Realty check on a building boom
The locals of the Hyderabad-sized northeast metropolis with a centuries-old heritage were eager to show off the city.world Updated: Mar 11, 2011 01:07 IST
The locals of the Hyderabad-sized northeast metropolis with a centuries-old heritage were eager to show off the city.
They did not suggest that this first-time visitor to Shenyang see the landmark Mao Zedong statue or the imperial palace of the former Qing dynasty capital.
“You want to see Walmart? Wanda mall? Parksons mall?" asked a Shenyang student, on a street lined with Cartier, Armani and Starbucks.
Taxi driver San Guangmin informed that Shenyang is building its subway system. “I heard that Indians are very rich. Does Mumbai have a subway and tall buildings like this?’’ he asked and rattled off costs of an apartment in the slender unfinished high-rises cluttering the skyline in every direction.
While law makers in Beijing debated slowing down the GDP to 7% growth, I was in the capital of Liaoning province, an industrial powerhouse in no hurry to control breakneck growth and its taste for posh buildings and brands.
Premier Wen Jiabao recently said that China needs to invest in improving livelihood and reducing inequalities more than building skyscrapers. His words were aimed at calming the restless middle-class which cannot afford an apartment in cities with rising inflation and property prices. The evaluation of officials should be based on people’s happiness and not skyscrapers, Wen said.
So Beijing’s big populist announcement this week is an investment of $198 billion in building 10 million affordable homes in 2011, another 10 million next year and 16 million units from 2013-15.
The houses will be subsidised mainly through loans, land sales by local governments and central funds. Investment in real estate comprises 10% of China’s GDP and local governments will be reluctant to allocate prized land for cheap homes.
A new report forecasts that China, India and the US will account for over half the increase in global construction up to 2020. China will top the world’s building boom with a doubling of its construction market. By 2018, India will surpass Japan to be the third-largest construction market.
I asked San to show me lao (old) Shenyang. He was silent until we passed the rubble of low-rise brick homes. “Look, that was lao Shenyang.”