Strong Investment Recorded in Shanghai

Part of ensuring any residential or commercial investment venture is successful is purchasing in an area with a good level of demand. The Shanghai Commission of Commerce released encouraging results earlier this month (January 1), that outlined a strong level of investment in the Shanghai region.

This spells positive news for current or future owners of both commercial and residential real estate in Shanghai, as it could lead to more businesses and residents shifting to the region.

According to the January 1 release, there was a record level of foreign investment recorded in Shanghai over 2013. As a result, growth in foreign investment has been rising much higher than the national average.

Across the city of Shanghai, the Commission recorded a year-on-year rise of 10.5 per cent in foreign direct investment. This translates into US$16.7 billion and is the 14th year of growth, according to the Commission.

"Shanghai has actively adjusted itself to the new conditions amid globalisation, with continuous efforts on the improvement of investment climate and optimisation of investment structure," said the commission.

"The city managed a stable foreign investment growth in 2013, attracting investment with better quality and higher value."

Further growth in investment during 2014?

In 2013, the government announced the Shanghai Free Trade Zone, which will cover 28 square kilometres over four areas in the city.

This new zone could open up a number of opportunities for further foreign investment over the next few years, leading to lucrative ventures for investors of residential and commercial real estate in and around the designated areas.

In a January 6 statement, the Chinese State Council announced it will temporarily change the measures in place that govern the Shanghai Free Trade Zone in order to open up the services sector to overseas investors.

The State Council outlined some of the changes would include relaxing the controls over foreign investment in international shipping, entertainment, training, telecommunications and credit investigation in the zone.

Furthermore, some analysts have predicted the zone will turn into a major financial hub, after new financial businesses establish themselves in the area.

In an October 28 2013 Forbes article, Colliers International Shanghai Associate Director Peter Garrison stated he expects the zone will encompass "more foreign financial services companies" and the "Chinese banks will become ever bigger".

"I would image that a banking cluster (will form) like you now have in Lujiazui – something similar though obviously on a smaller scale," Mr Garrison told Forbes.

For more information about investing in commercial or residential real estate in Shanghai, get in touch with Ray White Group at www.raywhite.com.