China keeps on building like crazy, and there is good reason for that, Andrew Leung explains in his weblog. To deal with the rapid and unprecedented urbanization, cities need to expand at an feverish speed.
According to a recent McKinsey research report, China will be adding 350 million more urbanites by 2025, more than the existing population of the United States. The total urban population will reach 1 billion by 2030. There will be 221 cities with a population over one million, compared with 35 such cites in Europe today. In the process, 5 million square meters of roads will have been paved, 170 mass transit systems built, 40 billion square meters of floor space created in 5 million buildings, of which 50,000 will be skyscrapers, equivalent to 10 New York Cities (Preparing for China’s Urban Billion, McKinsey Global Institute, March 2009)….
As for the housing bubble, private mortgage lending in China is extremely conservative. You would be extremely lucky if you could manage to get a mortgage loan approaching 70%. Moreover, China’s banks are much better capitalized in comparison with their Western counterparts and most are supported by the state’s massive currency reserve.
China is decisively switching course with the latest 12th Five Year Plan (2011-15), channeling the country towards higher-quality, if slower, growth, with more domestic consumption and a more balanced, equitable, innovative and sustainable economy.
More in Andrew Leung’s weblog.
Andrew Leung is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch.
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