Property / Construction

Exponential growth for China's property sector

by Ella Lee

Jason Hui, executive director, Shimao Group

Mainland China has available land and a population with money to invest two reasons why Hong Kong property developers are looking ahead with confidence

The real estate market in China is expected to experience continuous and robust growth in the next five to ten years. This will be driven by rapid development in major cities and key coastal and inland provinces and by the availability of funds to invest. Analysts note that, as the economy expands, average income levels will improve and, with the government introducing a number of tax relief policies, the property sector is confidently predicted as one that will see nothing but gains.

Taking Beijing residents as an example, average annual income increased more than five times from RMB2,040 in 1991 to RMB12,464 in 2002. Since the government's objective has been to achieve substantial economic and social development between 2001 and 2005, this trend has continued. So far, during this period, the annualised rate of GDP growth has been around nine percent and this is being reflected in salary increases and greater personal wealth.

Policies favourable to the property market have also been introduced. Individuals from other provinces need no longer apply for "approval for purchasing property as a non-resident" and the three percent administration fee has been waived for the purchase of brand new commercial buildings or second-hand residential properties in Beijing.

Although the growth rate in percentage terms may slow in major cities, the real estate market will, nevertheless, remain strong. "Value growth of five to ten percent and volume growth of 20 percent are anticipated for the Shanghai property market in 2004," says Jason Hui, executive director of Shimao Group, a major developer of high-end properties in Hong Kong and China. "This expansion is driven by the increase in both commercial and residential demand. Besides high-end properties, there are also many opportunities for office buildings, shopping malls and hotels," he adds.

Competitive market

To prevent the economy from overheating, the Chinese government is taking measures to regulate macro economic growth. As a result, Mr Hui expects market consolidation to occur which will be positive in the long run. "Only capable players with a strong financial background, good management and excellent human resources will be able to keep ahead in a competitive market," he notes.

Mr Hui points out there are numerous ways in which Hong Kong people can play a role in the property market in China. "For the real estate industry, in particular, there is demand for architects with expertise in landscaping and town planning, interior designers, engineers, sales and marketing people and HR professionals as support," he explains.

Expatriates from Hong Kong usually head up the senior management of the Shimao Group's mainland offices. They are required to have ten years' experience in their own fields including three to five years' solid experience in China. In addition, they must have good communication, management and team-building skills in order to provide operational leadership.

For other positions, Shimao is actively recruiting local staff. They have joint programmes with the top mainland universities to hire students to work as interns and graduates as management trainees. Localisation of middle management posts is also taking place and resources are being put into internal training and the long-term development of future leaders.

Different strengths

When comparing the abilities of mainland and Hong Kong employees, Mr Hui sees clear differences. He thinks the former have better technical skills but inadequate management experience while the latter excel in terms of innovative thinking and their approach to work. "Hong Kong expatriates are also more committed to upholding the company's values and policies," he says. "They look further ahead and work in a way that is organised, better planned and more systematic."

The continuing localisation of mainland operations will not affect the role of Hong Kong expatriates in the near future. "The industry will keep growing, resulting in consistent demand for experienced local and overseas professionals," Mr Hui says.

The key challenge for those from Hong Kong is to adapt to the work environment in China. "You have to bear in mind the need to apply for certain government approvals and to communicate closely with mainland colleagues and subordinates," says Mr Hui. "In Hong Kong, staff are more independent, proactive and disciplined in their work once you give them clear instructions. In China, local employees expect more frequent discussions and closer supervision."

For the day-to-day management of mainland staff, it is important to build trust and a friendly working relationship. "Prove your ability and let them know you are there to help and share knowledge not just to monitor and control," says Mr Hui. "Mainland employees cooperate best when they trust you."

Since China is now the focal point for new development, there are abundant opportunities for career advancement. From a property developer's point of view, Mr Hui thinks that, in general, mainland projects can make full use of one's professional knowledge and provide greater job satisfaction. "Because of space available, mainland construction projects can incorporate greater variety and that creates an ongoing professional challenge," he concludes.

Taken from Career Times 28 May 2004
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