Category Archives: My Blog

Shanghai Real Estate Market Tightly Monitored

Shanghai wants to avoid a scenario similar to 2009 America’s housing crisis. The situation in the Chinese city, facing a surge in dubious real estate loans, reminds us of the situation in the United States before the subprime crisis which drove the world to the worst recessions since the Great Depression in the 1930s. In reaction to the surge of real estate prices in Shanghai, the municipality has forbidden bank loans for six major property agencies. This is another measure taken by Chinese authorities to cool down the housing market.

 

Chinese Economy Highly Dependent on Real Estate

Real estate, nevertheless, allows the growth to sustain and is one of the main pillar of the economic development of China. The housing sector accounts for 15% to 20% of China’s GDP in 2016. A slowdown or a rebound in the sector activity have direct and big impacts on the other industries that depend on it. The rebound of the real estate industry is one of the main reason of the recovery of the Chinese manufacturing sector in the last two months, after it dropped off in the last quarter of 2016, thanks to a massive increase in loans granted by banks.

Although Shanghai has already taken several measures to try to curb the increase in prices, the real estate market is still very dynamic. Industry players fight fiercely through advertising campaign to attract investors looking for opportunities to invest their money. If the city center  of Shanghai appears to be a saturated market, residential buildings in suburban districts sprout like mushrooms and experience the strongest rise in prices. The type of housing usually consists of nice apartments in premium compounds with onsite facilities. According to China Real Estate Index System, prices rose by more than 6% in suburbs of Shanghai like Songjiang or Jiaxing.

In Songjiang, property prices are between $5,000 and $13,000 per square meter. There was a slowdown after the strong increase (+ 17.5%) beginning of 2017, which lead the authorities to restrict the purchasing conditions for non-residents and increased the initial input required from buyers.

Since then, property prices have cooled down, but everything leads us to believe that the curve will continue to rise. In Shenzhen, the metropolis that faces Hong Kong, apartment prices have risen more than 57% since 2015. This could inspire landlords of other major cities of China. Especially since it has never been so easy to buy: interest rates have fallen six times last year. “The conditions for real estate buyers have probably been the most favorable for ten years,” said Steven McCord, an analyst for the real estate consulting firm Jones Lang LaSalle.

Lower interest rates

Shanghai implemented new restriction on the purchase of apartments and houses. According to Caixin, the city would consider increasing the initial contributions up to 50%, or even 70%, for purchasing a second home. However, with the increase of online banking services, it is now easier to obtain loans that traditional banks cannot grant.

According to the Shanghai-based Yingcan real estate analysis firm, private lending platforms lent 924 million yuan ($ 180 million) to finance these initial payments, three times more than in July 2015. The interest rates of these online services can reach 25% per year.

However, online finance is not the only one responsible. In order to be legal, real estate transactions must be done through agencies which take advantage of their position to act as intermediaries for loans, but also as a screen between banks and customers.

Since March 2017, banks refuse loans to the six agencies punished by the authorities. They are the largest agencies on the market. Investigations have also been launched against online finance since the beginning of the year.

Chongqing’s Unstoppable Economic Growth

Twenty years ago, Beijing raised this industrial city in Sichuan to the rank of province with the aim to develop the rest of South West China. Chongqing became a gigantic megalopolis that keeps growing while most of China is facing an economic slowdown.

 

 

A beautiful spring morning in Chongqing. A few rays of sunshine throw a timid light on the forest of skyscrapers usually plunged in a thick fog. We are precisely on the Yuzhong peninsula, the historical and geographical center of the city, one of the largest in the country, with Beijing, Shanghai and Guangzhou. At its end, where the Jialing River meets the turbulent waters of the Yangtze River, the longest river in Asia, dozens of cranes are building what will surely become the new Chongqing symbol in 2018: Raffles City, a set of 8 apartments and offices buildings, two of which are 300 meters high.

Four of Raffles City’s eight towers will be connected by a glass corridor suspended 280 meters above the ground. Construction began in 2012 with CapitaLand, a Singapore real estate developer. Total cost: more than 3 billion dollars. This is the biggest investment ever made to date by a Singaporean company in China. So goes Chongqing.

While the rest of China is slowing down, this self-governing municipality of 33 million inhabitants, with a surface area of 82,300 square meters – larger than those of the Benelux countries or the Czech Republic – continues to be transformed into a modern city. In 2016, according to official data, the city recorded a double-digit growth rate for the fifteenth consecutive year: its GDP rose by 10.8%, against 6.6% for the national average, the lowest growth rate in twenty-six years.

Since 2007, without interruption, Chongqing is growing faster than the rest of the country. “Let’s take drinkable water production as an example, which is an excellent indicator of economic development,” said M. Sun, Suez Asia Vice President, in her northern city office. Between 2002 and 2016, in Chongqing, it increased between 12 and 15% per year. This is unprecedented in the world. In Europe, one turns between 1 and 3%. It is a very dynamic megalopolis! “So dynamic that the French specialist in the environment performs one-third of its activities in China. Drinkable water, wastewater treatment, etc. In 15 years, according to M. Sun, Suez invested about 550 million dollars in Chongqing, where the group runs five water plants.

China invests in cannabis in the United States

China is making a subtle move on the US cannabis market and in particular CBD, the legal component of cannabis in China and the United States that is well known for its therapeutic use.

Paving the way for Chinese investors

chinese investors expanding massivelyOn December 5, 2016, the US stock exchange site chineseinvestors.com entered into an investment plan with Shenzen Yuanrong PE Capital. On March 20, Chinese investors announced the launch of a pharmaceutical company in the Free Trade Zone of Shanghai for $ 1.4 million. Called XiBiDi (CBD in English), this laboratory should produce treatments and cosmetics based on CBD.

Chinese Investor explains on its website investing in research on Alzheimer’s disease and epilepsy over a period of two to four years, all under the Innovative Drug Development launched by the Chinese government.

Company CEO Warren Wang claimed, “Ultimately, our company will acquire or merge with CBD research and development companies based in China.” He added in his press release “Moreover, being located in the free trade zone is a significant advantage for both import and export. The elaborate treatments and medicine will be distributed in China as well as in the United States”.

Green Rush in Colorado

Chinese investor is a stock market analysis site published in Chinese and English. Chinese investors follow US market news via this platform.

cannabis in china

According to Warren Wang, “Chinese investors want to participate in the international cannabis market, they lack information, we give them.” It gives them the opportunity to invest in a Chinese company of cannabis that is established in the USA.

A smart and massive investment that hides other smaller but equally intelligent business moves.

Chinesinvestor launches ChineseCBDoil.com in January 2017. This site provides the delivery of products containing CBD in all countries where it is legal. Physically, investors should open specialty stores in US cities with an active Chinese community.

According to the PRNewswire site, chineseinvestor.Com would have already invested in the company Medicine Man in Colorado. This clinic is one of the largest in the state and distributes recreational and medical cannabis. A word that we prefer to avoid in Chinese investors releases. “Hemp Derivatives” seems to sound better for investors.

Vaporizers and smoking equipment

For several years Chinese manufacturers had understood that the market of medicinal plants vaporizing was exploding and that it was parallel to the medicalization-legalization of cannabis on the American continent.

the top vaporizers on the market

The top vaporizers on the market

On the other hand, they had until now an approach of simply cloning the best product sales on the market. So we quickly saw the blooming clones all more doubtful than the others of famous brands such as Volcano, PAX, VaporBlunt, Magic Flight, etc …

SMISS was the first to take the turn right, developing a particular range of “dry herb vaporizers” with a brand (FlowerMate) and modulations (autonomous shapes and ergonomics) around a ceramic convection technology mastered and quite reliable.

Thus the V5.0S is an excellent, first-rate vaporizer with a record autonomy and a conservation of the intense flavors. They have also developed a high-performance heating algorithm which guarantees us new products for the coming year! Visit this page acheter vaporisateur cannabis to find more on cannabis vape.

China relationship to Cannabis

According to travelers’ accounts, fewer and fewer cultivated plants have been found, and it has become harder to find cannabis since the government began to suppress it in the 1990s. However, cannabis is still cultivated and used traditionally In most of rural China. Its seeds are eaten grilled or raw, especially in Yunnan Province, which is traditionally a large center of agricultural activities.
Its fibers are always used in materials such as textiles, rope, and paper.

In China, cannabis is known as ma or da ma (“big hemp”), female, white flowers being referred to as-as ma fen (fragrant hemp branch) and seeds such as for as ma zi or Huo ma ren.

The medical use of cannabis is not established in conventional Chinese medicine, although various herbal preparations use cleaned seeds – especially as remedies for stomach aches and indigestion. Traditional medicine makes much greater use of cannabis and herbal remedies in general;

In fact, cannabis is considered one of the fifty original herbs of Chinese herbalism.

The Almighty China’s Economic Growth

China's economic is almost sustainable

A few months before the Communist Party Congress, this autumn, the authorities increase public investments.

With “only” 6.7% growth in 2016, China had its lowest performance in 26 years. But the prospect of the Congress of the Chinese Communist Party held in the autumn should boost these numbers. President Xi Jinping should be confirmed to his post for a further five-year term and the permanent political office will also be renewed.

Bringing back old recipes

Public support for the economy partly explains this rebound. In the first quarter, spending by the central government and local governments increased by 21% over one year. China’s industrial production grew by 7.6%, and investment in infrastructure surged 23.5%.

China's Economic Growth Explained

Investments in real estate rose 9.1%. The trend even accelerated in March, with an increase of nearly 12% in housing starts, which explains the record level of steel production.

Lastly, domestic consumption, which is a key factor in rebalancing the economic model encouraged by the authorities, is not to be outdone: retail sales rose last month by 10.9%, accelerating after an increase of 9, 5% in January-February.

The National Bureau of Statistics reports a powerful demand for home appliances, furnishings, and other items to develop new homes. Sales of cars also showed signs of recovery.

Fear of the bursting of a property bubble

The shadow of the Chinese economy is fueled by a rebound in China’s debt, which already exceeds 260% of GDP. Although bank lending declined sharply in March, credits associated with unregulated “shadow finance” (i.e., all credit mechanisms between firms and individuals) A record level.

Economists today believe that the overheating of the real estate market represents the single most important risk for Chinese growth. Doped by cheap credit, apartment purchases continue, despite strict restrictions in some twenty major cities, anxious to stop speculation. Last year, they had already taken action that had little effect.

Fight against corruption

However, the authorities are showing their willingness to continue the campaign against corruption, launched by Xi Jinping shortly after taking office in late 2012.

Yuan power on economical marketsXiang Junbo, chairman of the China Insurance Regulatory Authority, has been dismissed for alleged disciplinary offenses, reports the China News Agency on Monday (April 17th).

The Chinese anti-corruption authority announced on 9 April that an investigation would be opened for “serious disciplinary offenses” against him. It is the largest financial personality targeted to date in the government’s campaign against bad practices. Sixty-year-old Xiang Junbo was deputy governor of the People’s Bank of China and president of Agricultural Bank of China, one of China’s four major public banks.

The government’s website published a speech by Prime Minister Li Kequiang on Sunday (April the 17th), promising the utmost severity for “individual regulators and executives of companies that have embezzled money. Or have been guilty of collusion with financial moguls.”

Shanghai is the most expensive city for expatriates in Asia

                                                            View of Lujiazui financial district with Shanghai Tower, SWFC and Jin Mao Tower

According to a survey on the cost of living in the world, which gives the rise of the Yuan as the main cause, Shanghai is the most expensive city in Asia and the 7th most expensive in the world for expatriates.

Beijing, Hong Kong and Guangzhou are ranked 8th, 9th and 14th respectively, even surpassing New York’s famous district Manhattan, which ranked 15th in the survey by ECA International, a London-based consulting firm. Beijing is the second most expensive city in Asia.

Manhattan is the only US “city” listed in the top 20, with behind it another Chinese city, Shenzhen, in 16th place.

Four Swiss cities are also among the most expensive – Zürich, Geneva, Bern and Basel – and two African cities – Luanda, Angola and Kinshasa, in the Congo – which are respectively 5th and 6th.

“Despite the Yuan’s depreciation against the US Dollar over the summer, it has strengthened against most other major currencies, making Shanghai the most expensive city in Asia for Expatriates, “said Lee Quane, ECA’s regional director for Asia.

“This reflects the general trend seen in China, with Chinese cities gradually rising in our rankings over the past few years. It is likely that large Chinese cities will remain expensive destinations for mobile executives in the foreseeable future, “he added.

Shanghai and Beijing are on average more expensive than Manhattan for most foods, although fresh fruits and vegetables are more expensive in Manhattan. International clothing brands are much more expensive in Beijing and Shanghai than in Manhattan, while eating at a restaurant is much cheaper,” said James Davis, director of marketing and communications at ECA International.

ECA International investigations are based on a basket of day-to-day goods and services commonly purchased by expatriates, such as grocery products such as dairy products, meat and fish, fresh fruits and vegetables, As well as household items, general and recreational services, clothing, restaurants, alcohol and tobacco.

According to Davis, 500 grams of ground coffee costs 22.66 dollars in Shanghai, compared to 14.52 dollars in Manhattan. Similarly, a costume costing 676.67 dollars in New York is worth 1110.49 in Shanghai.

The marinara sauce is cheaper in Shanghai if you do it yourself. A kilo of tomatoes in Shanghai costs half of what it is worth in Manhattan.

“I find that food and other living expenses are relatively cheap if I only use Chinese products and eat at local restaurants but if you have the smallest urge for imported goods or international restaurants, Usually it’s quite expensive, “said Elizabeth Oppong, an American who worked in Shenzhen.

“I have reduced the costly habits like Starbucks and shopping in international stores,” she said.

Travis Joern, an expatriate in Shanghai for the Canada-China Business Council, tries to stick to local products. “For foreign food products, you are paying the extra import duties, but for local food, it’s quite affordable,” he said.

All Chinese cities climbed in the ranking from the previous year. Shanghai, Beijing and Hong Kong are all in the top 10 while they were 12th, 13th and 26th last year. Guangzhou went from 30th to 14th place, and Shenzhen climbed 29 places, going from the 45th to the 16th.

The Manhattan area also grew strongly from 38th to 15th place.

According to ECA, the rise in the US dollar between surveys has resulted in a rise of US cities in the ranking. Miami thus gained 62 places to move to the 71st.

“Although the prices of our commodity basket have fallen in some US cities, the rise in the US Dollar means that it is increasingly expensive for companies to move their personnel to the United States, “Said Michael Witkowski, vice president of ECA International New York.

China: 3 million deaths prevented each year by reducing pollution

China could save 3 million premature deaths every year by reducing air pollution to the level recommended by the World Health Organization (WHO), according to a study published Wednesday in The British Medical Journal.

Heavy pollution on Shanghai
The study was conducted by Chinese researchers who studied the effects of air pollution on deaths in 38 major Chinese cities – bringing together some 200 million people in total – between January 2010 and June 2013. During this period, the daily concentration of PM10 particulate matter (emitted mainly by road traffic, heating and agriculture) averaged 93.9 micrograms per cubic meter of air in the 38 cities, with a maximum of 135 μg / m3 in Urumqi, a city in northwestern China, with a minimum of 67 μg / m3 in Qinhuangdao, 300 km east of Beijing.

WHO recommends reducing this rate to an annual average of 20μg / m3, while according to figures published last year, more than 80% of people living in urban areas worldwide are exposed to Pollution levels exceeding this limit. M10 particles (with a diameter of less than 10 microns) are particularly dangerous because they can lodge in the airways.

Investigating the 350,000 deaths in the 38 cities between 2010 and 2013, researchers led by Zhou Maigeng of the Beijing Disease Control Center found that an increase in PM10 concentration of 10μg / m3 was associated with an increase in the daily number of deaths by 0.46%.
Exposure to PM10 was found to be more harmful overall among women and adults over 60 years of age, according to the study.

It also had a greater impact on cardiovascular disease with an increase in deaths of 0.63% for every 10 μg / m3 increase in PM10, while for other diseases, the increase was only 0.27%. The researchers agreed on the figure of three million premature deaths avoided each year in China by making a “summary calculation”, based in particular on a Chinese population of 1.33 billion.

They also added that this figure is likely to be underestimated because the effect of air pollution may be greater in rural areas (which have not been studied).

Jack Ma, New Icon of Modern China

Jack MaThe Chinese billionaire Jack Ma, real name Ma Yun, is the CEO of the Alibaba group that controls 80% of the Chinese online business. As the most representative icon of modern China, he just met Donald Trump, promising him that his group could create a million jobs in the US.

The former English teacher has become one of the main ambassadors of the innovative China open to globalization: a more sympathetic face to the West than the communist regime. The charismatic Jack Ma, founder of the e-commerce platform Alibaba, is even praised by the new American president Donal Trump who is usually very critical about China.

“Jack Ma is a great, great entrepreneur, one of the best in the world. Jack and I are going to do great things together” said Trump in a recent interview.

Jack Ma said he has never been seeking wealth with Alibaba and his only goal was innovation. His challenge was to create a tool that would change people’s lives, which made him one of the few popular Chinese billionaires in home country.

After failing twice to enroll university, he has been an English teacher for five years in Hangzhou, the capital of the industrial province of Zhejiang, not far from Shanghai. In 1994, he set up a translation agency called Haibo.

On a trip with a delegation of officials to Seattle in 1995, he discovered the Internet. When doing a search on a search engine with the word “China”, he found no results. He then came back with the conviction that China should open up to the Web.

Ma said to his friend “why not creating something about China?” They created a very ugly page for Ma’s translation agency. The next morning, he received five emails from three different countries: the United States, Japan and Germany. Ma understood there was something to do to open China to the Internet.

Why Alibaba?

It will take years to Jack Ma to find the concept of Alibaba. The beginnings of Jack Ma in the web industry are not great. He created a directory where Chinese companies could register and gain visibility but most of them did not see the need to appear on a directory without readers, in a country where internet is still very rare.

Jack Ma is quickly overtaken by other Chinese entrepreneurs better equipped than him, sometimes graduates from Standford or other prestigious American universities, and who are immediately successful with the creation of portals, a very popular niche in the late 90’s: this was the beginning of Sina and Sohu.

In 1999, Ma created Alibaba. In order to distinguish his portal to other Chinese portals, Ma decided to focus on small businesses and international demand. The main concept was to connect local and foreign companies to Chinese suppliers. This was the first Chinese web platform translated into English. As China’s economy surges in early 2000’s, the Chinese Internet along with the B-to-B platform Alibaba experience a rapid growth.

When Alibaba was launched In early 1999, there were only one million Internet users in China. But this figure was expected to double in the following six months, reaching 17 million in the summer of 2000. Today, China has the largest number of Internet users in the world with about 700 million users.