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China Housing and Land Development, Inc. Message Board

  • soon2bnada soon2bnada Nov 4, 2012 9:32 PM Flag

    Shangxi economy and housing market

    Excerts from the Economist Intelligence Unit reseach report on Shaanxi province.The province and Xian in particularhave strong economic growth prospects and th housing sector will remain strong due to goverment priorities. CHLN operates in a sweet spot.

    Responding to a national drive for affordable housing, Shaanxi started construction work on 512,300 units in 2011, more than any other province. The province is expecting to complete 300,000 units in 2012, and Xian, the provincial capital, aims to have affordable housing account for 20% of its total housing stock by 2015. In 2011 383,000 people were relocated to 102,000 new residences. Shaanxi.s property sector performed relatively well in a weak national market, with an 18.5% increase in floor space sold and property investment up by 22.5%. A number of major construction projects in Xian will keep the market strong.

    In July 2011 the government launched construction of the Xixian New Area, located between the cities of Xianyang and Xian, as part of a wider drive to build up the greater Xian area. The government wants the area to achieve a GDP of Rmb150bn (US$23.8) by 2020.

    Urban disposable income per head and rural net income per head amounted respectively to Rmb18,245 (US$2,893), up by 16.2%, and Rmb5,028, up by 22.5%, in 2011. The rural-urban income gap is significant, but shrinking: the ratio of urban to rural incomes declined from 4.1:1 to 3.6:1 between 2007 and 2011.

    Urban incomes in Xian are 42% higher than the provincial average, and are increasing at a faster rate.
    The Shaanxi government is targeting a 57% urbanisation rate by 2015, up from 47.3% in 2011. The main areas of focus are in the provincial south, around the cities of Xian, Baoji, Weinan, Yulin and Hanzhong.

    The Baiyu and Qinling-Bashan mountainous regions poverty alleviation and relocation plan is described as the largest relocation project in national history. The endeavour involves moving nearly 3m people from disaster prone areas into newly built urban areas, dovetailing with another provincial target to raise the urbanisation rate to 57% by 2015. The project runs from 2011 to 2020.

    Shaanxi has above average growth rates (13.9% for 2011; 13.4% estimated for 2012) and is projected to continue that in the next 5 years. Shaanxi's economic strength stems from its industries' relatively low dependence on exports and high levels of domestic investment and consumption growth.

    Shaanxi is ranked closely behind the national capital, Beijing, in terms of overall strength in research and development (R&D).

    In November 2011 a ground breaking ceremony was held for the Xian New Software City, which will cover 7 sq km by 2020. The first phase (1.4 sq km) is likely to be in operation by 2014.

    Shaanxi is also an emerging centre for production of both Chinese and Western medicines.

    In March 2012 Xian announced the 12th five-year development plan for its financial industry. The plan calls for total social financing to double by 2015. The plan is explicitly aimed at finding finance for companies in the Guanzhong-Tianshui Economic Zone.

    Sentiment: Buy

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