The Chinese government officially lowered its GDP target growth to 7.5 percent in March, the first time since 2005 that the target has been moved south of 8 percent. After GDP growth of 8.9 percent in 2011 and 10.4 percent in 2010, the world’s second largest economy is definitely cooling. China has slowing exports and an even greater slowdown in imports, and continued deceleration is predicted for the coming months. The “bao ba” (“protect the eight”) target that the Chinese government has set as a minimum for the past seven years is now officially over. Should investors be worried?
From the Current Issue
For many foreign investors, China is still at the exotic end of their investment spectrum. However, China is opening up to new foreign capital across all sectors. To date, the focus has been on Beijing and Shanghai, but that is starting to move on to second-tier cities, such as Chengdu, Chongqing, Wuhan, Qingdao, Nanjing, Shenyang, Dalian, Tianjin and Hangzhou.
In 2012 Australia emerged on another radar screen: as a favored destination for global real estate investment. The 2012 AFIRE survey ranks Sydney fourth in non-U.S. cities in choice of location for global investment, after London; São Paulo, Brazil; and Paris.
After fears heightened following the sovereign debt events in Europe and the United States during the summer of 2011, economic sentiment has since shifted in different ways across the major global regions. Despite this, global demand for investment in real estate continues to remain strong, as evidenced by an 18 percent increase in global transaction volumes in 2011.
Dr. Richard Barkham, group research director at Grosvenor, is author of a book titled RealEstate and Globalisation. RichardFleming, editor of The InstitutionalReal Estate Letter – Europe, recently spoke with Dr. Barkham about the reasoning behind his new book, how and why investors should consider real estate investment in the wider context, and the role of real estate in the investment world at the moment.
The demographics in China are compelling. Due to the one-child policy implemented decades ago, the seniors cohort of the population has steadily increased while the number of young people to take care of them has declined.