Expanded cross-strait ties to boost Xiamen real estate
Chen Jialong 19 November 2008
The historic visit this month of a mainland delegation to Taipei led by Chen Yunlin, the president of the Association for Relations Across the Taiwan Straits, signalled a further thawing of cross-strait tensions.
In their meeting, Mr Chen and Chiang Pin-kung, the chairman of Taiwan’s Straits Exchange Foundation, signed breakthrough agreements on postal, trade and travel links between the mainland and the island.
The agreements are expected to hugely benefit the economic zone which includes Xiamen.
Situated on the west side of the Taiwan Strait and facing the Taiwanese island of Jinmen, Xiamen plays an important role in cross-strait economic co-operation.
As a gateway to the mainland, Xiamen benefited from the creation of “mini communication links” in 2001 between Fujian province and the islands of Jinmen and Mazu in Taiwan.
The steady progress in cross-strait relations - in particular, the recent agreements to expand transport, trade and postal links - will have a positive influence on Xiamen’s real estate market.
Apart from Xiamen’s special geographical position that makes it an important market, the city’s past economic performance is worth looking into.
Xiamen is one of the first special economic zones established in the country in the 1980s. For the past 12 years, it has enjoyed an unbroken record of annual double-digit growth in gross domestic product.
Last year, total foreign investment in Xiamen rose 41.55 per cent to US$3.27 billion from a year earlier.
Total investment in the city’s real estate market reached 4.575 billion yuan (HK$5.2 billion), up 61.6 per cent from a year earlier.
Since 1978, when the mainland launched its economic reforms, more than 6,000 investment projects with foreign or Taiwanese funding have been developed in Xiamen, and foreign direct investment utilised reached US$14.2 billion.
Yet until now Taiwan capital has not been able to participate directly in Xiamen development, but has had to go through other channels such as Hong Kong.
But now that cross-strait links have been expanded, signalling a more stable political relationship between the mainland and Taiwan, the flow of Taiwanese money into the Xiamen market is expected to increase.
This in turn will further boost investor confidence in Xiamen.
With the expanded travel links, the number of Taiwanese visitors to the mainland through Jinmen is expected to reach 1.6 million to 1.8 million annually, from 1.3 million now.
Along with the growth in cross-strait trade and investment, more Taiwanese are expected to move to Xiamen and nearby provinces on the mainland for work or study.
This will increase the demand for property in Xiamen.
Xiamen is known for its advanced industrial plants, while its office and retail sectors are rapidly catching up.
To date three economic zones have been developed for Taiwanese investment, namely, the Haicang, Xinglin and Jimei districts.
These areas particularly welcome Taiwan’s high-technology, logistics and manufacturing industries.
Some Taiwan enterprises such as AU Optronics Corp, SpringSoft and Astro Corp have already set up research and development facilities in Xiamen.
The trend is expected to continue under the expanded cross-strait linkage.
The outlook for the Xiamen property market is therefore boosted by the improvement in cross-strait relations, as well as the ongoing development of the economic zone west of the Taiwan Strait.
These developments will lead to further economic integration of the cities of Quanzhou, Zhangzhou and Xiamen (known locally as the “Xiazhangquan areas”), which are all located in southern Fujian province.
Improvement in transport infrastructure and a better environment for investment are also expected to further boost the development of these areas.
The growing influence of Xiamen as an economic hub will raise the profile of many sectors of its property market.
The Chinese economy has not been spared from the impact of a global financial turmoil, but the long-term prospects of the mainland property market remain positive.
And Xiamen is expected to stand out given its unique role in cross-strait economic development.
Despite the enormous potential of Xiamen’s property market, prices of residential units in the city are not expected to significantly rise in the short term.
But closer cross-strait links will provide a strong impetus for medium and longer-term growth of Xiamen’s property market and economy in general.
Chen Jialong is the general manager of DTZ (Shenzhen)
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Expanded cross-strait ties to boost Xiamen real estate
Chen Jialong
19 November 2008
The historic visit this month of a mainland delegation to Taipei led by Chen Yunlin, the president of the Association for Relations Across the Taiwan Straits, signalled a further thawing of cross-strait tensions.
In their meeting, Mr Chen and Chiang Pin-kung, the chairman of Taiwan’s Straits Exchange Foundation, signed breakthrough agreements on postal, trade and travel links between the mainland and the island.
The agreements are expected to hugely benefit the economic zone which includes Xiamen.
Situated on the west side of the Taiwan Strait and facing the Taiwanese island of Jinmen, Xiamen plays an important role in cross-strait economic co-operation.
As a gateway to the mainland, Xiamen benefited from the creation of “mini communication links” in 2001 between Fujian province and the islands of Jinmen and Mazu in Taiwan.
The steady progress in cross-strait relations - in particular, the recent agreements to expand transport, trade and postal links - will have a positive influence on Xiamen’s real estate market.
Apart from Xiamen’s special geographical position that makes it an important market, the city’s past economic performance is worth looking into.
Xiamen is one of the first special economic zones established in the country in the 1980s. For the past 12 years, it has enjoyed an unbroken record of annual double-digit growth in gross domestic product.
Last year, total foreign investment in Xiamen rose 41.55 per cent to US$3.27 billion from a year earlier.
Total investment in the city’s real estate market reached 4.575 billion yuan (HK$5.2 billion), up 61.6 per cent from a year earlier.
Since 1978, when the mainland launched its economic reforms, more than 6,000 investment projects with foreign or Taiwanese funding have been developed in Xiamen, and foreign direct investment utilised reached US$14.2 billion.
Yet until now Taiwan capital has not been able to participate directly in Xiamen development, but has had to go through other channels such as Hong Kong.
But now that cross-strait links have been expanded, signalling a more stable political relationship between the mainland and Taiwan, the flow of Taiwanese money into the Xiamen market is expected to increase.
This in turn will further boost investor confidence in Xiamen.
With the expanded travel links, the number of Taiwanese visitors to the mainland through Jinmen is expected to reach 1.6 million to 1.8 million annually, from 1.3 million now.
Along with the growth in cross-strait trade and investment, more Taiwanese are expected to move to Xiamen and nearby provinces on the mainland for work or study.
This will increase the demand for property in Xiamen.
Xiamen is known for its advanced industrial plants, while its office and retail sectors are rapidly catching up.
To date three economic zones have been developed for Taiwanese investment, namely, the Haicang, Xinglin and Jimei districts.
These areas particularly welcome Taiwan’s high-technology, logistics and manufacturing industries.
Some Taiwan enterprises such as AU Optronics Corp, SpringSoft and Astro Corp have already set up research and development facilities in Xiamen.
The trend is expected to continue under the expanded cross-strait linkage.
The outlook for the Xiamen property market is therefore boosted by the improvement in cross-strait relations, as well as the ongoing development of the economic zone west of the Taiwan Strait.
These developments will lead to further economic integration of the cities of Quanzhou, Zhangzhou and Xiamen (known locally as the “Xiazhangquan areas”), which are all located in southern Fujian province.
Improvement in transport infrastructure and a better environment for investment are also expected to further boost the development of these areas.
The growing influence of Xiamen as an economic hub will raise the profile of many sectors of its property market.
The Chinese economy has not been spared from the impact of a global financial turmoil, but the long-term prospects of the mainland property market remain positive.
And Xiamen is expected to stand out given its unique role in cross-strait economic development.
Despite the enormous potential of Xiamen’s property market, prices of residential units in the city are not expected to significantly rise in the short term.
But closer cross-strait links will provide a strong impetus for medium and longer-term growth of Xiamen’s property market and economy in general.
Chen Jialong is the general manager of DTZ (Shenzhen)
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