The ULI’s 2016 Asia Pacific Summit in June revealed several sources of capital generated by a growing middle class in China as well as the emergence of Japanese institutional capital. Developers are buying land in key gateway cities to develop product to satisfy emerging demand. But, according to more than one investor, the long term trend remains for more capital to flow outside China.
Audience members at the conference were polled on which countries outside of Asia that they would invest in over a ten-to15-year time horizon. North America was the preferred market (53 percent of respondents). A surprising 16 percent selected the United Kingdom and only 8 percent chose Germany (before the UK vote to leave the European Union). Among Asian markets, China was selected by 46 percent, followed by 19 percent in Southeast Asia and 15 percent in India; Japan only recorded 7 percent of respondents. Although only an informal survey, the results supported the dominance of both North America and China as key targets (although considerable concern was voiced on the upcoming U.S. national election.
Parag Khanna, senior research fellow at the National University of Singapore just completed a book that stated “We’re accelerating into a future shaped less by countries than by connectivity.” He observed that “connectivity is destiny — and the most connected powers, and people, will win.” Khanna projected that the most important element of this connected future will be the growth of megacities with populations topping 10 million.” He went on to observe that single cities dominate the economy to the detriment of smaller urban areas.” He observed that China and India are trying to diversify. China spokesmen have stated that the world’s largest population is aimed toward a country of 26 megacity hubs with all economic activity connected to these hubs.
Senior Chinese executive Vincent Lo explained the “Belt and Road Initiative” is a development strategy launched by the Chinese government to promote economic cooperation among countries along several proposed trade routes. The “Belt and Road initiative” is named after the “Silk Road” made famous by Marco Polo as the only route to transport Chinese silk to European markets in the 21st century. The new version is planned to include both land and sea routes linking future mega-centers between east and west, currently sponsored by 57 nations in four continents.
“The proposed overland Silk Road Economic Belt focuses on linking China with Europe through central Asia and Russia; with the Middle East through central Asia; and with Southeast Asia, South Asia, and the Indian Ocean.” This is truly a world project with the proposed routes passing through 65 countries with a total population off 4.4 billion.”
Excerpts from the July/August 2016 Urban Land Magazine
by Dr. David Forster Parker
October 12, 2016
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