Damian Holmes

China was only acutely affected by the Global Financial Crisis but the market has over grown some market sectors such as residential and  high end hotels this is due to the Expo and also some of the 2009 stimulus money entering the development market. Currently the government is increasing the use of financial instruments and tools to cool the residential market. Also recently over the last week or so the Shanghai stock exchange is correcting not due to the Greece and Euro issues but the market got to hot to fast with P/E ratios and share prices rising too quickly so a correction was imminent. So the China market is somewhat decoupled from the rest of the world.

The Chinese stock market is often one of the only investment outlets for people to place their cash and as property was going off and the government was making it increasingly harder to invest in property, money went into the stock market too quickly now the market is correcting people are moving to gold as a safe haven.  So where to from here is the question on many people’s minds as money starts pouring into gold?

Well my guess is that Chinese can only invest so much in gold and the stock market and the investors will start to move towards domestic consumption but will continue to move more money offshore to cheap property in the USA and Europe hoping that the price of property will rise over the next few years quicker than the yuan appreciates.

Domestic consumption will be fueled by creating new retail centres. Although commercial office space will continue to flow along but the supply is currently too high for the requirements of many cities however, retail has lagged with retail mostly only developed as street front shopping with stores usually only 20-50 square metres therefore more energy will be heading towards developing retail shopping centres with anchor department stores.

Shanghai, Shenzhen, Guangzhou and Beijing are currently already catered for with many retail centres areas with a wide variety of configurations. Therefore, developers are now shifting focus to cities such Hangzhou, Suzhou, Wuxi, Ningbo, Qingdao, Tianjin, Xiamen and other Tier 2 & 3 cities along the coast as retail demand is growing fast with brands already having distribution and logistics networks along the coastline of China.

I also see more and more companies looking to invest in new distribution companies to import products from abroad for domestic consumption or partner with existing companies to create new distribution channels. Although there is a big focus in China on luxury brands with numerous stores opening across China and especially in Tier 1 cities such as Shanghai and Beijing. However there is a middle class with increasing wealth that often doesn’t see the value in luxury brands and these consumers are the ones pushing the growth of such retailers as H&M, Zara and car companies such as Buick, VW and Ford. The middle class realise that they can’t afford the BMW’s and Louis Vuitton bags but they can purchase well known good quality foreign brands. I see more and more American & European brands entering the market to fill the gap between the local stores and the High end shopping malls with smaller shopping centers with middle range tenants & product that are fashionable but not overly expensive.

Contact Damian via email damian@damianholmes.com or phone +86 15000919590

Last week I went to Shenzhen to meet with some potential clients for some urban design and landscape architecture projects. All went well and should hear some news soon. I saw some parts of Shenzhen on my trips to and from the airport and whilst sitting in my hotel room looking over Shenzhen. I lived in Shenzhen for 18 months in 2006-2007 and I with this visit I saw that the city had changed, not greatly(well probably more than most cities in the world) but it still had changed with new elevated train lines and shell like train stations sitting above the road. I also saw large amounts of road works with new flyovers.

So what did I learn about the city and China from the trip?
I actually had a realisation when looking out over Shenzhen that was reinforced by a recent comments by government officials and that realisation is that China is still modernising and still has a long way to go and it’s current level of modernisation cannot be measured by large cities such as Shanghai, Beijing and Shenzhen. Although Shenzhen is a young(barely 30 years old) and modern city, it is still modernising and improving especially in the areas of transport, culture, and infrastructure.

During my 5 years of living in China I have had the opportunity to live in Shanghai most of my stay. Shanghai is a city that has remade itself and some of this remaking/modernising was for 2010 Expo and other pieces are part of the city’s 2020 plan. Living in Shanghai can often make you become lost in the new modernised city and forget that the rest of China is still modernising or beginning to plan to modernise. Large areas of China are modernising at a great pace with high-speed rail and new highways linking cities but it is not just these elements that make a modern nation. People’s lives and cities they live in are still in need of modernisation whether this is new roads, housing, parks, greenways or bicycle infrastructure. The other realisation is that there are still many millions of people who will move from rural areas to new cities that have not even been planned yet. For those who live in China, this may seem as obvious, however I think as an urban designer and landscape architect, I have to keep a good macro perspective that large areas of China are still in need of good planning and modernisation. How to best service these areas is through current practices but also education of the new graduates entering the profession from small technical colleges to large research based universities.

Modernising of China is not just designing for existing cities but also developing new design theories and tools for future cities.

View of Bujizhen, Shenzhen from my hotel

View of Shops selling pottery & ceramics

View of Bujizhen, Shenzhen from my hotel

New York Times recently published When Parks Must Rely on Private Money by DIANE CARDWELL concerning the struggles of cities to fund the construction and maintenance of parks throughout the USA. Many parks are funded through selling of land or revenues generated by carparks or taxes from new nearby developments and others are funded by residents and companies donating funds in return for naming rights or plaques. Cardwell cites examples of parks that have been constructed with the use some private funding including Millennium Park in Chicago and the Highline and with the tradeoff causing issues in some cities.

The article stimulated a few ideas I have had during my career. I find that funding of new or redevelopment of parks is a often a fine line between private and public funding, which often blurs the line between public and private space. Private funding often causing issues with residents because of naming or commercial activities in the new park that create a private area.

An ever-growing trend for cities around the world is to justify the cost of construction and maintenance of parks through inclusion of private funding or commercial activities such as paid parking garages, retail shops, restaurants, or areas that are commercialised for entertainment(concerts, festivals, etc). How to strike a balance between private and public funding is very complicated process for each city and requires research and consultation.

Many cities find it hard to redevelop parks with the use of public money as it is often controversial as parks are sometimes seen by residents as non-essential. Residents see hospitals, schools, and police as essential services within the community whereas parks are seen as non-essential and that public monies would be better spent on other services. To avoid this cities seek private funding in return for naming rights or a commercial development on or near the  park. Now the question is how far to go with private funding and how much is the park compromised by accepting the funding in return for naming right or commercial development?

This issue of public and private funding will become more and more prevalent around the world as developers of retail and residential developments blur the line between public and private space by creating spaces in developments that are town squares and parks that can be accessed by the public. This blurring will cause some confusion with city residents as to what is public space and what is private. It also raises the question – Are developers going to develop parks and maintain them or will it always remain the domain of the local government?

Private development of public parks as apart of residential developments or commercial developments, which are then handed to government after certain period is already occurring in some parts of the world. Will this become a growing trend across cities for small and large parks? Or will it remain only in residential developments?

CROSS POSTED AT WORLDLANDSCAPEARCHITECT.COM