Publications

- December 1, 2021: Vol. 13, Number 11

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Riding the wave: How investors can make a splash in China’s logistics market

by Seng Hong Teng

In recent years, China’s logistics sector experienced a record wave of domestic and foreign capital inflows. This kickstarted a modernisation phase similar to that happening across Asia Pacific, which arose from a visible shortage of good-quality logistics facilities, with the market relatively non-institutionalised and dominated by older warehouses. At the same time, the demand case for prime logistics in China continues to build on rising consumption underpinned by a growing middle-income urban population, strong ecommerce adoption, national-level logistics infrastructural upgrades, and emerging uses for differentiated facilities, such as cold-chain logistics and automated warehouses.

Macro demand drivers

China’s latest five-year plan aims to raise the urbanisation rate from 60 percent to 75 percent by 2035, driving the middle-income segment from an estimated 254 million households in 2020 to 383 million by 2030 — the increase alone exceeds the

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