30 multinationals regional headquarters, according to the Pu Dong government.

Another 80 have set up research and development centers there.

A further 174 of the top 500 companies, as rated by US-based Fortune magazine, have invested in 328 projects in Pu Dong with a total of US$11.2 billion, said the Pu Dong Overseas Funded Business Association.

In January, French telecommunications giant Alcatel was one of the first to relocate its Asia-Pacific regional headquarters to Shanghai. Two weeks ago it added one of its six worldwide research and development centers to the city.

“We choose Shanghai because it is the premier business city in Shanghai and a magnet for talent from all over the country, so there is plenty of research talent available here, said Lim Seng Jin, a senior manager at the company.

The list goes on. German conglomerate Siemens AG is moving the Asia-Pacific headquarters of its mobile phone division from Hong Kong to Shanghai.

US banking giant Citigroup recently said it would consolidate its operation in the city in the new 42-floor ‘Citigroup Tower’ being built on the eastern bank of the Huangpu River.

And Societe Generale established the first joint venture fund in management company with steel conglomerate Shanghai Baosteel Group.

Connie Chung, head of corporate marketing and communications at BNP Paribas Peregrine, said companies focus on Shanghai because it is ‘very important business center in China…’ (And) it is also easier to find people with international experience.”

“There are many places to do business in China, but in Shanghai you have a government that is fairly transparent and pro-business,” Burston-Marsteller’s Eagan said.

“China has a good market, it is a good operating base for Asia, and it’s a high brand city. It’s a great city in which to build a brand position,” Eagan said.

Forum puts spotlight on China   -  This article appeared in the Shanghai Daily Newspaper June 30 2003 Edition

The global business community will put the focus back on shin September as the world’s top corporate executives gather in the city for the Forbes Global CEO conference.

The forum, to be held on September 16-18 has a touch of poignancy as it comes in the aftermath of China’s victory over severe acute respiratory syndrome.

‘The conference will dramatically demonstrate that Shanghai and China are ready to do global business,’ Steve Forbes, president and chief executive officer of Forbes, said yesterday at a press conference in Shanghai.   

‘We believe they (China and Shanghai) will be able to achieve the growth rates that they recorded in past years,’ he said

The conference, co-hosted by Forbes, a global media company, and the Shanghai municipal government, will be themed ‘Energizing Global Business:  The China Factor.’

About 300 CEOs, entrepreneurs and company owners are expected to attend the annual event, which Forbes started in 2001. The last two were held in Singapore and Hong Kong respectively.

Multinational, including UPS, Dow Corning, HSBC and Samsung will send executives to the forum.

Top names in the Chinese business field, such as Liu Yonghao, chairman of New Hope, who is also the sixth-richest man on China’s mainland according to Forbes, and Zhang Ruimin, CEO of Haier Group, China’s largest refrigerator maker, will speak at the forum.

Shanghai government and Forbes reached a consensus late last year when Steve Forbes proposed using the city as the venue for the 2003 event.

The outlook for the conference was clouded earlier this year when China was hit by the SARS.

‘There are some suggestions that we should postpone or eliminate the conference,’ Forbes said. ‘But we believe China and Shanghai will overcome the difficulties.’

Now that the shadow of SARS has faded, the preparatory work for the Forbes forum is going smoothly, Shanghai Vice Mayor Zhou Yupeng said yesterday at the press conference.

‘We wish this year’s conference will become the most successful,’ he said. ‘The event will also spur Shanghai’s economic development and help us soak up more foreign investment,’

The Forbes conference will be yet another big global event that Shanghai has hosted in recent years. In 1999, it hosted the Fortune Global Forum and in 2001, the Asia-Pacific Economic Cooperation Summit.

Forbes said the meeting is designated for business leaders to exchange Information and ideas on creating business opportunities.

‘We hope this conference will have a positive effect in the coming months and years for China and the world economy,’ the media baron said. 

This article appeared in ‘Focus Property’ – Shanghai Daily Newspaper, August 05, 2003      

Rockefeller eyes Nanjing Road E

US-based conglomerate Rockefeller Group plans to build a landmark building on Nanjing Rd. E, where the group’s Southeast Asian headquarters will be located, source with Huangpu District government said.

Rockefeller is discussing with the district government an investment plan for the northern part of Nanjing Rd. E. between Jiangxi Rd. M and Henan Rd. M, said an official with the Huangpu District government who asked not to be identified.

‘The Rockefeller Group hopes to create a landmark building on China’s famous commercial center, Nanjing Rd. said the official ‘The name of the building is likely to be Rockfeller Center.’

The complex will include offices and shopping areas, he added.

Rockfeller will buy the land where Hengdeli Clock and Watch Store is currently located as it hopes to establish itself at the expensive location for future development, according to the official.

The price of the land is not disclosed.

An analyst said Rockfeller is banking on the potential value of Nanjing Rd. E, and its arrival is sure to attract more of the world’s top investors to the area and drive up land prices and rents I the area.

‘Rockfeller ‘s move shows Shanghai’s status as an international metropolis is recognized among overseas investors,’ said Jiang Xinguo, a senior researcher with Shanghai Zaihang Estate Investment Consults Co Ltd.

‘The current value of the shopping area has reached a world level for an international metropolis,’ he added. ‘The arrival of the world top brands with make the shopping area more valuable.’

Meanwhile, two of the world’s top brands, Lotus Vuitton and Christian Dior, are in talks to open flagship stores at Shanghai’s historic Peace Hotel, located a the crossroads of Nanjing E and the Bund.

The hotel is in talks with Hong Kong-based Oriental Mandarin Hotel on the project.

Property project to start - This article appeared on the Shanghai Daily Newspaper August 18 2003.

Sun Hung Kai Properties Ltd. Hong Kong’s biggest developer by sales, said it will start construction next year of its HK$8 billion (US$1.03) billion) property development in Shanghai, its largest investigate on China’s mainland.

The 4.5-million-sqaure-foot project in Shanghai’s Pu Dong New Area will be completed in three phases by 2011,with the first phase planned for 2007, the company said in a faxed statement. The project comprised grade-A offices, serviced apartments, a shopping center and hotels.

Sun Hung Kai, Henderson China Holdings Ltd. and other Hong Kong developers are increasing investments on the mainland, betting that China’s membership of the World Trade Organization, the 2008 Bejing Olympics and Shanghai’s hosting of the World Expo in 2010 will help fuel economic growth.

The company and the Shanghai Lujiazui Finance and Trade Zone Development Co signed a land use contract on Friday for the project, the statement said. Sun Huang Kai had said last year that it planned the HK$8 billion investment in Shanghai.

Sun Huang Kai’s development site is next to the Oriental Pearl TV Tower, Asia’s tallest television tower, and Jin Mao Tower, the tallest building in China.

Widened road a ‘destination’ – Renovation benefits people, traffic - This article appeared on the Shanghai Daily Newspaper August 26 2003.

The newly renovated Xizang Road M. will open to traffic with decidedly European characteristics by the end of this year, a senior designer said yesterday.

‘The new road will not only be widened for more traffic but will also become a very romantic destination for a sightseeing and relaxation,’ said Zhou Cong, a researcher of the Shanghai Engineering Institute, who is responsible for the designing of the road.

As one of the city’s historical landmarks, the 2.94 kilometer road, which runs from Menggu Rd. to Fu Xing Rd. M. is met by the city’s prime commercial thoroughfares – Nanjing and Huaihai Rd.

Since last October, the south-north has been under a major face-lift to facilitate traffic in the central downtown and to polish the city’s image.

With a total investment of more than 400 million yuan (US$48 million), the renovation project is essentially composed of the newly constructed Xizang Road Bridge across Suzhou Creek, the six-lane Xizang Rd. M. and paving work.

The gray-pained bridge will include European style lampposts decorating each corner of the structure.

For the public, there will be a relaxation zone, comprising such facilitate as coffee shops , landscaping, book pavilions, a church, shopping malls and restaurants on the pavement.

“considerably, the entire raod will also be equipped with handicap facilities to aid the disable,’ Zhou said.

In addition, a newly constructed metro station, where there lines converge at Xizang and Nanjing roads, will be furnished with sculptures-like telephone booths and traffic indications. 

This article appeared in Shanghai Daily on Wednesday September 17.  

Forbes forum opens toady  

Editor calls Shanghai a promising city  

Shanghai is the most promising city in the world, Steven Forbes said yesterday while explaining his decision to hold the 2003 Forbes Global CEO conference in the city. 

More than 400 business leaders from both homes and abroad will take part in the event, which starts today in the city. 

‘We recognize Shanghai as the most promising city in the world for entrepreneurs and the gateway for China’s economic development,’ said Forbes, chief executive officer and editor-in-chief of Forbes magazine, during press conference yesterday. 

The two-time US presidential candidate said the event will have a strong local flavor in terms of both topics discussed and participants. Around 130 top Chinese executive will take part in the event, including Zhang Ruimin, chief executive officer of Haier Group, one of China’s biggest electrical appliances manufacturer. 

‘The conference is focused on economic development in China and Asia and there is also deep involvement by Chinese entrepreneurs,’ he said. 

‘By the end of the conference, we hope that we will have new ideas, new values and friendships.’ 

Shanghai Vice Mayor Jiangsixian praised the decision to host the event in Shanghai, saying the conference provides an excellent opportunity for China’s entrepreneurs to become more integrated into the global economy. 

‘The conference has chosen a very good topic and set up a bridge for Chinese entrepreneurs to strengthen their cooperation with global counterparts,’ he said. 

Jiang also noted the forum will beef up the city’s image as the country’s economic hub. 

Reporters at yesterday’s press conference used the opportunity to pepper Jiang and Forbes with questions about China’s real estate market and currency policy. 

When asked if the city’s real estate market is overheated, Jiang said the sector is still in healthy shape.’ 

‘We will work out effective measures to prevent a bubble in the property sector,’ Jiang promised. 

He also said the recent arrest of Zhou Zhengyi, a local property magnate who was ranked the 11^th-richest businessman on China’s mainland by Forbes last year, will not cast a pall on the local real estate sector. 

‘As you can see, Zhou’s arrest is linked with fraudulent registration, share price manipulation and disruption of finance order, but not with his business in the property sector,’ he said. 

When asked about the large number of Chinese entrepreneurs on Forbes’ rich list that have ended up behind bars over the last couple of years, the publisher said it is natural for new faces to appear on the list each year. 

‘The rich people’s list provides only a snapshot of the photograph of who is good at the time. If you break the law, you will be found out and punished,’ he said. 

Commenting on China’s currency policy, Forbes said: Those who speculate on the revaluation of the Chinese currency will be very disappointed…there will not be a big revaluation. 

He also warned against betting on the appreciation of the Chinese currency. 

‘You had better take back the money. The hot money will become cold’ said Forbes. 

As per tradition, the editor marked the opening ceremony yesterday for the conference by piloting a hot-air balloon over the Lujiazui financial district. 

The Forbes conference will conclude tomorrow.

This article appeared in Shanghai Daily Newspaper September 25 2003  

Extended visas offered - Move to attract more overseas investors

Starting yesterday, expatriates living in Shanghai can apply for residence permits good for up to five years, provided they meet certain requirements, according to the Shanghai Public Bureau. 

‘The measures were set to attract more overseas investors and professionals with expertise needed in Shanghai,’ said Ma Zhengdong, director of the Shanghai Entry-Exit Administration Bureau. 

The extended visas –good for two to five years –are available to :

Those who contribute significantly to China and Shanghai and those working under government assistance programs

Those employed by major research and development institute.

Executive with multinational corporations wit at least US$30 million in registered capital.

Top manages in the representative offices of a foreign firm

Senior managers employed by major state-owned enterprises.

Expatriates.

Expatriates who have invested at least US$3 million in Shanghai can apply for four-year permits. 

Their spouse and children under the age of 18 are entitled to the same visa, the bureau said. 

Currently, there are more than 60,000 expat living in Shanghai, according to the government. Yesterday, the bureau also announced a new visa application process to take effect in December. 

The news system will allow those who invite overseas guests to visit Shanghai for a business trip to apply for visa authorization through the government’s website (www.shanghai.gov.cn), if time does not allow the visitor to apply for a visa from the Chinese Embassy in his or her home country. 

Separately, the public security bureau also said yesterday that it will encourage drivers involved in traffic violation to pay their fines through an IC card, if their punishment does not include the confiscation of their driver’s license. 

The measure will start in December for drivers whose violation were detected by electronic traffic cameras and will expand to other violators next year. 

The IC cards are free and police said that the new system will be more convenient for drivers who will no longer pay their fines at the police station.

This article appeared in Shanghai Daily Newspaper on Mon. Sep 22, 2003

License plate prices plunge  

The lowest winning bid for a private automobile license plate in Shanghai dropped this month for the first time since last November, hitting a six-month low of 28,800 yuan (US$3,470). 

On Saturday, an estimated 8,532 people bid for one of 6,650 plates available this month. They were lucky, as last month 9,000 people bid for 4,500 plates, according to Fan Ganping, deputy general manager of Shanghai International Commodity Auction Co., Ltd. which organizes the bid. 

This month’s average winning price was 38,728 yuan, 641 yuan less than last month. 

Authorities said prices were down because the auction included 2650 plates from local motorcyclists, who were allowed to swap their licenses for car plates and then offer the licenses for the first time. 

Local authorities will hold motocyccle license swap twice 1 year over the next three years to compensate bikes who are banned from using their motorcycles on major roads in Shanghai. 

Last month, the lowest winning bid hit a record high 38,500 yuan. Strong demand has kept average plate prices above 30,000 yuan since last November.  

Individual and private companies in Shanghai have to bid for license plates for their new cars through auction. Government bureaus and state-owned companies can apply for plates with the city traffic authorities. 

The government controls the number of plates as a way of controlling air pollution and traffic congestion caused by too many vehicles. 

Local authorities have been trying to keep prices at an acceptable level. Beginning last month, car dealers are banned from bidding for their customers-a move to curb the price rise. 

High costs have pushed many Shanghai car owners to buy their license plates in neighboring provinces, where they only cost a few hundred yaun.

The Roadmap to Riches - This article appeared in City Weekend Magazine – Real Estate Guide Fall 2003

In 1865, the Jiangnan Arsenal opened on the north banks of the Huangpu River, with the vision of making China self-sufficient add strong. From its first incarnation as a munitions factory to its current one as a shipyard, the power and wealth generated by this industrial giant served as one of Shanghai’s key modernizing faces. Perhaps it is only fitting that over the next three years it will be torn down to make way for the 2010 World Expo.

Bridging both sides of the Huangpu, the massive 540 hectares (over 5 square km) World Expo site will forever  change the face of Shanghai. The site will span the currently overcrowded Puxi side and Sanli, the underdeveloped Pudong site, stretching between the Nanpu and Lupu bridges.

Themed ‘Better City, Better Life’, the Expo should bring windfalls of both domestic and foreign investment, large scale improvement s for infrastructure, and a new image to a neglected part of the city. According to Albert Lau, managing director of FPDSavillis Property Service Co., the Expo should boost the economic potential of Shanghai, a city already ‘carrying its own weight as a key financial center in China and Asia’

The World Expo is an international showcase where both host and visiting nations can display their economic, technological, and cultural achievements. With 7 years till kick off, any of its specific effects are hard to predict. However, from the moment it was announced that Shanghai would be awarded the event and the site was chosen, a ripple effect spread through the city directly impacting the property market.

Nearly all the apartment in Shanghai jumped in price, especially those close to the Expo site, with some prices growing 30%. Some developers have refused to sell in anticipation of further increase Villas and low rise apartments are already going up in surrounding areas and land prices have been rising. Many developers, eager to ride this wave to prosperity, are using the Expo as a major advertising element regardless of any direct relation between their properties and the event itself.

The direct investment in Shanghai’s World Expo is earmarked at around US$3 billion with 43% coming from government offers, 36% from companies, and 21% from banks, Fifty-eight percent of the funds will be used to acquire existing industrial and residential properties while 42% will go towards the actual construction of the World Expo Villages and the World Expo Park. This, however, is only part of total financial commitments.

To make the area around the Expo site more desirable for investment, significant funds are scheduled to go towards roads, urban aesthetics, and the environment over the next few year. But this drive to develop goes well beyond  the Expo site itself. Other plans to include the addition of a second runway at Pu Dong airport, another railway station to support eight more rail lines, and 12 more subway lines. New highway will connect Shanghai wit surrounding province s, and the Yangtze River Delta area is slated to become one large technology park. Finally, a proposed 3-yr environment action plan aims to improve water and air quality.

Indeed, Shanghai’s grandiose development scheme encompasses the entire city. Take out of context., this may seem like large gamble considering World Expo often lose money and fail to drive their host cities towards further economic growth. Lau, however, is quick to point out that Shanghai has been growing for a long time without Expo. The ability to organize and arrange such a huge event is a sign of maturity and should help Shanghai cement its status as a world-class city.

As to what effect the actual construction of the site will have on the real estate market, Lau holds that ‘it is still too early to tell.’ Although some contracts have already been promised, many more will be granted by tender or public bids. What is clear, however, is that the site has been radiating interest and hope to other industries.

Tourism is predicted to reap the largest benefits from the Expo with Shanghai estimating an additional 60 million visitors, three million of them foreigners, during the Expo’s six-month run, According to Lau, “The heat will begin with the Beijing Olympics sparking an influx of tourists. Shanghai will host some events and even for those who do not attend events in Shanghai, it will be a key place to visit. ‘‘This is all part of what he called China’s roadmap for development. Lau believe the Chinese government wise to blend the Expo and the Olympics so closely together.

This article appeared in Shanghai Daily Newspaper on Thursday December 18 2003.

Bund revitalization plan right on track

The city has completed preliminary planning for a major project that will revitalize land on both banks of the Huangpu River.

The project, according to Jiao Yang, a municipal spokesperson, will include the construction of a world-class entertainment and shopping area.

“Residents will have more public space for activities and they will be better able to enjoy nature,” Jiao told journalists at a news conference yesterday.

She said the city has completed urban planning for the Northern Bund and the Shiliupu –Dongchang Rd. areas, as well as for future ferry station.

The Waitanyuan area, known as the Bund Headstream, is to be preserved. She added that several corporate and residential structures have been successfully relocated, in accordance with the plan.

Meanwhile, details to renovate key buildings of the Southern Bund, including the Dongfeng Restaurant, a historical building, have been finalized.

‘By the end of the year, we will clear up advertising boards on top of the Dongfang Restaurant in a wish to restore its previous style, ‘Jiao said.

Meanwhile, the city will begin construction of an international passenger shipping service center, to be completed by the end of 2006, according to Jiao. The multi-million-dollar center will include a number of buildings and a dock.

The new dock will be able to berth three large cruise ships at one time. The center will extend on a plot covering 160,00 square meters.

‘Twin tower will be built in the Northern Bund that will house a five star hotel and corporate offices. Large areas of land on both sides of the Huangpu River are being turned into parks, officials said.

The revitalization plan, which involved the development of nearly 74 square kilometers of land, was launched in early 2002, and is expected to take about another eight years to complete.

Docks, factories and warehouses are being replaced by large patches of grassland, large scale cultural and entertaining facilities and riverfront residential quarters and office grounds.

This article appeared in Shanghai Daily Newspaper on Wednesday December 24 2003.

City cool to central heating

System said to prevent power outrage

With temperatures dropping and the city warning of the possibility of power shortage this winter, the debate is on whether residential buildings in Shanghai should install central heating or stick with individual heaters in each apartment.

A recent survey of 1,658 residents of Shanghai, Nanjing, Suzhou, Hangzhou and Ningbo suggests the vast majority of people in the region are not interested in installing central heating, saying it costs too much.

But Shanghai energy experts say central heating would not only reduce costs, but would also save power, helping the city make through the winter with fewer outrage.

The problem dates back to the country’s central planning days when the state government decided that cities north of the Yellow River would have central heating in residential buildings while those south of the river would not.

The central heating systems used in cities like Beijing and Tianjing lack flexibility, however, as residents can not choose to heat one room while not heating another, or adjust the room temperature.

That would make it expensive to use, and companies in the north must pay heating subsidies to either their employees or firms that provide the central heating during the winter to help them cope with the added expense. Firms in the south pay no such fee.

“I prefer my own heater as it is more flexible,” said Li Min, a local university student.

Property developers in Shanghai say they are interested in installing central heating in new buildings as the systems are expensive and there is little demand for them.

While the systems would make new apartments cheaper to heat, that does not make up for the added expense of building the units in the first place, they say.

But the energy the central heating conserves could go a long way to help the city meet power demands during a period of shortage.

According to Shanghai Electric Power Co., which saw power consumption jump 40 percent last week as temperatures dropped, the city faces a shortage of up to 2 million kilowatts of power this winter.

This summer, about 40 percent of power was used to support air conditioners during peak times, forcing the local power authority to adopt conservation measures that forced some industries users to reschedule production or shut down for several days.    

This article appeared in Shanghai Daily Saturday-Sunday January 3-4 2004.

Underpasses for Middle Ring

Two new underpasses will be built at Middle Ring Road in Shanghai, the city government said yesterday.

A major purpose of the new roads is to avoid destroying a century old university campus and a villa style guesthouse in the area.

The decision to carry out the project, which will cost the government millions of yuan, was prompted by growing complaints that the elevated roads are starting to take a toll on Shanghai’s beauty.

‘The city’s landscape is being eroded by the development of elevated roads, whose construction begin in the 1900s,’ said Chen Youhua, a chief engineer of the Shanghai Urban Planning Administration Bureau. ‘That’s why we have decided to choose the underground option, though it will cost much more than an elevated road.’

One of the underground roads will run through the old and new campuses of Fudan University in the city’s northeast.

Another section will be constructed below Hongmei Road around the Xijiao Guesthouse.

Each subterranean passage will be about one kilometer in length, but the cost will be particularly high because complex cables and pipes need to be relocated.

‘If we do not process with this project, Fudan University would be divided and the Xijiao Guesthouse would be capped by the elevated road.” said Chen.

Origianl plans, first draw up in 2000, did not call for an underground section of the 70-kilometer-long Middle Ring Road, a massive construction project that is not expected to be completed for another three years.

The entire road system, when completed, will be comprised of eight lanes and will connect downtown with the city’s outer limits.

Altogether, the cost of digging underground tunnels along with related residential facelift project will be about 10 billion yuan (US$1.2 billion).

In the future, more underground passages will be built to better preserve urban landscaping, Chen said.

Additionally, the bureau is planning to zone eight different ‘landscaping areas’ along the Middle Ring Road by the end of 2010 while strictly limiting the construction of tall buildings in the area, officials said.

Since city planners first introduced elevated roads, some 200 kilometers of elevated roads have been built to handle the city’s increasing number of cars.

While elevated roads do facilities transportation, they are generally regarded as an eyesore.

One example is the Yan’an Elevated Road that severely reduced the view of Shanghai Exhibition Center – a signature historical building.

This article appeared in EuroBiz, Journal of the European Chamber of Commerce in China March 2004 Issue.

The Rebirth of the River

Long relegated from prominence, the Huangpu River is set to return to its role as the heart of the city of Shanghai

For many years now, the Huangpu River has been lost at the heart of Shanghai, released to being nothing more than inconvenience between the two halves of the city – Puxi and Pudong. An obstacle to be traveled either underground without seeing it at all, or far above from one of Shanghai’s mammoth bridges.

The river’s relegation is in stark contrast to the role it once played when Shanghai was the premier financial and trading center of East Asia. In fact the Huangpu River was at the forefront of all business activity in the city up to the 1980s. Shipping brought goods in and out from wharves on and around the Bund area. The Bund and was the center of the city’s business and social activity, and virtually all business used the river to get their bearings.

From the time the city fully reopened for international business in the late 1980s and early 1990s, the role of the river area declined.

Today, the Huangpu River barely features in the scheme of things for most foreign businesses, while those that have to get from one side to the other curse it as they queue to get through the tunnel. But things have changed. Shanghai is nothing if not a dynamic city. Now buyers pay a premium for an apartment with a river view, new office buildings alongside the river are coming to market and blocks of land alongside both banks of the river have been earmarked for the facilities associated with the World Expo to be held in Shanghai in 2010.

Overall, plans by the Shanghai government to redevelop both banks of the Huangpu River look set to revitalize the heart of the city.

Multi nodal city

Business in Shanghai first congregated in Hongqiao in the early 1980s, and Xujiahui followed. West Nanjing Rd. and Middle Huaihai Rd. also took up the places as prime commercial locations in the mid-and-late1990s, then various locations in Pu Dong started to develop into central business districts too- something unimaginable as recently as 10 years ago.

The multi-nodal CBD model is set to grow another node or two in Shanghai with new areas competing with the existing centers. The end result should be rather pleasing with increasing synergy between areas that will start to blend into one another as infill development takes place in the years ahead.

In 2002, the Shanghai Municipal Government formally announced ambitious plans to redevelop both banks of the Huangpu River. The redevelopment involves an 85-km stretch and a total site area covering a vast 73 square KM from Xupu Bridge in the south all the way north to Wusong Port.

A whole range of new developments are being planned with several main aims: to establish a series of comprehensive functional areas, to inspire riverfront activity, return green space to the people, increase accessibility to the riverside, improve the quality of life, protect the culture of the city, preserve historic buildings, create unique landscape features and strengthen the profile of the city.

In terms of the master plan of the redevelopment, there are four main areas straddling the river, namely the Yangpu Bridge area, the north Bund and Shanghai Shipyard, Shiliupu and Dongchang Rd. area, and Nanpu Bridge area.

The attempt to revitalize the Bund by selling off the historic waterfront buildings in 1994 meeting time and place with resistance to pricing. Valuers overestimated the historic value of the dilapidated buildings and the government was unable to offer land behind them to permit modern office facilities to be combined with the grand old buildings. Once the residents living in squalid conditions have been relocated, the latest efforts to give the area a new lease of life should result in a more fitting role for the area, boosted by the renewed buzz of a compact living and working community

Meanwhile, in the riverside area at Pu Dong, there are already a number of high quality of buildings, either completed or under construction, that are doing even more to change attitudes towards the area. Most of these buildings are built to the highest standard anywhere and, cost notwithstanding, are fast becoming the most sought after properties in Shanghai.

The investment in redevelopment is huge but the opportunity cost of not redeveloping these areas is even greater. The renaissance of the Huangpu River will help Shanghai to raise itself to another level in the relentless pursuit of a position among the top five major global centers.

Shanghai’s future property development centers

See a map below  

North Bund and Shanghai Shipyard

An international cruise ship terminal will be constructed at the North Bund. The surrounding areas will see hotels, apartments and riverside offices. Combined with the redevelopment of Shanghai Shipyard on the Pu Dong bank opposite, the area will complement the Bund and Lujiazui. The area will include tourism, entertainment, office and residential elements. As for Shanghai Shipyard, refurbishment will turn the area into a hub with museums and commercial buildings, as well as retail and service apartment

Waitanyuan

The Bund area is finally to be given a realistic chance of recapturing something of its past glory in the shape of a major upgrade of the area stretching north from the Peace Hotel to Suzhou Creek. The ‘Waitanyuan’ project comprises hotels, offices, retail, housing and a park. One of the current bridges over Suzhou Creek at the north end of the Bund is also to be replaced with a tunnel to enable the community to benefit from a better environment. Refurbishment of the eastern part of Nanjing East Road has also been mooted for some time with possible pedestrian station.

Nanpu Bridge Area

In the Nanpu Bridge area south of the main city center, a modern residential, entertainment, exhibition and tourism hub Is planned in what is currently one of the most run down parts of the city. The 2010 World Expo facilities will be built between the Nanpu Bridge and Lupu Bridge. Artificial islands museums, marinas, an Expo village and other developments will be built to create for use in the expo and long afterwards. The e rapid progress in the development of Pu Dong and the success of the Lujiazui Finance and Trade Zone has allowed Shanghai planners to move forward with this redevelopment which boost the development of the Pu Dong area ad consolidate the position of Lujiazui in the business community. Dongchang Road Area has been earmarked for a high–end residential community. The Nanpu Bridge Area will become a mixed cultural and entertainment center comprising trade and commercial facilities, high quality modern residences and elegant landscaping.

Yangpu Bridge Area

The Yangpu Bridge area will be transformed in a residential and business area through the construction of riverside residential communities and the establishment of research and education facilities. Old factories, docks and warehouses along this part of the river will be redeveloped for housing, entertainment, tourism and commercial purposes. Landscaping will put the Yangpu Bridge at the focal point of the area using a combination of historic buildings, riverfront community centers and green space.

Shiliupu

The Shiliupu area at the southern area end of the Bund, and the Dongchang Road area on the opposite bank will be redeveloped into a new tourism and retail area with limited residential and office functions. Fortune Plaza is one such development comprising seven low-rise office buildings.

The coming Renaissance of the Bund 

 This article appeared in 'QUO Magazine' Issue No 4 April 2004

Makers of designer clothing, watches and jewelry are pouring into Shanghai, one of the world’s fast-growing economies. Established players such as Emenegildo Zegna and Louis Vuitton are expanding, while newer entrants like Bulgari and Coach are joining the fray. In April, a Giorgio Armani flagship store is set to open on Shanghai’s Bund. With its fast-rising incomes and unapologetic taste for conspicuous consumption, Shanghai would appear to be a fantasy market for the world’s deluxe labels seeking to offset the maturing of the US, European, Japanese and other traditional markets.

As the Huangpu District government aims to add shops, restaurants and recreation facilities to the Bund’s solemn hub of banks and insurance companies, the Bund area is expected to get a renaissance with new recreation and retail outlets brightening up the financial center. The government is ‘trying to attract global brands to the area to create a high-end central business district,’ said Mr. Jiang, director of the foreign economic commission of Huangpu District.

The Italian company Emenegildo Zegna Group is likely to become a tenant at the Bund 18, which is expected to open in September. The Bund 6, another redevelopment project, is due to open by the end of the year, also for retailers and restaurants. But the upcoming superstar will be Giorgio Armani, with a Giorgio Armani boutique and an Emporio Armani store next to each other covering a total of 1100 sq meters scheduled to open this month in the historic. Three on the Bund building, including the possibility if the transference of the Peace Hotel to the Jardine Matheson Group, the Bund will divert attention from other up market spots.

Today Shanghai certainly qualifies as the world’s most talked about city. Any the Bund is definitely the most prestigious, unique and significant location in Shanghai. With all the new developments coming about by the end of the year and in the future, the Bund area will become more cosmopolitan and enjoy more credibility, as not only the symbol of Shanghai but the most fashionable area in the city.

These articles appeared in Section ‘Metro’ - Shanghai Daily Newspaper Saturday-Sunday April 24-25 2004

Gubei area housing space set to swell

The Gubei area, which has the largest concentration of expatriates in Shanghai’s western Changning District, will see its housing space more than double under second-phase development.

Nine developers gathered at the New Gubei Real Estate Summit yesterday to launch the New Gubei –the expansion of the present international community.

Situated along Hongqiao Road, the current, or the first phase Gubei area offers 700,000 sq. meters of residential and working space mainly for foreigners. About 2,000 expats from 30 countries and regions are said to live in the area, which has more than 10 mansions, such as Yadia Garden, Victoria Garden Mansions and Paris Garden.

The second-phase project will add another 1.03 million sq. meters of living space to the area built by developers, including Hutchison Whampoa Ltd. New Changning Group and Shanghai Hongkang Real Estate Construction Co., Ltd.

According to statistic, Shanghai is home to more than 300,000 expats from 119 countries and regions. This population is expected to reach 800,000 over the next ten years.

‘As an increasing number of multinational companies set up branches in Shanghai, housing demand from expats will grow significantly,’ said Zhang Hongming, director of the Real Estate Department under the Shanghai Academy of Social Science.

Currently, many international communities have emerged in the citty, like Gu Bei and the Biyun area in Pu Dong..

“Gu Bei is famous among expats who are included to live with their natives,’ said Sun Yong, board chairman of Shanghai Gu Bei (Group) Co., Ltd. the area’s largest landlord. ‘The new community, aimed at high-end customers, will also be successful.’ 

Degussa opens R&D in Shanghai

DEGUSSA AG, Germany’s third largest chemical firm, opened its 10 million-euro (US$11.9 million) research and development center in Shanghai yesterday. 

The firm also pans to pour 200 million euros to set up manufacturing facilities in China, said senior official with the firm.

The 6900 square meter R&D center is the most diversified of the 10 major Degussa R&D center in the world, including laboratories, marketing facilities, rooms for applications engineering seminars and technical after sales services, the company said.

It broke ground in May 2003 and was completed in March.

‘The opening of the R&D center in Shanghai will help us to get closer with our customers in the country,’ said Utz-Hellmuth Felcht, chairman of board of management of Degussa AG. ‘China is growing fast in a direction to consume more specially chemicals which are high vale added products

The vast majority of staff working in the center will be Chinese, Flecht added.

‘WE are also preparing to invest 200 million euros over five years to set up manufacturing facilities in China,’ said Eric Baden, president of Degussa (China) Co., Ltd.

The location of the project is expected to be finalized in the second quarter of this year.

Kang Kai, an analyst with Guotai Jun’an Securities Co., Ltd. said the investment is a large one for the specialty chemical industry and showed Degussa’s ambition to tap China’s expanding specialty chemical market.

This article appeared in Shanghai Daily newspaper Tuesday December 21, 2004

Siemens to grow in China

SIEMENS AG, Germany’s largest engineering company, announced yesterday in Shanghai it would invest 1 billion euros (US$1.19 billion) in China to penetrate in to the fast-growing market for industrials including telecommunication, power, medical equipment and transportation.

The company also aimed to double its revenue in the country in five years. Its Chinese sales have reached 4 billion euros annually,, accounting for more than 10 percent of its global income.

“China, as you all know, is the market for future, “ Heinrich V Pierer, president and chief executive officer of Siemens, said yesterday at a conference in Shanghai. ”In this land, we face many challenges to master and meet more opportunities to explore.”

As one of the early bids in China, Siemens started its business in the country in 1872.

Siemens established the first Chinese office in Shanghai in 1904, a century ago.

“China will hold Olympic Games in Beijing in 2008 and the World Expo 2010 in Shanghai. We see many opportunities from that, “Pierer added.

Siemens said investments will be poured into the company’s various business sectors, including telecommunication, power generators, medical equipment and lighting equipment business.

The company said yesterday it would increase the annual production capacity of its Shanghai-based mobile phone manufacturing base from 14 million to 20 million units.

Meanwhile, Siemens had signed a deal with Ningbo Bird Corp. the largest home grown handset market in China, under which Siemens’ handsets will be sold through Bird’s 30,000 stores covering the whole country.

“Combined with Siemens’ advanced technology and Bird’s strong distribution channels, both sides will benefit from the deal,” said Bird’s Vice General Manager Dai Maoyu.

Siemens invested in the development of China’s exclusive third generation telecommunication standard, Time Division Synchronous Code Division Multiple Access.

“We will help TD-SCDMA to become not only a Chinese standard, but also a successful standard in the world,” said Pierer.

The company this month also formed a power venture in Henan Province which strengthened Siemens’ position in the industry.

China annual power shortage gap is expected to hit 20 million KWH due to the growing industry-use demand, according to China State Grid Co., the country’s biggest grid operator.

‘It has to establish many joint ventures to win the government’s approval to enter state-controlled industries such as telecom and power equipment,“ said Ou Yang Shu Jia, an industry observer under China Electric information Center.

This article appeared in Shanghai Daily newspaper Dec 20, 2004  

  Metro No4. Limps Ahead

 Workers laid the last stretch of track yesterday for what will become the first phase of the city’s new Metro Line 4. 

A missing link that resulted from a tunnel cave-in will be completed at an unspecified date in the future, delaying the start of a 33-kilometer mass transit ring around the city. 

The completion of the rail installation at least ensures that 13 out of the line’s eventual 17 stations will be in operation by the end of next year, authorities said.

At that point, the new line will be jointed at each end to Metro No.3, allowing commuters to rravel from near the Sofitel Jin Jiang hotel in Pudong in a huge counter-clockwise are to the Luwan District on the Puxi side of the Huangpu River.

 “The 13 stations, together with nine stations on Metro Line3, from a “C” shaped track running through the city’s downtown areas,” said Yu Jiakang, a senior engineer at the Shanghai Tunnel Engineering and Rail Transit Design and Research Institute.

 The damaged section, which will comprise four stations linking Luban Road Station in Puxi to Tangqiao Station in Pudong, still has a long way to go.

 On July1, the project was near completion when water poured into a tunnel and touched off major ground subsidence near the Huangpu River.

 One building collapsed, three others titled and a part of the flood wall toppled. No one was injured but the accident caused 150 million yuan (US$18 million) in damage and severely delayed subway construction.

 Three senior managers were arrested for malfeasance.

 Engineers said the cave-in area is deep, and the city had to import special machines from Japan to repair the damage.

This article appeared in Shanghai Daily newspaper Monday Dec 27, 2004

 Fat Expat Compensation Packages Decrease

Perhaps many expatriates need to lower their salary expectations in the coming years. Expatriate compensation and benefits packages in China are not as robust as in previous years as companies classify expat professionals more rigorously. 

Expatriate numbers in China continue to rise, driven by the set-up and the ongoing shortage of local managerial and technical talent. 

Take Shanghai for example. In the first quarter of this year, 2,954 foreigners received work permits, more than a 25 percent increase from the same period last year, according to the Shanghai Municipal Labor and Social Security Bureau. 

A recent report produced by Hewitt Associates, a global human resources firm, reveals that attractive expatriate packages still exist. 

The report is a joint effort between Hewitt and the American Chamber of Commerce. It covers the expatriate compensation and benefits practices for 122 foreign enterprises across nine major industries in Beijing, Shanghai and Guangzhou. 

Still, the report concludes that packages with lavish benefits and extensive cash incentives have been replaced with leaner arrangements. 

A prime example is the continuous decrease of expatriate cash premiums in proportion to total cash pay. 

The premiums, typically provide to expatriates hired on global terms, have been decreasing 5 percent a year from 16.5 percent in 2001 to 11.5 percent in 2004. 

The reason for the change in expat benefits packages lies in more stringent cost-control measures. 

The report finds that when foreign companies manage expatriate benefits, they tend to divide expat professionals into four groups: Westerners hired outside China; Asians, mostly from Singapore as well as China’s Hong Kong and Taiwan; foreigners hired locally in China; and Chinese returnees, preferably those who have spent three years or more working abroad. 

The majority of the participating companies in the Hewitt analysis have already started treating globally transferred and Hong Kong transferred expats differently from other expat employee groups. 

This year more firms have started to give less generous packages to China-hired foreigners and Chinese returnees. 

As a result, discrepancies in guaranteed pay are noticeable. 

Generally speaking, cash compensation for China-hired foreigners fall 20 to 30 percent below Westerners hired outside China or Hong Kong expats. 

When it comes to Chinese returnees, the gap is up to 60 percent less.  

In the case of top executives, Hong Kong expatriate salary levels continue to lead the market---about US$ 300,000 a year. Western expatriates hired outside China earn about US$30,000 less than Hong Kong expatriates. 

Taiwanese and other Asians rank No.3 on the list. China-hired foreign executives earn about US$ 180,000 annually. 

Chinese returnees, even though they assume the roles of top executives, make a little more than 50 percent of what their Hong Kong counterparts earn. 

As more and more expats seek job opportunities in China, chances are companies are going to design specific benefits packages for different expat groups so that their business can grow in a more cost-effective way.

Northern Extension of Metro Line Opens

Park Sees US$300m Exports

Spinning Giant Bound for Bund

  This article appeared in Shanghai Daily newspaper Tuesday July 12, 2005

Creek Bank to be Lined with Refit shikumen

Zhang Jun

 A 3-KIL OMETER stretch along the southern bank of Suzhou Creek in Huangpu District will be lined with newly decorated shikumen alleys, warehouse galleries, museums and teahouses by 2010, according to a preliminary plan put together by the district government. 

The city government will provide most of the funds to support the conservation of old houses with only commercial outlets----such as restaurants, galleries and stages----open to private investors. 

Most residents of lane houses, or shikumen, in the area will not be forced to leave their homes, but extensive renovation will be conducted to shift the functions of various old constructions, mostly warehouses.  

“We will not follow the Xintiandi development pattern,” Chen Youhua, a senior engineer with the Shanghai Urban Planning Des9ign Institute which created the plan, said yesterday. 

“Our plan aims to restore the original living atmosphere of the region including original dwellings and old-Shanghai-styled street scenes.”

 He said such scenes include trolley cars, candlelight coffee bars and teahouses, laohuzao--- an old-fashioned shop where people bought hot water----and antique shops.

 Some warehouses will be turned into art salons and theaters.

He said the amount of investment will not be known until the plan is finalized.

 The 3.2-kilometer south bank of Suzhou Creek, which extends from Waibaidu Bridge near the Bund to Chengdu Road N., includes hundreds of shikumen houses, extensive residential lanes and eight key warehouses.

 A major historic shikumen site is Zunde Lane on 136 Xiamen Road which was constructed in the early 20^th century and still accommodates 958 families.

 According to the preliminary plan, the 3-kilometer area will be divided into three functuional sections: a residential area froom Xizang Road M. to Chengdu Road N.; a service and trade area from Xizang Road M. to Henan Road M.; and a tourist area near the Bund.

 However, some architecture experts worried that the beautiful riverbank scenes will be affected by the existing residential high-rises along the bank

Overseas Funds inflow Climbs

Zhu Yanyan

THE inflow of foreign funds to China’s mainland by individuals last year rose form a year earlier in anticipation of a revaluation in the Chinese yuan in the Chinese yuan in 2004, with much of the money going into the booming real estate market.

Foreign currencies brought by individuals into the mainland totaled US$3.96 billion last year, according to an anti-money laundering report by the People’s Bank of China yesterday.

The inflow climbed from US$2.25 billion in 2003, which was tracked by the State Administration of Foreign Exchange then.

“Overseas investors had banked that yuan would be appreciated last year, so they invested in the mainland and that should be part of the reasons for the expanded overseas capital inflow,” said Zhao Xiaoju, president of Shanghai International Banking and Finance Institute.

Most of the individual overseas capital came from the United States, Hong Kong, Taiwan, Japan, South Korea and Singapore.

Capital from the United States reached US$1.4 billion, accounting for 35.53 percent of the total. About US$1.36 billion came from Hong Kong., making it the second-largest overseas capital income source at 34 percent.

The inflow exceeded the US$964 milllion which went to overseas markets last year.

The increasing overseas capital injection into the mainland, however, won’t bring too much pressure on the government to raise the value of its currency, said experts.

“Factors like a fast-growing economy which may push the government to raise the value of the yuan have been weakened. The economy will slow this year,” said Yi Xianrong, an economist at China Academy of Social Science.

A report by the National Development and Reform Commission’s Macroeconomics Institute, a government think tank, predicted Chinese mainland’s economic growth will slow to 8.6 percent in the third quarter and to 8.2 percent in the fourth quarter, taking full-year growth to 8.8 percent, significantly lower than 9.5 percent last year.

Zhao said the increasing overseas capital inflow may add some pressure on the government when it studies an adjustment to the yuan’s exchange rate, but “it won’t be large because the central government has had some measures to control the low of hot money.”

The enthusiasm of overseas residents, both individual and institutional, for the bullish property market also boosted the inflow of capital as they came to buy houses in anticipation of handsome returns, said industry insiders.

Shanghai, for instance, saw 13 percent to 14 percent of the investors in the city’s high-end residential market to be from neighboring regions like Hong Kong and Taiwan, according to Wayne Zane, a researcher with Colliers International East Asia, a property consulting company.

Morgan Stanley paid 1 billion yuan (US$120 million) for a six-story commercial building in Shanghai on June 11, betting that the building’s value will increase due to its prime locatuion in the city’s most popular shopping street.

In April, Goldman Sachs invested 860 million yuan for a prime office building in Shanghai.

Wal-Mart Ready for Opening

Expat Organization Finds Pets Home

Dong Zhen

Two Old Parks Will Undergo Renovation

Fan Meijing

This article appeared in Shanghai Daily newspaper Thursday July 28, 2005

Expat Numbers on Increase

Yan Zhen

Carrefour Bids for Nextmart

Jin Jing

Mouse Sniffs 2010

Xue Wen

Pu Dong Considers Lujiazui Ring Road

James Chang

Redevelopment of Bund Proposed

Jin Jing

Shanghai Rated No 3 City

Xue Wen

Disney Puts Consumer Goods HQ in Shanghai

Zhu Shenshen

WALT Disney Co., which is scheduled to open its first theme park in Hong Kong next month, park in Hong Kong next month, said yesterday it has moved its Asia-Pacific consumer goods headquarters to Shanghai from Hong Kong to expand in the market. 

“Our management team has moved to Shanghai as the part of our long-term commitment to the market,’’ Rose Ng, country director for Walt Disney China, said yesterday. 

The company’s consumer goods division is now looking for Chinese partners, which it will license to manufacture and sell Walt Disney’s products, including Mickey Mouse, the Lion King and Nemo, according to the company’s Chinese-language Website. 

The company’s licensed partners so far have opened 1,000 Disney-brand stores on the Chinese mainland, according to Ng. 

Ng declined to reveal the detailed number of company partners in China, but she said the number won’t grow rapidly in the next year as the company is focusing on a “long-term cooperation relationship.” 

Disney invested US$3.5 billion to establish a theme park in Hong Kong that will open on September 12.  

Disney also plans to open a theme park in Shanghai in 2012, the Hong Kong Economic Times reported on July 30.

Work Begins On Bridge

Zhang Jun

Metro Station Renovations

Chen Liying

English Bookstore Opens Outlet Along Huaihai Rd.

Quistis Fan

Ericsson Set to Spend

Zhu Shenshen

Subway Ticket Prices to Increase

Chen Liying

Loneliness of The Long-distance Mum

Ayesha de Krester

Schools Seek Accreditation

Rachel Yan

Foreign Funds Show No Respite in Appetite for Commercial Properties

Xue Wen

Saks Fifth Avenue Aims At Bund Address

The Rule of The Thumb

Xiao Qi

City Laying Red Carpet to Coax Disneyland

Xue Wen

Subway Construction Set for The Fast Track

Zhang Jun

State OKs High-Speed Rail Links to Shanghai

Ji Mi

City to Have 8 Metro Lines in Operation by Next Year

Zhang Jun and Ning Bo

Sightseeing Tunnel to Be Transit Route

Dong Zhen

Another Rowdy Market Will Get A New Address

Fu Chenghao and Ayesha de Kretser

Morgan Stanley Buys Luxury Apartment Project Downtown

Xue Wen

MORGAN Stanley has acquired another apartment project in downtown Shanghai for about 760 million yuan (US$95 million) amid wide speculation the government will soon launch measures to curb foreign investment in the property market. 

Morgan Stanley has bought one of the Chateau Pinnacle’s three buildings. The Pinnacle is a luxury residence on Xingfu Road in Changning District. Morgan Stanley paid an average price of 28,000 yuan a square meter, a source familiar with the deal said yesterday. 

The building comprises 116 units with a total floor space of 27,031 square meters. 

Morgan Stanley will turn the residence into leased serviced apartments, which is believed to bring a 6 percent rental yield annually at lease, the source said. 

The company, which joins rivals such as Cititgroup and Goldman Sachs in actively seeking investment opportunities in the nation’s booming property industry, bought a residential property in Lujiazui for about 190 million yuan just two months ago. 

Citigroup Inc’s property unit said last week it plans to increase its investment in the Chinese mainland’s real estate market tenfold to US$800 million in the next three years. 

Several policy making bodies have expressed concern about foreign investments in the real estate sector as a potential source of property bubbles. There has been wide speculation that authorities will enact new policies targeting overseas capital in the near future.

 “It is possible that the authorities may raise entry barriers and slow the pace if approval for investment trusts.” Ma Jun, an economist with Deutsche Bank AG, said in a research note published yesterday. 

At least three types of investment vehicles are used by foreign investors to access China’s property markets. 

The first is investing in wholly owned companies or joint ventures for developing new property projects. Second is forming a locally registered private equity fund to acquire rental-producing properties such as serviced apartments and office towers. The third is investing via investment trusts such as overseas listed REITs. 

New Uses for Old Buildings

Xue Wen

US-BASED developer Portman Holdings, Citigroup’s property unit and state-owned Shanghai Xufang Group have pumped in US$105 million into a joint venture to redevelop Shanghai’s largest complex of shikumen style houses, a source said yesterday. 

Shanghai Hengfu Property Co., Ltd., the new joint venture, is to renovate the Jianyeli complex located at the corner of Jianguo Rd and Yueyang Rd in Xuhui district into a commercial project of serviced apartments, a hotel and retail shops. The project is due to be ready in early 2009. 

Jianyeli comprises around 200 buildings in stone-gate style, a form of row houses that were built exclusively in Shanghai during the late 19^th and early 20^th centuries. 

Shanghai Xufang Group, backed by the Xuhui District government, holds a 20 to 25 percent stake in the venture while Portman and Citigroup share the balance, the source familiar with the deal said. 

Jianyeli, a 25000-square-meter site in the center of city’s former French concession, was originally built by a foreign firm in the 1930s as the residence for its management staff. It was home to 260 families at the time, but was later packed with more than 1000 families with an average living space for each person of 2 square meters. 

The xuhui District government spent about 470 million yuan (US$58.75 million) to relocate all the 1093 families starting from 2003 and held a public tender late last year that attracted investors from the United States, Australia and Hong Kong. 

One condition set for the bidders is to retain the flavor of the surroundings and architectural style of historical neighborhood. 

The site is expected to be divided into three parts with its existing lanes-the eastern and middle lanes will be turned into serviced apartments while the western land will be renovated into a hotel.

What China's New Tax Rules Mean for Expatriates And High Earners

Case Studies Help Ease Tax Headache