GOVERNMENT

FAST FACTS:

OFFICE MARKET:
Cost per square foot:
Shanghai: HK$3,908 (US$504)

Number of sales:
Shanghai: 2

Change in number of sales from a year ago:
Shanghai: -50%

Total cost of sales:
Shanghai: HK$1.8 billion  
-  Q32010   JONES LANG LASALLE

TECH:

 Shanghai had one million Internet Protocol Television (IPTV) users, more than any other city in China, according to China Telecommunications Corp. Shanghai has 6.7 million TV households, according to Nielsen, representing 17.34 million TV viewers in a city with 18.9 million residents. At the end of 2008, Shanghai had about 745,000 IPTV users. IPTV services in that city are jointly provided by China Telecom's subsidiary, Shanghai Telecom and Shanghai Media Group's (SMG) BesTV subsidiary. Nationally, China now has just over three million people receiving TV content via IPTV, a system through which digital television service is delivered using the internet, instead of being delivered through a traditional radio frequency broadcast, a satellite signal or a cable television format. Sources: Nielsen, Interfax-China

 

Shanghai's economy posted record levels of foreign investment following China's World Trade Organization entry

 

 

 

 


Shanghai aims for global financial centre status

China's top economic planning body set new targets on Monday in its effort to turn Shanghai into a global financial centre.     The blueprint sets out a time frame to implement and goals to increase trade in particular with respect to financial instruments including derivatives.   --  2012 February 15    WALL ST. JOURNAL

Largest transaction
The Centre in Shanghai sold for to China Pacific for $670 million

In the most-expensive single-property sale in mainland China this year, a Hong Kong-based distressed seller is getting a helping hand from the rise in the Chinese currency.          

The deal also marks one of the first property purchases by a Chinese insurer since Beijing granted greater leeway last year for the country's insurance companies to invest in real estate. The move was designed to help the country's cash-rich insurers seek higher returns by investing in a wider array of asset classes.  --  2011 March 16    WALL ST. JOURNAL       

Shanghai Office Rents Expected to Rise 10-15% 
Strong demand with multinationals expanding

  -- 2011  SCMP

 
From the Vendor's website:

Location: Shanghai
Property Type: Office
Property Size: 98,300 sq m

Background
  • 40-storey office building developed in 2004 by Hutchison Whampoa
  • One of the few international class A office properties in Puxi, Shanghai
  • Located within the office cluster of central Puxi, one of Shanghai’s most premium districts
Strengths / Highlights
  • Rent increases through the financial crisis
  • Cost savings alongside service improvements
  • Maintains high occupancy rate

China insurers buy office tower, spurring the opportunistic institutional  bargain hunters who are waiting to step in.   Shanghai is one of the playgrounds in China.   There are many more.

How about a stunning house in the French Quarters?

We love the elegance as well as the privacy of this gorgeous townhouse.   La Cite was developed by Singapore's largest developer - Capitaland.   

Capitaland teamed with Sun Hung Kai Properties of Hong Kong for Ion which is Singapore's most spectacular and prime retail development on Orchard Road.   Both these developers have a reputation for exceptional quality and they carry that standard with them in their developments in the region + purchasers follow their branding.   As with fashion, developers also have valuable brands that translate globally.  Both developers are associated with premium luxury real estate.  

Partnerships amongst the regions largest developers is taking place in a way previously unheard of.   China real estate and development requires a specialized team with local skill set on a world-class basis.   This is what investors are counting on and how the developers can distinguish amongst themselves.   Shanghai is one of China's showcases and there is a variety of modern housing.

REGULATION:

Every family in Shanghai will temporarily be permitted to buy only one more home, regardless of whether it is a second-hand unit or newly built apartment.  

Shanghai authorities also said it would limit the amount of mortgages banks can issue on residences and prepare to introduce a trial launch of a real estate tax.

In line with the national policy, the Shanghai government said it had ordered banks to suspend loans for third-home buyers and would further regulate developers' business operations and strengthen the management of market transactions

  - 2010 October   REUTERS

ESSENTIALS:
Population: 13.52 million
GDP (2004): $89.76 billion
TV households (2004 est): 3,449,000
Adspend (2004): $2.39 billion*
Adspend (2003): $1.67 billion*
Year-on-year increase: 42.5%*
Adspend as a percentage of GDP (2004): 2.7%
Avg. min. viewed per day per viewer of all channels (aged 4+): 166.8
Basic cable subscription cost (per month): $1.57
*based on published rate card

Hong Kong was once the marketing capital of Greater China, but the territory has become Chicago to Shanghai's New York.

Many marketers have relocated their headquarters for the region to mainland China, knowing they have to be on the ground to have any chance of getting that vast market right. With more than 1 billion consumers, they can't afford to get it wrong.

While many government-related businesses in the technology and telecom sector headed to Beijing, China's capital, many consumer goods marketers like Unilever, McDonald's Corp., Coca-Cola Co., Siemens, Heineken and General Motors Corp. opted for Shanghai.

Given the city's jet-set "Paris of the East" image in the 1920s and 1930s, its rapid transformation into a marketing hub is no surprise. The city is home to some of the most Westernized, brand-friendly, trendy consumers in China.

Shanghai has also become China's Madison Avenue, with significant offices for just about every major multinational agency network, including WPP Group's JWT and Publicis Groupe's Leo Burnett. It is also the first stop for smaller shops that want an office in China, such as Omnicom Group's TBWA Worldwide, M&C Saatchi, Wieden+Kennedy and Havas-owned Arnold Worldwide.

"The center of creativity has shifted from Hong Kong to Shanghai," said Tom Doctoroff, JWT's area director, Northeast Asia & CEO, China, who relocated to Shanghai from Hong Kong seven years ago. "I don't know whether this is a result of increasing skills among local advertising execs or a massive talent shift [moving from Hong Kong] north of the border. I suspect it's a 50-50 combination."

A walk down this colorful, cosmopolitan city's major arteries supplies ample reasons why foreigners, whether from London or Hong Kong, choose to live in this lively city.

The riverside strip called the Bund is home to some of the best restaurants and nightclubs in the world, such as Jean-Georges, M on the Bund, Laris and Bar Rouge, as well as a multi-level Armani flagship store. Business and shopping districts like Nanjing Rd. West and Xintiandi also are packed with tempting restaurants and luxury retail shops, like the three-story "Sony Gallery" that opened last year in Huaihai Road, the first such Sony lifestyle outlet in Asia outside Japan.  

  The Bund - overview

Shanghai's Peace Hotel opens after restoration

The city's Peace Hotel, which once accommodated Charlie Chaplin and other celebrities, opened to guests yesterday after three years of restoration, the managers said in a statement.

Fairmont Peace Hotel will be managed by Chinese hotelier Shanghai Jin Jiang International Hotels (Group) Co and Fairmont Hotels & Resorts Inc, which runs the Savoy hotel in London.

Jin Jiang, which operates more than 600 hotels in China, spent HK$500 million (S$88 million) to restore the building.

Some of the main features of the hotel have been kept, including the lobby with an Octagon ceiling, the hoteliers said.

Rates start from 2,300 yuan (S$464) and go as high as more than 7,000 yuan for a night, the hotel's general manager, Kamal Naamani said at a press conference.

The hotel has 270 rooms including the so-called Nine Nations Suites.

The building, located on the Bund promenade overlooking the Huangpu River, has six restaurants and lounges, including the Jazz Bar patronised by former US Presidents Jimmy Carter and Ronald Reagan.

The Indian, English, Chinese and American suites have been preserved, while the French, Italian, Spanish, Japanese and German rooms were redesigned.

The hotel was previously called the Cathay Hotel and was built by British businessman Victor Sassoon, opening in 1929. The art deco property reopened as the Peace Hotel in 1956.

Jin Jiang also has an agreement with Swatch Group AG to develop the south wing of the old Peace Hotel, called Swatch Art Peace Hotel, part of which will serve as an arts centre. --   2010 July 29 Bloomberg

Iconic Peace Hotel to get US$50m facelift
Owners aim to return ageing Shanghai landmark to ranks of world's best

Even a grande dame needs a facelift when a younger rival moves in down the street.

Peace Hotel: First opened in 1929 as the Cathay Hotel, it faces competition from a slew of glitzy outfits including a US$360m Peninsula Hotel being built nearby

The venerable Peace Hotel, an icon of glamorous 1930s Shanghai, is preparing for a US$50 million renovation that its owners hope will put it back in the ranks of the world's best.

Jinjiang International Group thinks the project is needed to help the hotel compete with a slew of glitzy establishments in the booming city, including a US$360 million Peninsula Hotel being built by Hongkong and Shanghai Hotels Ltd nearby on the northern tip of the Bund waterfront.

'If we don't upgrade, it just won't do. You can't compete on culture alone,' public relations manager Ma Yongzhang said on Friday. He began work as a room attendant at the hotel as the chaos of China's Cultural Revolution erupted 40 years ago.

Opened by businessman Victor Sassoon in 1929 as the Cathay Hotel, the hotel welcomed Charlie Chaplin and Noel Coward to the city known as the Pearl of the Orient. It was renamed the Peace Hotel in 1956, after the Communists took power.

It hosted Chinese warlords, entertained Shanghai gangsters and survived Red Guard attacks before Shanghai conglomerate Jinjiang refurbished it 10 years ago.

The Italian marble in the art deco lobby gleams once again, but the elevators are clunky and the rooms do not always meet international five-star standards, guests say. Its occupancy rate was a respectable 78 per cent in 2005, but it has slipped this year.

The exact timing and full cost of the hotel's renovation have not been finalised yet, Mr Ma said. But the vision is clear - to recreate a luxury hotel for guests who romanticise the pre-war Shanghai era.

Mr Ma recalled how he and other staff protected the hotel when it was targeted during the Cultural Revolution as a symbol of capitalism.

'The Red Guards came and wanted to smash the dragon and phoenix ceilings of the restaurant, but we told them that would leave the staff and guests with nowhere to eat.

'So we said we'd smash it ourselves, and instead we covered the whole ceiling with papers, and protected it.' - SINGAPORE BUSINESS TIMES   2006  July 3 

Owners plan a makeover for Shanghai's Peace Hotel

The Peace Hotel, an aging colonial icon on Shanghai's scenic waterfront, will be renovated under a deal signed with Fairmont Hotels and the Swiss watchmaker Swatch.

Jinjiang International Hotel Management, China's biggest hotel operator and current owner of the Peace Hotel, announced plans to join with the two foreign companies in a notice posted on the Web site of the Hong Kong Stock Exchange on Wednesday.

Plans call for the owners to keep the hotel's historic design and art-deco highlights.

Jinjiang and Fairmont Hotels & Resorts, a Saudi-controlled luxury hotel group based in Toronto, are setting up a joint venture to renovate and manage the best-known northern wing of the hotel, located at the corner of Shanghai's Nanjing Road shopping street and the waterfront Bund, the notice said.

The 78-year-old hotel closed this month, with construction work expected to last about two years, it said.

The southern wing of the Peace Hotel will be renovated and managed by a joint venture between Jinjiang and a unit of the Swatch Group of Switzerland, Jinjiang said.

That wing, to be known as the Shanghai Swatch Art Center, will be transformed into an art center and also house flagship stores for international-brand watches, it said.

Jinjiang, the largest tourism conglomerate in China's biggest city, owns some of Shanghai's choicest historic hotels. But the state-run company has been struggling to acquire the international managerial expertise it needs to compete with the dozens of top-flight global hotel operators setting up operations in China.

It faces competition along the Bund from some of the biggest names in retailing - many other colonial buildings have already been revamped into fashionable boutiques, restaurants and galleries.

But the company's decision to join with foreign companies in upgrading the Peace Hotel has raised some eyebrows.

"South Wing: Artists Only Welcome," said a headline in the local newspaper Oriental Morning Post.

The Peace Hotel opened in 1929 as the Cathay, built and owned by the Iraqi Jewish tycoon Victor Sassoon, who resided in a pyramid-shaped rooftop penthouse that has inspired the look of scores of modern Chinese skyscrapers.

The 12-story main building was the place to stay in the Shanghai of the 1930s and '40s, attracting famous guests like Charlie Chaplin, General George Marshall of the United States, and the playwright Noel Coward, who completed his famous work, "Private Lives," while staying at the Cathay.

Following the Communist takeover in 1949, the hotel nationalized and renamed to drop perceived colonialist overtones. -    ASSOCIATED PRESS   17 April 2007

Shanghai's legendary Astor Hotel

Situated in an inconspicuous corner near the Bund, the Pujiang Hotel, formerly the Astor House Hotel, seems to have lost its bygone glory.

The low-rise building has been eroded to be dated in colour, which was submerged among the eminent architecture of the Bund.

Few members of the city's younger generation are even aware that the hotel exists, let alone that it is considered the father of the city's luxury hotels.

The hotel was opened in 1846. In 1861 the two-story hotel was sold to Henry Smith who renamed it the Astor House Hotel. The building we see today was completed in 1910. In 1959, the hotel name was changed to Pujiang Hotel.

It was once the most renowned and luxurious foreign-owned hotel in the Far East.

The Victorian-style design was the work of an Englishman, which can be detected from the grand columns standing in the halls and arched gates.

The hotel has witnessed many breakthrough events in Chinese history. The first lamp bulb in the country was lit here, the first telephone in the country was switched on here, and the first sound film from the West was projected here.

Plus, China's first ball was held in the hotel, helping to bring to a close the tradition that women should not attend social activities.

It is said that Chiang Kai-shek had his last dinner here before withdrawing to the island of Taiwan.

A bellboy picked up a wallet belonging to a Russian at the main entrance to the hotel, and used one third of it to buy a car, serving as the first taxi in the country. He was the founder of Johnson, now Qiang Sheng Taxis.

Today, when you walk on the creaking wooden floor and see the simple furniture, you cannot imagine the brilliant days of the hotel. It is only a two-star hotel now.

Some of the 116 guestrooms, in which international celebrities such as Charlie Chaplin and Albert Einstein once stayed, are taken as historic spots with photos hanging on the wall to show guests.

The suites have been redecorated in their original style (except for modern electric appliances), and some of the furniture has been modeled with guidance from old photos.

The hotel still keeps its hulking and slow manual-operating elevators, which work from 7:00am to 11:00pm.

Close to an international wharf, the hotel changed some guestrooms for young travelers, known as the youth hostel. Here there are several beds in one room.

It's the first of its kind in Shanghai, and has been applauded by young student tourists.      --By Lu Chang, Shanghai Star  ; South China Morning Post       

Dancing the dreary decades away
Shanghai's prerevolutionary ballroom is again the venue for light-footed old-timers . . .

SHANGHAI-- Rose Tang is the last of the Old Shanghai aristocrats. At the age of 81, wearing an elegant ensemble and gold heels, she waltzes and foxtrots across the dance floor of the sole surviving ballroom from the glory days of the 1930s.

Her partner is a suave 24-year-old hired dancer, dressed entirely in black, his hair slicked back in Rudolph Valentino style. At a price of about $75 a session, he is a modern version of the sophisticated "taxi dancers" of Shanghai's hedonistic prerevolutionary years.

This is the Paramount, the famed Art Deco dance hall that became the biggest and most notorious ballroom in Asia in the tumultuous era before Shanghai fell to the Communists. And its most famous denizen is Ms. Tang, known as Auntie Rose, who represents one of Shanghai's last connections to its glamorous past.

"Some people describe me as the last generation of the Chinese aristocracy," she smiles. "To me, this is just obvious. I don't mind when people call me an aristocrat. It's just a simple fact."

Ms. Tang is intimately connected to the high-society families that dominated Shanghai in those glittering days. Her sister dated the finance minister T. V. Soong, brother of the celebrated Soong sisters -- two of whom married the nationalist leaders Sun Yat-sen and Chiang Kai-shek. Her brother was Mr. Soong's personal secretary. She proudly shows a black-and-white photo of her late husband, wearing a fedora and pinstripes, who belonged to one of China's wealthiest families.

Ms. Tang was a 16-year-old schoolgirl in 1941, when a boyfriend invited her to the Paramount to dance to the famous jazz band. It was the first time she wore the stylish clothing of the era: high heels and a qipao, a tight-fitting, slinky, silk Chinese dress.

"Back then, the Paramount was the biggest ballroom in the Far East, and all the high-society members would go there," she recalls, her eyes sparkling.

"It was the place for all the rich men. They would bring dancing girls and prostitutes, so the women would have to bring their husbands or boyfriends if they didn't want to be regarded as prostitutes. I was from a good family, so I never talked to those dancing girls."

The Paramount, according to a popular guidebook of the time, was a favourite haunt of Chinese playboys who "play tennis and speak English with each other and go to Paris once in a while and take their favourite wives out." Hollywood celebrities such as Charlie Chaplin were among those who visited.

But it was also an era of crime and assassination. One of the most beautiful and famous Paramount dancing girls was killed by a gunman at the dance hall in 1941, either because she refused to dance with a Japanese man or because she was suspected of espionage, depending on which story you believe. The murder just added to the mystique of the dance hall.

Ms. Tang's family did not escape the turmoil. When assassins tried to kill Mr. Soong at a train station, they killed her brother by mistake. She tells the story of how her brother was targeted because he was wearing the same kind of robe as the finance minister, who hid behind a train to escape the assassins.

Ms. Tang survived the Japanese occupation and the Communist revolution, but after 1949, the Paramount was converted into a cinema, showing a glum program of Maoist propaganda films.

Then, during the Cultural Revolution from 1966 to 1976, the Paramount was closed entirely, and the Red Guards denounced Auntie Rose as a class enemy.

She was forced to toil as a worker in a zipper factory, carrying heavy buckets of metal. She points to her arms, still scarred by the blisters she suffered from the vats of boiling water in the factory. Fearing punishment, she burned everything from the past, including the love letters from Mr. Soong to her sister and the bloodstained robe that her brother wore when he was murdered.

"My only goal was to make sure that my children survived," she says. "I kept telling myself, 'This can't go on forever. One day it will end.' " The Paramount, meanwhile, languished in obscurity and fell into disrepair. One rainy day in 1990, part of its façade collapsed and killed a passerby.

But in 2001, Taiwanese investors spent $3-million to refurbish it and reopen it as a ballroom in the old glamorous style, with red-and-gold décor. "I must come, I must have a look," Auntie Rose said to herself as soon as she heard the news.

Today she goes to the Paramount at least once a week. Like the ballroom itself, she is a relic of a more glamorous era. "I come here to remember those old days," she says. "It brings back such memories. I never thought that I would be at the Paramount again, wearing elegant clothes again."

Although she lost all of her family money in the Communist era, she now receives financial support from her children who live in the United States and Japan.

She happily poses for a photographer as she dances the rumba and the waltz. "Please be careful with your photos because some people here are not dancing with their spouses," she tells the photographer.

But there aren't enough rumba dancers to ensure the Paramount's survival. Just this month, it was announced that the Paramount is losing so much money that its Taiwanese owners have decided to convert the second and third floors into a disco. Only the fourth-floor ballroom will remain in the old style, and preservationists are worried that it could be damaged by the pounding noise of the disco.

In true aristocratic style, Auntie Rose sniffs at the nouveaux riches who sometimes hire her dancing partner. "They're loud and noisy," she says as she sips tea at the Paramount. "Often their parents were peasants. I don't have any dealings with them. They don't have the class that we had. In the old days, if you had class, you spoke quietly and softly."

Then, clutching her gold high-heels, she slips into a taxi and disappears into the Shanghai night.   - by Geoffrey York   THE GLOBE & MAIL  22 December 2006 

Shanghai - fusing modernity and exotic old world charm

Shanghai is a fascinating city. It fascinated me on my first visit 25 years ago when only the 'old Shanghai' existed. And it fascinated me no less when I returned recently to find a city that has somehow managed to fuse brash modernity with a graceful and exotic air of history. Indeed, Shanghai retains some of what Hong Kong, Singapore and Tokyo have lost.

The contrast between the Shanghai of today and the city I visited a quarter of a century ago could not have been greater as I gazed on New Year's Eve from the Bank of China Tower in Pudong across the Whampoa or Huangpu River towards that historically famous boulevard, the Bund.

From my 51st floor eyrie, I looked across to and down upon the now seemingly miniature buildings that were once Shanghai's 'high rises'. They still look as elegant as ever. The famous Peace Hotel or 'He Ping fan dian' is as grand and imposing as the day it opened in 1929 as a single hotel combining the old Cathay and Palace hotels.

The one-time Hong Kong and Shanghai Bank headquarters and other venerable edifices are still standing, too, as well maintained remnants of the old Shanghai International Settlement. The Bund retains what Britain's Prince Charles would call a 'human dimension' that Pudong with its gleaming, cloud-piercing tower blocks can never aspire to. Many other Asian cities have allowed this human dimension to disappear by ruthlessly demolishing historic old buildings or refurbishing them almost beyond recognition, and dwarfing them with high rises that range from the anonymous to the garish.

An even more frozen-in-time experience for me was to enter the Yongfoo Elite Club in Shanghai's old diplomatic quarter, an establishment housed in a villa that served at different times as a British, Russian and then Vietnamese consulate building. Replete with old mahogany furniture, art deco items and a wealth of paintings and antiques from China and Europe, the building is a tribute to Shanghai's sensitive preservation of its colourful past.

But Shanghai is not just about antiquity. The city no longer needs to dream of its former glory, having overtaken Hong Kong and other 'Chinese' cities in Asia as a centre of commerce, tourism and design. True, Shanghai has not yet matched its rivals as an international financial centre, but in the current global financial crisis that could prove to be an advantage.

Knowing that land is still collectively owned, or at least owned by public authorities in the name of the people in China, visitors are inclined to wonder how Shanghai could have afforded to finance the veritable forest of new office blocks - some of them destined to rise more than 100 storeys - and apartment buildings that now characterise much of its skyline.

The answer is that the Shanghai local government leases land to developers who bear construction costs, while the city uses the revenue to finance a generally modern and ambitious infrastructure. Since these leases typically have to be renewed every 50 to 70 years, the system appears to provide cities like Shanghai with a useful source of renewable revenue, rather to the chagrin of China's central government which does not own land.

Restoring greatness

If the visitor is awed by the sheer size of Shanghai - the largest city in China and one of the biggest metropolitan areas in the world, with a population of 20 million - this is nothing, apparently, to what it could become. Under a plan now being implemented, at least 16 cities in three provinces adjacent to Shanghai will be linked by high-speed rail and motorway networks and cross-sea bridges to form a vast megalopolis. Everyone in this area will be able to travel within three hours to every part of the conurbation of the Yangtse River Delta.

A Chinese official described the scheme to me, in a casual rather than boastful way, as a plan of of 'mind-boggling dimensions'. It is certainly characteristic of Shanghai's restored sense of former greatness, as the city has re-emerged to eclipse the usurper Hong Kong. Even Beijing faces the prospect of becoming secondary to Shanghai if the Chinese administrative capital has to be relocated because of water shortages. Not that Shanghai does not have its own problems - pollution and traffic congestion being two of the biggest.

Pollution caused by smog from nearby industrial centres is an ever-present phenomenon from which there was only temporary relief when Beijing hosted the Olympic Games last year. Indeed, when I spoke of 'gazing' across the Whampoa River, I should have said 'peering' through a haze that rarely lifts. I recall similar smogs in Britain 50 years ago, and Japan had them until the 1960s. They are part of a heavy price to be paid for industrial development, and one can only hope that the Chinese government uses part of its planned 596 billion yuan (S$129 billion) fiscal stimulus package cleaning up the environment.

Shanghai can be faulted, too, for not having subway and other public transport systems that come anywhere near those in Tokyo, Hong Kong or Singapore. As a result, an endless procession of cars and trucks spills from expressways on to city roads that become absurdly clogged. If this is a symbol of Shanghai's prosperity, it is one that is sadly out of keeping with its otherwise civilised traditions.    - 2009 January 7   BUSINESS TIMES

 
CITY THAT NEVER SLEEPS: Shanghai's skyline glitters from the top of a Pudong skyscraper

INSTITUTIONAL INVESTORS:

Morgan Stanley sells Shanghai investment project

US investment bank Morgan Stanley has sold its serviced apartment project in Pudong, Shanghai, for about 1.2 billion yuan (~ $1.38 billion HKD) making it the second-largest residential deal by value in the city so far this year. 

Morgan Stanley Real Estate Fund has sold the 284-unit Pinnacle Century Park adjacent to the Lujiazui financial district to JP Morgan Greater China Property Fund, according to people familiar with the deal.

One person involved in the deal said it was time for Morgan Stanley Real Estate Fund to take profit and redistribute the earnings to investors.

The deal, in which property consultant DTZ acts as the agent, would be the second-largest residential sale by value in Shanghai after Goldman Sachs sold its Shanghai Garden Plaza for 2.24 billion yuan, or 23,039 yuan per square metre, to Shanghai Forte Land early this year, Savills said. Shanghai Garden Plaza has a gross floor area of 97,227 sq metres.

Mirae Asset Financial Group 's sale of serviced apartment Shama Luxe Xintiandi to Shui On Construction and Materials for 929 million yuan, or 58,824 yuan per square metre, ranked third. Mirae Asset is the largest equity fund manager in South Korea.

"Lots of international funds are still looking for acquisition opportunities, but they are not as active as two years ago," said Albert Lau, executive director at Savills China. He said the global financial crisis and the deepening debt problems in Europe had given investors more challenges in raising funds.

Douglas Sung, head of portfolio management at JP Morgan Greater China Property Fund, did not deny the acquisition. "I'm busy and let's talk later," he told the South China Morning Post.

In 2008, JP Morgan Asset Management raised US$600 million for the Greater China property fund. The closed-end fund received capital commitments from institutional and high-net-worth investors from the United States, Asia, Europe and the Middle East.

The fund will be invested across all real estate sectors in the mainland, Hong Kong, Macau and Taiwan. Its primary focus is developing new properties and investments will be made in the office, residential, retail and hospitality sectors by creating project-level joint-venture arrangements with multiple operating partners in Greater China.

It seeks to capitalise on the mainland's rapid economic growth, urbanisation, rising income levels and strong demand for real estate.   - July 19, 2010 SCMP

PROPERTY MARKET

Shanghai may impose property tax

Shhanghai may impose its own residential property tax to cool price increases in China's richest city, Shanghai Securities News reported yesterday, citing unidentified people close to the government.

Crowd puller: Real estate prices rose by a record 12.8 per cent in April from a year earlier, the National Bureau of Statistics said on Tuesday

The steps may be introduced as early as this month, the newspaper said. The Shanghai Municipal Housing Support and Building Administration Bureau didn't respond to questions from Bloomberg when contacted by telephone.

Property prices in Shanghai may fall as much as 40 per cent if the new tax is imposed, and declines in other cities would follow, according to Wu Jianxiong, a Shanghai-based analyst at Central China Securities Holdings.

Shanghai would be the first city in China to impose its own property tax to combat speculation in the housing market and control price increases that have sparked inflation concerns in Beijing.

Real estate prices rose by a record 12.8 per cent in April from a year earlier, the National Bureau of Statistics said on Tuesday. That increase was the 'last glimmer of the setting sun' before government actions to curb prices take effect, Mr Wu said.

China has restricted pre-sales by developers, curbed loans for second and third-home purchases and, on Monday, raised the minimum reserve requirements at banks for the third time this year.

'It's very likely that we will see many real estate developers offer more discounts for newly built apartments in Shanghai in the near term,' said Lu Qilin, a Shanghai-based researcher at U-Win Real Estate Research Center.

Chinese banks can withstand a 30 per cent to 40 per cent decline in home prices, the 21st Century Business Herald reported on Monday on its website, citing unidentified bank officials. The nation's banks have finished stress tests on mortgage exposure, the Guangzhou-based newspaper said.

The idea of a city-wide property tax is 'entirely normal', the Shanghai municipal housing bureau said in an April 8 statement. Local governments can implement the tax with central government approval, it said.

China's surging property market is in its 'last madness' and speculators may retreat on caution by local authorities, Central bank adviser Li Daokui said on April 17.

The government is trying to reduce the effects of a stimulus plan and a US$1.4 trillion lending binge that revived economic growth and increased the risk of an asset bubble.

'China has plenty of demand right now, so this is no bubble in my definition,' Hang Lung Properties Ltd chairman Ronnie Chan said in a Bloomberg Television interview on Monday broadcast yesterday.

'A bubble to me, if you want to be more precise, is the huge rise in market prices in the absence of demand.

'I think the buying opportunities are ahead of us, not behind us,' he said. --  2010 May 13   Bloomberg

SHANGHAI HOTEL MARKET

Luxury hotels in Shanghai look risky: The city's first-quarter growth slumped to 3.1%, about half the national pace. International hoteliers have plans to add 46% more rooms in Shanghai before the end of next year, even as revenue per five-star room has halved since 2005 and occupancy has fallen to 42%, according to Jones Lang LaSalle Hotels.

In a late 1990s Shanghai real-estate swoon, government-owned companies emerged as investors of last resort, and today they are landlords to properties housing Grand Hyatt, Radisson and JW Marriott hotels.   - 2009    WALL ST JOURNAL

SHANGHAI: Office Market

Largest transaction
The Centre in Shanghai sold for to China Pacific for $670 million

In the most-expensive single-property sale in mainland China this year, a Hong Kong-based distressed seller is getting a helping hand from the rise in the Chinese currency.          

The deal also marks one of the first property purchases by a Chinese insurer since Beijing granted greater leeway last year for the country's insurance companies to invest in real estate. The move was designed to help the country's cash-rich insurers seek higher returns by investing in a wider array of asset classes.  --  2011 March 16    WALL ST. JOURNAL       

 
From the Vendor's website:

Location: Shanghai
Property Type: Office
Property Size: 98,300 sq m

Background
  • 40-storey office building developed in 2004 by Hutchison Whampoa
  • One of the few international class A office properties in Puxi, Shanghai
  • Located within the office cluster of central Puxi, one of Shanghai’s most premium districts
Strengths / Highlights
  • Rent increases through the financial crisis
  • Cost savings alongside service improvements
  • Maintains high occupancy rate

China insurers buy office tower, spurring the opportunistic institutional  bargain hunters who are waiting to step in.   Shanghai is one of the playgrounds in China.   There are many more.

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In recent years, the developers of Shanghai's top-notch office blocks faced agreeable problems: how to find the next good plot of land and how high to build on it. The demand for A-grade office space was insatiable as the target tenants -- multinationals -- were typically increasing headcount by around 10% a year, prompting a construction boom. Even in a buoyant market, that much building was going to increase vacancy rates and push down rents. The problem for the developers now is that all the new towers are opening their doors during the worst climate the Chinese economy has faced since liberalisation.

Rents in Shanghai's office market peaked during the second quarter of 2008 with 3 million square metres of A-grade office stock in the central business districts, according to Jones Lang LaSalle. Since then, nearly 50,000 sqm have come online, and there is plenty more on the way.

Vacancies, as of the end of the first quarter of 2009, are 14.2%, up 9.1% since the peak. Pudong, which contains the city's financial centre, Lujiazui, has 23.6% of its premium space empty. And rents across Shanghai are down by nearly a quarter. "Since September 2008 we have seen that demand has been falling away at an unprecedented rate," said Steven McCord, senior manager of research in Jones Lang LaSalle's Shanghai office.

For some developers, the trick is to try to postpone the completion of buildings that are under construction so that they are finished when demand has picked up. "We expect a lot of delays to emerge in the next six to 12 months," said McCord. "But still, very few buildings have officially changed their completion dates, which is strange because you can see construction visibly slowing down on a number of projects."

No signs of distress

Investors are already crawling around for bargains. "We have had a lot of investors come to us recently asking about distressed assets, and they are surprised that there aren't any," said Hingyin Lee, director of research at Colliers Shanghai.

While the situation isn't bad enough that distressed assets have appeared on the market, now could be a good time for investors looking to get exposure to Shanghai's office property space. In 2006 and 2007, landlords were keen to keep hold of their properties because they wanted to keep enjoying, what looked at the time, to be an ever-increasing rental income.

"Landlords right now are seeing a reduction in leasing demand, a decrease in rentals, a rise in vacancies and much new supply to be completed in the market down the line," said Shaun Brodie, associate director for research at property firm DTZ in Shanghai. "Put all these factors together and you will see some landlords looking to offload their assets." But he points out that the deals haven't started to flow yet, partly because there is still a gap between the price expectations of the landlords and investors.

This is perhaps a perfect opportunity to buy office space, noted Brodie. "Ten or 20 years down the line, when Shanghai has increased in importance in the Asia-Pacific region, people might look back on now as a golden age for buying commercial property, since the long-term trend is going to be upwards."

Even if demand doesn't pick up in the short term, the government could potentially help prop up the market by putting state-owned enterprises into the new buildings. But in the medium term demand will gradually pick up as foreign companies start to expand again in Shanghai. And the market will evolve, as Chinese companies will become more likely to set up shop in a top-tier building.

The central government has reaffirmed its support for Shanghai. Early last month, it set a target for the city to become an international financial hub by 2020, which reignited the old chestnut about whether Shanghai or Hong Kong will emerge supreme as China's prime destination for the financial industry. If there is an ounce of truth in the government's schedule, offices in Shanghai will remain a good bet for investors willing to ride out the current oversupply problems
.     - 2009 May    FINANCE ASIA

  Jin Mao Tower

Shanghai Builds World's Second-Biggest Tower, Unfazed by Crisis

Shanghai, already home to two of the world's five tallest skyscrapers, is building a tower that's even bigger, undeterred by the worst financial crisis since the 1930s.

Groundbreaking for the 632 meter (2,074 feet) tall Shanghai Tower will take place tomorrow, with completion of what will likely be the world's second-tallest skyscraper scheduled for 2014. The building, which will cost about 14.8 billion yuan ($2.2 billion), will stand above and across the street from the Shanghai World Financial Center and the Jin Mao Tower, both of which are currently among the world's five tallest.

``The economy is going to be soft so therefore the construction costs will be very favorable,'' Arthur Gensler, whose firm designed the Shanghai Tower, said at a briefing today in the Chinese city. ``The timing couldn't be better.''

The financial crisis that's pushed the U.S. into its first recession in six years and pulled back growth in China to the slowest in half a decade has yet to undermine the construction boom filling Shanghai's skyline with cranes. That may change soon, with property analysts including CSC Securities HK Ltd.'s Liu Bin forecasting rising vacancies and falling rents for the city's office buildings.

``From what I can see, the property market in Shanghai will be bad next year,'' said Bin, who's based in Shanghai. ``You can expect that rents and prices will fall. It wouldn't surprise me if some of these developers were forced to sell.''

Rents for prime offices in Lujiazui fell 6 percent in the third quarter from three months earlier, according to CB Richard Ellis in Shanghai.

From Big to Small

``Companies are cutting jobs because of the financial crisis,'' said Clement Luk, director of Centaline China Property Consultants Ltd. ``A lot of the finance-related businesses are planning to downgrade their offices from bigger to smaller, from more expensive properties to cheaper ones.''

China Vanke Co., the nation's biggest publicly traded real- estate developer, said property sales in October fell 35 percent from a year earlier. Sales fell 38 percent in September, 35 percent in August and 15 percent in July.

Shanghai Tower will be the second-tallest after Burj Dubai, which is under construction in the United Arab Emirates. The building will have 128 floors standing in the heart of Shanghai's Lujiazui financial center: the Shanghai World Financial Center, which opened only in August, and the Jin Mao Tower, according to a report by real-estate information company Emporis, released last month.

Building Design

Shanghai Tower has a twisting, asymmetrical shape that can reduce wind loads -- the forces on a structure. The new tower will include offices, a luxury hotel, shops and restaurants. The hotel will be on about the 100th floor and the tower will have an outdoor observation deck where it will be equipped to collect rainwater for heating and air conditioning systems.

It will also have 54 wind turbines for mainly generating night lighting for the structure. Gensler's building design beat Norman Foster's company to win the project in June this year. Lujiazui in Pudong district has been developed from farmland two decades ago, to a financial center.

Gensler, chairman and founder of the San Francisco-based company with the same name, that designed terminal 2 of Singapore Changi International Airport, and is building the Tameer Towers in Al Reem Island Abu Dhabi, said his company can't escape from the global economic crisis.

"'It's going to be a couple of tough years for us,'" the 73- year-old said. ``A lot of them are in holding mode until financing is sorted out.'' He expects company sales to drop 15 percent next year, compared with 2008.

Falling Rentals

Space in Mori Building Co Ltd.'s Shanghai World Financial Center, was leased ``faster than expected'' to almost 50 percent of capacity currently from 40 percent in August, Minoru Mori, chairman of Japan's biggest privately held developer, said last month. Demand for space may slow and rentals will come down with the opening of new office developments in Shanghai, he added.

``Lujiazui is prime location for the financial industry,'' Centaline's Luk said. ``The tower is meant to compete with the others to be the tallest and grandest. Properties like this will become a benchmark for rent. They plan this for the long term.''  - 2008 November 28    BLOOMBERG   By Stephanie Wong and John Liu

Shanghai properties draw pension funds

Overseas pension funds and insurers may become main buyers of premium office and commercial properties in Shanghai as shorter-term investors could sell due to falling yields, Jones Lang LaSalle (JLL) said last week.

Overseas pension funds and insurers may become main buyers of premium office and commercial properties in Shanghai as shorter-term investors could sell due to falling yields, Jones Lang LaSalle (JLL) said last week.

Property investors with a relatively short-term investment horizon, such as banks and private equity firms, may have achieved their return targets and consider selling, especially when investment yields are being compressed, it said.

'Some of the opportunistic and value-added investors will now be looking to sell because they have met their IRR (internal rate of return) targets,' the property consultancy said in a press release.

'Consequently, we believe that the number of core assets up for sale will rise as these funds realise their investments,' it said, adding that long-term investors such as pension funds and insurance firms would likely become the buyers.

Several long-term investors last year bought major projects, including the US$188 million acquisition of a Shanghai office property by German pension fund SEB, it said.

Greg Hyland, a JLL director, told reporters he didn't expect an immediate wave of investment from foreign insurers and pension funds in Shanghai's property market - partly because China is trying to cool its property market and some of the recently introduced measures would complicate cross-border transactions.

Rents and capital value of Shanghai office and commercial properties are expected to rise, but growth would be 'less explosive' than in 2000-2006 when rents rose 14 per cent annually, JLL said.

Opportunistic investors, who typically hold properties for three to five years, have already been hunting for property projects in second-tier Chinese cities for higher yields, it said.

Foreign investors, including Wall Street banks Goldman Sachs and Morgan Stanley, have poured billions of dollars into Shanghai properties over the past few years, partly driven by China's currency appreciation.

Strong price rises in Shanghai and other major Chinese cities such as Beijing have driven down rental yields.

Gross yields on Shanghai office property fell to below 8 per cent in 2006, although they are still higher than the around 5 per cent in Hong Kong and Singapore and 4 per cent in Tokyo, and most fixed-income products, property consultancy CBRE has said.

JLL said that Shanghai's office property market is becoming attractive to long-term investors because of the steady demand from international corporations and the growing supply of grade-A office towers.

The occupancy rate of high-end offices in Shanghai may stay at around 90 per cent over the next three years, with investment-grade office supply likely to peak in 2010 - when total space should reach 6.2 million square metres, JLL said. - 2007 September 25   REUTERS

Shanghai to curb property buying by foreign firms

China's biggest city plans to tighten controls on purchases of property by foreign companies to help cool surging real estate prices, a newspaper report said yesterday.

'We no longer encourage foreign companies to purchase en bloc properties rather thandevelop their own,' the state-run newspaper Shanghai Daily quoted Liu Jinping, head of the city's Foreign Economic Relations and Trade Commission, as saying.

'Stricter requirements are applied to the approval of such acquisition deals to prevent prices from being pushed up by speculative investors,' Mr Liu said.

The report gave no details on what further restrictions might be imposed.

The government has already imposed special taxes and other controls, including a requirement that overseas institutional investors with investments in China totalling more than US$10 million hold at least half the investment as registered capital in a China-incorporated company, the report said.

Real estate purchases accounted for 4.4 billion yuan (S$884 million), or nearly half, of all acquisition deals between local and overseas companies in 2006, up 44 per cent over the previous year, according to the report.

Among major deals was the purchase of a downtown office building by investment bank Morgan Stanley for 1.96 billion yuan.  - AP   2007 August 23

Shanghai Rising

Benjamin Wood swings his bulky frame over the saddle, straps on his helmet, and settles onto a vintage motorcycle with sidecar. The American architect kicks the engine into life with a single thrust and pulls into the rush-hour traffic coursing through Shanghai's trendy Xintiandi district. He soon steers down a narrow street and enters another world. While Xintiandi is all luxury shops and outdoor cafés, in surrounding neighborhoods the sidewalks are full of people playing mah-jongg in their pajamas, washing dishes at outdoor taps, or popping dumplings into bubbling oil. Life goes on much as it has for the past half-century.

As the bike gathers speed, Wood's white silk jacket flaps in the wind. Passing between some of the fast-disappearing courtyard houses of Shanghai, he waves at locals making dinner. "They know me pretty well in this neighborhood, because I like to ride through here a lot," he says, raising his voice to be heard over the growling motor. "What they don't know," he adds with a hint of regret, "is that I'm also the guy who is going to make this way of life disappear."

Although few might recognize Wood, virtually anyone who has spent more than a day or two in Shanghai will know Xintiandi. The rebuilt neighborhood is Wood's first and best-known work in China, a collage of cobblestone streets, narrow alleyways, and graceful tiled roofs. Xintiandi, which translates as "New Heaven and Earth," has become one of Shanghai's top tourist destinations. Foreigners love it because it evokes the colonial era and is one of the few neighborhoods to escape the wrecker's ball, while locals are drawn to the bistros, bars, and boutiques that lend it a Western cachet.

Wood's work at Xintiandi has become a symbol of the changing aspirations China has for Shanghai. In 1992, Deng Xiaoping declared that Shanghai would be "the head of the dragon" pulling the country into the future, and the Chinese have poured tens of billions of dollars into rebuilding the city after a half-century of neglect. The pace has slackened after a a scandal over municipal pension money spent on questionable real estate deals, but the city is still booming.

Problem is, Shanghai has long preferred megaprojects that blindly ape the kind of high-rise developments that scream "modernity" but have little to do with traditional Chinese culture. Until Ben Wood, that is. Xintiandi represents Wood's signature style: Instead of calling in the bulldozers, he imagines a rundown neighborhood as something refreshed. He refurbishes old buildings, saves the facades of others while gutting their interiors, and designs new structures that blend in.

That graceful melding of old and new fits Shanghai's ambitions as it steams toward its third decade of hypergrowth. Like Renaissance Florence, London in the 1800s, or New York early in the 20th century, Shanghai aims to muscle its way into a top spot in the global economic order—a role it played back in the 1920s. Today, Shanghai is the mainland's most populous city, with 18 million residents. It's home to the Asia headquarters of more than 150 global corporations, including General Motors, IBM , and Alcatel-Lucent. And multinationals are boosting their commitment. GM today employs some 1,800 white-collar workers in the city, 60% more than in 2004, while Citibank now has 2,000 employees there, up from 80 in 1999. "Shanghai has very visible ambitions to be a major financial center in the region and perhaps beyond," says Richard Stanley, CEO of Citigroup China.

Expatriates love Shanghai's nightlife, while skilled young Chinese and migrant laborers have rushed to cash in on the city's surging economy. Shanghai is growing at 12%—even faster than the 10.7% expansion that China as a whole saw in 2006—and the city's gross domestic product was $136 billion last year. That's less than half of London's, but Shanghai's growth is three times as fast the British capital's. And Shanghai has attracted some $120 billion in foreign direct investment since 1992, including commitments of $14.6 billion last year, or 23% of China's total fdi for 2006. "You are witnessing the greatest transformation of a piece of earth in history. It's mind-boggling," says Greg Yager, vice-president of Baltimore design firm RTKL Associates, which has done planning work in the city.

The opportunities in Shanghai have attracted scores of foreign architects, who have helped craft one of the world's most extraordinary skylines. In the financial district of Pudong, which until two decades ago was little more than rice paddies and small factories, the 88-story Jin Mao Tower (designed by Chicago's Skidmore, Owings & Merrill) is home to GM, Credit Lyonnais, and IBM. Next door, the 101-story Shanghai World Financial Center (from New York's Kohn Pederson Fox Associates)—originally planned as the world's tallest building, but now eclipsed by Taiwan's Taipei 101—is about three-quarters completed. Across the Huangpu River, the 66-story Plaza 66 (by Atlanta-based John Portman & Associates) houses General Electric, BP, and KPMG. And the once-dilapidated Bund, the erstwhile Wall Street of Asia on the riverfront, has been re-energized with packed nightclubs, tony boutiques, and trendy restaurants. "Shanghai is a dynamic, exciting, increasingly multicultural city," says Robert Pallash, president for Asia at auto-parts maker Visteon Corp., which moved its regional headquarters to Shanghai from Japan in 2003. One reason the city won out over Bangkok, Hong Kong, and Singapore: It's an easier sell for expats. "It's very important to attract people from the global organization," Pallash says.

Attracting locals is equally important. The legions of migrants flocking to Shanghai are filling Visteon's factories, as well as those of Intel, Philips, Honeywell, and scores of other multinationals. And the city's universities are churning out thousands of engineering grads every year, which provides a steady supply of researchers for labs run by corporations from around the world. At its facility in Zizhu Science Park, 18 miles southwest of the center, Intel Corp. now employs 1,000 people, up from about 40 in 2000. A decade ago, "it was difficult to find a high-quality office building," and qualified workers were scarce, says Wang Wen-hann, general manager of the lab. Today, "all these factors have matured," he says.

OVERSTRETCHED INFRASTRUCTURE
In neighborhood after neighborhood, though, eight-lane expressways and steel-and-glass behemoths crowd out gracious townhouses and tenements dating to the early 20th century. The city has doubled its housing stock over the past two decades, but most of those new homes are in soulless skyscrapers. And many of Pudong's towers stand alongside the 100-yard-wide Century Avenue, a thoroughfare that's nearly impossible to cross and lacks so much as a kiosk selling newspapers, let alone a sidewalk café. The district represents "a failure to create a livable urban environment," says Tom Doctoroff, the chief executive for Greater China at ad agency JWT Co.

That's a problem for a place with mega-ambitions. If companies find that Shanghai has become too pricey or too congested for the kinds of employees they want to attract, it may quickly fall from the global hot list. Top-quality office space today costs more than in Midtown Manhattan, and expatriates typically pay $5,000 to $10,000 or even more in monthly rent. The air can be unbreathable, and the highways are clogged much of the day. "You have a city whose infrastructure is totally stretched," says Steve Mullinjer, managing partner at executive search firm Heidrick & Struggles in Shanghai. "It's like a wild horse...with no way to rein it in."

Controlling that runaway horse is Job One in Shanghai, and how Shanghai grapples with that issue is important for all of China. Hundreds of millions of migrants are likely to move to the mainland's cities in coming decades, and much of the rest of the country looks to the city for cues. So if Shanghai bulldozes its history to build highways, you can bet that many other cities will follow suit. Since 2000 the number of cars on the mainland has tripled, and Shanghai and Beijing are already ringed with single-family homes and new communities accessible only by car. With 1.3 billion people, the mainland can ill afford the kind of suburban culture that many seem to want. "The government is now more aware of quality-of-life issues," says Daniel Vasella, chairman of pharmaceutical giant Novartis and head of the International Business Leaders Advisory Council for the Mayor of Shanghai. "They realize that if you can't deliver [a good standard of living], people won't want to live there."

Perhaps that's why the Chinese have taken so readily to Ben Wood. The 59-year-old architect, whose white beard and ruddy complexion make him seem more like a good ol' boy from his native Georgia than a hotshot designer, was drawn to Shanghai's street life and the crowded tenements known as shikumen. These two-story buildings, a mélange of Chinese and Western styles with carved stone details, had remained largely untouched since the Communists took over in 1949. But when Wood arrived in Shanghai in 1998 to design Xintiandi, they were rapidly being razed.

At the Xintiandi site, Wood suggested saving the structures and creating a walking district that would preserve the sense of community of old Shanghai. That was a revelation to the city fathers, who until then had struggled to find an alternate way of expressing Shanghai's newfound confidence and affluence. Having proved it can replicate the West in districts such as Pudong, the city was looking for a second wave of development that wouldn't just import styles wholesale, but could give shape to its aspirations as a world-class metropolis. Wood "understands the relationship between new and old buildings," says Wu Jiang, deputy director of the Shanghai Urban Planning Bureau.

If Wood has been good for Shanghai, Shanghai has been equally good to Wood. He kept a relatively low profile in the U.S., but in China he's a true star. Xintiandi's success has spawned countless imitators on the mainland, and Wood has received more than a dozen major commissions. Today he runs a studio of 30 draftsmen and designers, and inquiries from prospective clients roll in almost daily. He is working on a mountain resort, a development similar to Xintiandi in the western city of Chongqing, and another in Hangzhou, a lakeside city 120 miles southwest of Shanghai. Wood "is totally different from other foreigners practicing in China," says Ma Qingyun, a Shanghai architect and now dean of the School of Architecture at the University of Southern California. "He is quite into the human side."

TRICKY POLITICAL LANDSCAPE
To keep Shanghai's growth from tearing apart its urban fabric, the city is building nine new communities on the periphery that are expected to house a total of a million or more newcomers by 2020. These projects, called "One City, Nine Towns," were planned as self-sufficient satellite cities where residents can live, work, and shop, without having to travel into central Shanghai. Each was also designed thematically to resemble the cities of other countries or cultures—a notion some dismiss as frivolous. In Fencheng, for instance, a Spanish group is creating streetscapes inspired by Barcelona's Ramblas promenade. Albert Speer, son of Hitler's favorite architect, is the brains behind Anting, a community modeled after small cities in Germany and home to the Shanghai Formula One circuit as well as Volkwagen's joint-venture auto factory. And Thames Town looks like an English village with cobblestone streets, half-timbered Tudor buidings, red telephone boxes, and a statue of Sir Winston Churchill. "It's farcical," Wood says. "Why pretend you are living in some fantasy land?"

Wood's contribution to the nine towns effort is less garish. In Qingpu, on the southwestern edge of Shanghai, he is working on an 830-unit residential complex that draws its inspiration from the area's ancient canals, bridges, and walkways. His aim, he says, is to create buildings on a human scale that relate to their environs. "The biggest problem in China is that the Forbidden City is burned into every brain," says Wood. "It's symmetrical, monumental, and out of scale."

China's modern-day mandarins can be equally intrusive. In 2004, Rockefeller Group International, the New York-based property development arm of Mitsubishi, hired Wood to plan a 30-acre site the developers call Rock Bund. The project will incorporate a 1928 art deco theater and more than two dozen colonial-era buildings. Rockefeller seemed to have everything going for it, including the support of Shanghai Communist Party Secretary Chen Liangyu.

But in a city changing as rapidly as Shanghai, you never quite know when you might end up building on political quicksand. Last September, Rockefeller executives got a disturbing call from their lawyer, saying, "Our friend is in the slammer." The friend was Wu Minglie, the chairman of New Huangpu Group, a Chinese company that was working with Rockefeller. He had been detained and accused of misappropriating city pension funds for property development. Shortly thereafter Secretary Chen was sacked in what many believe was a power struggle with China's central leadership in Beijing. Rockefeller Group executives declined to comment on the record about the affair, which a company spokesperson calls "extremely delicate." Though most projects have been delayed since Chen's ouster, there's no indication that Rock Bund is in danger of being scuttled.

Despite the headaches, Wood isn't one to shrink from a challenge. A latecomer to architecture, he didn't start practicing until he was 36. By that time he had flown fighter jets with the U.S. Air Force and founded a mountaineering school and a French restaurant in Colorado. At 31, he enrolled in a graduate architecture program at the Massachusetts Institute of Technology. He soon started his own firm with Ecuadoran Carlos Zapata and broke into the big leagues in 1998 with a commission to rebuild Soldier Field, the Chicago Bears' stadium.

When Wood was in the middle of the Soldier Field project, he got a call from Hong Kong. Would he pick up a business-class ticket waiting for him at the airport and come ASAP? Two days later, Wood was being whisked by limo to the offices of Vincent Lo, chairman of property group Shui-On. The meeting lasted five minutes. "He told me, I want you on the next plane to Shanghai and back here tomorrow morning,'" Wood recalls.

After a few hours wandering the dilapidated neighborhoods that would become Xintiandi, Wood returned to Hong Kong to make his pitch. He cited Boston's Faneuil Hall Marketplace and mountain villages in Italy as potential models. As luck would have it, Lo was a fan of the Boston development and had spent time in Tuscany. "After half an hour, I said, This is the man I want to work with,'" says Lo, who gave Wood the job over three competing architects. Within six months, some 1,600 families had been relocated to new developments far from their old homes—not always happily, despite having indoor plumbing and their own kitchens for the first time. "We did things like take off their roofs to speed up the process," Wood says.

The irony of Xintiandi's success is that surrounding blocks have been bulldozed for luxury developments, spelling the end of the local charm that attracted Wood in the first place. Lo now wants to turn adjacent property into a theater district that will rival Broadway or London's West End. Although a few handsome brick buildings will be saved, the expanded site will also include four theaters, a 68-story office tower and high-end apartments. The outdoor dining, meanwhile, won't be at dumpling stands, but at upscale restaurants. "The real tragedy is not the disappearance of the [old buildings], but of life on the streets," Wood says.

As Shanghai's transformation continues apace, Wood is likely to be there to watch it unfold and lend a hand where he can. In 2003, he moved full-time to Shanghai, one of the few foreign architects to make such a commitment. On any given evening, you're likely to find him holding court in the dr Bar, a Xintiandi watering hole he designed and owns, or treating guests to grilled salmon and steaks in his two-story penthouse, followed by a soak in the outdoor hot tub with views of the city's ever-changing skyline. Will he ever go back to the U.S.? Don't bet on it. Shanghai's growth still offers plenty of opportunities, especially for an architect who understands that it takes more than tall buildings to make a truly global capital. "If Shanghai is unable to provide the quality of life of a world city like Paris or London, it will never become a major financial center," Wood says. "But the wild west atmosphere is being replaced by more sophisticated development strategies. And this will ultimately be to Shanghai's advantage." -  Frederick Balfour     BUSINESS WEEK    8 February 2007

Ben Wood has neither the theory-ridden vocabulary nor the matte-black wardrobe typical of maverick architects these days. With his gentle paunch, worn leather sandals and grizzly white beard, he comes across as more of a couch potato than a man of action, though the vintage Chinese army motorcycle and sidecar hint at an adventurous spirit.

Still, over the last five years Mr. Wood has transformed himself from a successful Boston architect into a Shanghai powerbroker whose designs translate into billions of dollars in development.

The profession’s big players are flocking to China to compete for commissions. Even the Dutch architect Rem Koolhaas has raved about the opportunities to be had. But Mr. Wood is one of the very few allowed to build whole neighborhoods without a local associate or a government institute to sign the construction documents. At his occasional public appearances in the United States, architects line up to seek his advice on how to get in on the action.

“I’m trying to change China, and China has definitely changed me,” Mr. Wood said during a recent interview on Martha’s Vineyard, where he and his wife were camping in a safari-style tent. “People have no idea of the scope of the work that’s up for grabs right now. It’s like the Wild West was in America.’’

The turning point for Mr. Wood, now 58, was his 2003 Xintiandi project in downtown Shanghai, a $200 million two-block “entertainment environment” stuffed with modern restaurants, clubs, cafes and boutiques, accessorized with old bricks, stone gates and ornately carved wooden balconies from the dense warren of old courtyard houses that previously filled those blocks. Xintiandi proved so successful a model for urban redevelopment that it spawned at least dozens of duplicates across the country. Developers now use the term “to Xintiandi” when asking their architects for more aspirational China-lite designs.

Critics, however, argue that he has undermined the need to preserve China’s fast-vanishing architectural heritage with a pastiche that is only one photo-op away from Disneyland. In The New Yorker magazine Paul Goldberger described Xintiandi as “a stage set of an idyllic past, created so that people in China can experience the same finely wrought balance of theme park and shopping mall that increasingly passes for upscale urban life in the United States.”

Qingyun Ma, an internationally respected architect in China, said that Xintiandi’s influence “is such that every city wants to have one.”

“Even I myself have done projects that are Xintiandi-ish,’’ he said. “However, this unchallenged embrace of one way is a threat because it abandons other modes of historical practice.”

Mr. Wood has applied his formula to projects all over mainland China, from Chongqing to Wuhan to Hangzhou. In Hangzhou he adapted 10 blocks of a sleepy lakeside area into a resort with pagoda-style roof-scapes, trellis-covered walkways and a high-tech conference center. For his $80 million Cambridge Watertown project in Zhujiajiao, he has proposed narrow canals inspired by China’s 13th-century water-town plans stitched together with picturesque foot bridges and semi-detached contemporary-style condos.

When he ambles through the streets of Shanghai these days, Mr. Wood said, “some still walk up to me because they recognize me, and they are happy and proud of the new life” in their old neighborhood. It sometimes turns out that the well-wishers have been forced out of their homes and into new high-rise apartment buildings elsewhere by Mr. Wood’s projects.

“Wood is a star in China,” said Cliff Pierson, an editor at Architectural Record magazine who manages a biannual awards program for new Chinese architecture. “China needed someone like Wood to show them you can make more money by saving rather than tearing down old buildings. No one had done that before because it was so much easier to work with a blank slate.

“Now there are dozens of copycats. But it’s not so much the number that’s so influential but that Wood has changed the way people with money think about public places.”

In Shanghai, Mr. Wood is now undertaking the next chapter for Xintiandi: a complete theater district with four Broadway-style performance spaces, two of which he promises will be “Andrew Lloyd Weberesque,” with 2,800 seats. For the project, now under way, Kohn Pedersen Fox architects have also designed a futuristic oval-shaped skyscraper, which will be accompanied by at least three other towers, along with a Times-Square-like intersection featuring huge electronic billboards and — a favorite Wood feature — an artificial lake.

A popular open-air antiques row, now home to some 180 dealers, will be dismantled, upgraded and rebuilt in replicate form. About 40 “top dealers” will be readmitted. Underground the whole thing connects to five levels of parking.

Mr. Wood casts himself as a kind of swashbuckling suit. After stints as a fighter pilot, restaurateur, ski bum and contractor, he earned his architecture degree from the Massachusetts Institute of Technology in 1984, when he was 37. He then spent 10 years working for Ben Thompson, the architect and mastermind of something known in the industry as the festival marketplace. Most visible in places like Faneuil Hall in Boston and South Street Seaport in New York, it is an economic juggernaut of arguable distinction wherein the dilapidated gives way to the upscale and the trendy, all with a dash of old-time historical flavor.

“Ben Thompson taught me that architecture should be about more than just making buildings that don’t fall down,” Mr. Wood said. He gestured toward a stack of carved timbers from a 150-year-old Chinese temple that he’d seen on the back of a truck in China. He talked the driver into selling them and now intends to build with them on property he owns in Martha’s Vineyard.

The call to go to China came in 1998, when Mr. Wood was running an architecture practice with Carlos Zapata in Boston. (His best-known project with Mr. Zapata was a controversial stadium renovation at Soldier Field, home of the Chicago Bears.) The two were invited along with several Western architectural firms, including Skidmore, Owings & Merrill, to enter a Hong Kong developer’s competition for a two-block neighborhood in old Shanghai. There was a catch: the site had to be cleared of undesirable elements, and the job had to be well under way by May 1999 in time for an official visit already scheduled by President Jiang Zemin.

While other architects suggested tearing out the old rabbit warren of courtyard houses, built by the French in the 1860’s on interlaced narrow lanes, Mr. Wood said he could design around and with them. He got the job.

Working in Shanghai was a revelation. He did not speak Mandarin, and he hiked around the city for miles so he would be able to find his way back to his hotel without relying on a cab. “If you say ‘the Ritz,’ some cabdrivers won’t understand you,” Mr. Wood said. “They call it ‘Por-ta-ma-na’ after John Portman, the architect who designed it.”

To get a feel for the local vernacular, he asked guides to take him to any place that hadn’t changed much for a hundred years or since before there was electricity. He was especially struck, he said, by the street life along the narrow alleys in the older parts of the French Concession. Private life was conducted in public to a degree he had not witnessed elsewhere. “They even walk around outside in their pajamas and underwear if it’s hot,” Mr. Wood recalled.

At Xintiandi, Mr. Wood fostered communal feeling in some notably un-Chinese ways. Despite having been warned that there is no Chinese tradition for alfresco dining, he designed the neighborhood to be chockablock with outdoor cafes. He also created a wide esplanade sweeping along the edge of an artificial lake.

Photographs show a waterfront view with a swath of well-kept lawn, a string of lampposts along a stone path and various high-rises twinkling at night in the background: hardly a traditional vista for Shanghai. But local residents have made it their own, Mr. Wood said, coming down in droves on summer nights to gather for ballroom dancing or to play Canto Pop on their boomboxes. Xintiandi is also a magnet for foreign tourists, who flock to its clubs by night.

To make way for all this, many of the 4,500 people who used to live there had to be relocated to modern apartment buildings; those who did not want to go, Mr. Wood acknowledged, were likely to find their roofs removed. Such forced relocations are frequently criticized by foreigners. Locals, perhaps used to even more radical changes, seem to take them more in stride. Mr. Wood himself simply says that everyone was fairly compensated. As for the old schoolhouse where Mao attended the first meeting of the Communist Party, it has been preserved.

Local land values are now soaring. But Mr. Wood said he was most proud of the way that Xintiandi has attracted small entrepreneurs who are buying and renting shop fronts for their own boutique businesses.

“I was working in unknown territory, and sometimes it was scary,” he said of that first project. “At the same time here was someplace where I could do more in 15 years than most architects do in their entire careers.” So in 2004 he decided to move to China full time.

Two years later he still comes across as a hyped-up romantic who relishes the prospect of living big and does not concern himself overmuch with compromises that a more fastidious architect might refuse.

To succeed he has had to learn fast about a place where the word for “fake” is a compliment, meaning something that did not cost full price. Certain back-alley copy shops, he learned by grim experience, sell duplicates of the computer discs that architects drop off for reproduction. It may be only a matter of hours before a PowerPoint presentation of a new design is available for sale in a pirated edition.

As a result so-called fake firms abound, he said. Mr. Wood said he sometimes interviewed young Chinese designers who proudly show him work he knows was actually done by well-known firms like SOM, Cesar Pelli, Kohn Pedersen Fox or even his own.

Mr. Wood has also learned the finer points of etiquette: how to plan for the procession of V.I.P.’s visiting the construction site in their black cars, or whether to wear a tie to meetings with representatives of the government (which typically has a 10 percent stake in most large-scale construction). The more elite the official is, the less likely he’ll be to wear a tie. To get the job, it pays to show confidence and follow suit.

In spite of such complexities, Mr. Wood said that building in China had an appealing immediacy. “In the United States you are not allowed as an architect to speak to a worker on a construction site, make a suggestion or help figure out a design flaw when it crops up,” he said, lamenting the protocols regarding liabilities and the union regulations that govern most American construction sites. On an American project, “you can’t say anything at all without a lawyer in tow,’’ he added. “In China they often don’t even bother with contracts.”

Mr. Wood has opened a martini bar, called DR (for Design Research, in tribute to a store founded by Ben Thompson that was a forerunner to Crate & Barrel), in Xintiandi that has become a pit stop for architects and developers visiting from abroad. “It has a definite vibe, part SoHo, part Rick’s Place,” said Mr. Pierson of the Architectural Record. “A lot of expats go there, and Wood loves holding court. He wears that beard, and in China they tend to automatically respect people with white beards.”

Mr. Pierson acknowledged that Mr. Wood’s approach to architecture would not go over well with Western preservationists. “He keeps facades, moves pieces around, adds windows where there were none,’’ he said. “If he were doing that with historic properties in the U.S., I would be more critical. But for China saving even bits and pieces is an important leap. Ten years from now when preservation there has become more sophisticated, they’ll be able to look back and say this was the first important step.”

For Henry Ng of the World Monuments Fund, freewheeling economic development is “ a threat more lethal than razing buildings.” And Mr. Wood’s design approach is appealing to Chinese developers because it shows that “preservation can be profitable,’’ said Mr. Ng, who was reached by e-mail while touring the hutong, or ancient city lanes, in Beijing.

Mr. Wood is dismissive of the complaints that his projects have a theme-park air. “That’s only because they are so clean,” he said. “As for authenticity, consider this: Every sidewalk paver is made of hand-hammered granite. It takes a day to install four of them.”

Preservation, he said, is not his goal anyway: “The real point is not the architecture of the place, but the new life a place attracts. The hutong probably should be torn down. They can’t even accommodate sewage pipes, let alone cables for everything else people need today. That doesn’t mean destroy the kind of place they were.”

Still, the heady days when this corner of the world was a Western architect’s oyster may be winding down. Chinese architects want the commissions for themselves. “I don’t like being confronted at every meeting with a room full of architects staring at me resentfully,’’ Mr. Wood said, adding, “The window is closing quite fast.”

For the next stage in his career he wants to design eco-resorts in Yunnan Province, a rolling mountainous and pasture region near the Tibetan border that was renamed Shangri-La to attract tourism development. He envisions visitors staying in tents much like his own on Martha’s Vineyard.

He has also bought an old Tibetan farmhouse that he hopes to renovate and where he might be able to keep and fly a 1947 Seabee plane he has had restored.

“I’m going to stay in China a while longer,” he said. “There are limits to what I can do in the United States. I don’t fit in with the C.E.O. culture there. But in China being flamboyant is a good thing.” - by Julie Iovine   NEW YORK TIMES  13 Aug 2006

Chinese American's Shanghai showcase

Handel Lee - the man behind this city's most chic building, "Three on the Bund" - wants to turn ever-changing Shanghai into a showcase of contemporary Chinese art.

The 43-year-old Chinese American lawyer spent the first 20 years of his life in the United States and the second half in China, where he arrived in 1981. His project for Shanghai started in 1999.

"I wanted to open an art gallery like I did in Beijing in 1996," he told AFP.

He chose a road running along the Huangpu river, a once-luxurious strip called "The Bund" that had been a symbol of the power of the big business and banking of the 1920s and 1930s and which he wanted to restore to glory.

With a partner, Lee bought a neo-classical building constructed in 1916 in a Western style. They spent US$48 million on the building and another US$33 million on renovations.

What resulted has become home to seven floors, each measuring 12,000 square meters (129,120 square feet), of the most exclusive fashion, art, spas and restaurants in China's largest and wealthiest city.

The plan was undoubtedly influenced by his parents - his artist mother and engineer father who fled after the communist party of Mao Zedong took power in 1949.

"Elegance, fine art, culture, lifestyle went away the 50 past years. It's a tragedy," the elegant lawyer said.

After 20 years in Maryland and New York, Lee left the United States to study in Beijing.

He arrived at a time when China was starting to open to the outside world.

"In 1981, it was a totally different world from today: very few cars, no private cars, people were very poor," he said.

"In 1982, I decided to come back definitely. I was lucky to be born and raised in the United States so I wanted to do something for China. My parents always reminded me to be proud of being Chinese," said Lee, who spends his time between Beijing and Shanghai.

He opened an art gallery in Beijing, but wanted to do more in Shanghai.

"Chinese people don't understand contemporary art," he said.

"A restaurant draws people. They relax, have a good time, meet friends and in that state of mind they can accept new ideas," he said.

He is frustrated by even the city government's focus on money and power and lack of interest in culture.

"Today people make money as never before here. But what makes a great civilization is not an army or economy," he said.

"The authorities don't do anything. Art, culture are not emphasized by government. You don't make money with art."

Lee has scores of other projects up his sleeve, in Shanghai and also for Tokyo, London and Paris.

And in 2006, he wants to launch another version of "Three on the Bund" in Beijing in the former U.S. embassy, close to Tiananmen Square.

He is proud of having built "the most significant place in Shanghai" but admits the place does not make much money.

"The return on the investment will be long, but what was most important was to create a space that holds the most dynamic creative aspects of contemporary society," he said.

"At the moment there are no good Chinese designers, no good Chinese architects because there is no stimulation, no creativity."   -   By Dominique Ageorges     AFP     1 Nov   2004   

An American Born Chinese Doing Real Estate Deals in Shanghai

Obsessive people get things done and Handel Lee is a man obsessed. His mission to restore and convert one of Shanghai's historic buildings on The Bund into a commercially driven cultural centre has just been realised.

Phase one of the project, called simply by the building's address, Three on The Bund, is a contemporary art gallery in the building's central atrium, which opened for business last month.

This is the culmination of five years of hard slog since Mr Lee, 42, a Maryland-born son of Chinese immigrants to the United States, started work on the project in 1999.

With the former 1916 Union Assurance Building on Shanghai's historic waterfront, he becomes the first foreigner (he is a United States citizen) to negotiate the purchase of an entire building on The Bund. Though the mainland's policy on land ownership may have been eased, it remains almost impossible under current legislation in high-profile locations. But Mr Lee, an energy sector specialist and partner in the Beijing office of Houston-based law firm Vinson and Elkins, was undeterred.

Having overcome official roadblocks in 1996 to open his successful Courtyard restaurant-cum-art gallery in the grounds of the Forbidden City in Beijing, he knew what perseverance could achieve.

When he moved to Beijing from Washington DC in 1991, Shanghai held little appeal for Mr Lee, who now has homes in both cities.

"I used to hate going there, always dusty, dirty and chaotic," he admitted. But by 1999 he felt that Shanghai had shrugged off any chips on its shoulder about being second-best to Beijing. "Shanghai people felt they were back at the top of business and society in modern China," he said.

So when he first looked over the seven-storey No 3, The Bund, Shanghai's first steel-framed building, he was intrigued. "It was a shell," said Mr Lee.

At that time The Bund was designated the "financial Wall Street of China, but it wasn't happening so the government started promoting Pudong as the financial centre instead", he said.

Impressed by the "amazing building and location", he saw an opportunity to do "something very different and special. It may sound naive and idealistic but I wanted to do something to help establish standards of culture in Shanghai. I wanted to create something where society could share culture and art." It was the same concept behind the Courtyard in Beijing, he explained. "So many young Chinese people have never experienced art for real."

First he had to convince the Shanghai planners of the wisdom of his Renaissance vision for the building they saw as a potential bank or office.

"We were told The Bund was not zoned for `entertainment' purposes, so we had to get a variance to do something different," he said.

"We got tremendous support from the higher levels of government - and tremendous opposition lower down."

At the time there was confusion about the future of The Bund, and many mid-ranking officials were loath to approve anything that might go against final policy.

Being a business lawyer, he "set up structures that achieve a business goal", said Mr Lee.

It is not a 50-50 split but Mr Lee and his partners, Grand Tour Tires, a Singapore property developer and tyre maker, are shareholders in the project.

He has put his own money in the project, which had an overall investment of about US$47 million, he said. "I wish it were less."

The Shanghai government was firmly behind the project, he said, and a Chinese bank had provided funding, though he would not say which one.

Three on The Bund is set to be Shanghai's hippest and classiest entertainment centre.

It will have China's first Evian Spa, exclusive French and Japanese restaurants, a jazz lounge and private tea salons. The first two floors will house A-list luxury and fashion brands and a Bernardaud Cafe. Mr Lee is overseeing what will be the largest art gallery in Shanghai. He is convinced its central location in the building's atrium is justified by the interest China's nouveaux riches are showing in art.

"We want to show significant contemporary art, and yes, we want to sell it, maybe to bankers, offices and hopefully to collectors so it stays in China," he said.

Paintings will cost from tens to hundreds of thousands of dollars, he admits, but promises affordable prints. As for the future of Three on The Bund, he has no exit strategy. "It's a commercial venture, but aside from a financial return it's something we plan to keep and hold for a very long time."

Investment holding company House of Three, of which Mr Lee is executive chairman, is developer and owner of Three on The Bund.

Established in March 2000, it is incorporated in Hong Kong and is the first privately owned company to obtain approval to develop and own a building on The Bund.

Three on The Bund was the company's first private-equity backed venture in China, Mr Lee said. "I hope it will be profitable soon. When we achieve a return on our investment is another thing, but we're looking at a five- to seven-year investment horizon before we see a return," he said.

What next for Mr Lee? He has started on a new project with the same partners, Grand Tour  Tires. "I can't tell you yet what it is, but it's as central and important a location as The Bund, but in Beijing." SOUTH CHINA MORNING POST     9 Feb 2004

It's hard to imagine where all those cigar-puffing foreign businessmen and cognac-sipping Chi-nese entrepreneurs spent their time before Three on the Bund opened last year. The renovated 1916 building on Shanghai's historic waterfront is a monument to the Chinese dream and the money flowing into the world's hottest market. Designed by American architect Michael Graves, it houses, inter alia, four of the city's top eateries, a spa with rivers of flowing Evian, and the city's flagship Armani store. At the velvet-swathed Jean Georges restaurant, tycoons hammer out transpacific deals over East-meets-West cuisine, while at the Shanghai Gallery of Art, trendsetters browse pricey, contemporary Chinese paintings. But by far the most exclusive spot in this modern-day pleasure palace is the Cupola—the building's domed lookout, which offers both eight-seater and two-seater private dining chambers. The food, courtesy of any of Three on the Bund's restaurants, is tasty enough, but it's the view—of the futuristic skyscrapers of the Pudong business district across the river and the neoclassical financial institutions down the embankment—that is superlative. What better place to toast the 21st century than this lofty crossroads of old and new China? - TIME MAGAZINE   2005  June 27

   >>  Shanghai World Financial Centre


Shanghai office rents close to overtaking NY

The cost of renting high grade offices in Shanghai is close to overtaking that of downtown New York, according to a new survey which underlines China’s rapid economic growth.

The Pudong district in the Chinese city is now the 41st most expensive place to occupy in the world, just behind lower New York at 40th.

For the first time, China has three districts in the Global Market Rents Top 50 compiled by CB Richard Ellis, the property agents, which measures prime A-grade property across the world.

These are Pudong (41), Shanghai’s new business district, Puxi (48), the city’s more established commercial area, and Beijing (50).

The trend reflects China’s emergence as a global economic power.

China’s trade surplus with the US is now running at around $160bn a year. For 2004, its gross domestic product increased 9.5 per cent while industrial production was up 16 per cent.

This growth has been accompanied by an explosion of construction, especially in China’s biggest cities, whose population has mushroomed due to an influx of rural labourers.

However, the speed of property development in China has raised fears of a bubble that could burst if demand slowed down. In Puxi, for instance, vacancy levels are running between 25 per cent and 30 per cent.

“Although Beijing and Shanghai are oversupplied at the moment, that supply is of questionable quality and aimed at the local market rather than international investors,” said Michael Haddock of CBRE. “The space that is built to suitable specifications and appropriate for international occupiers is limited, pushing up the price.”

China-based property experts said demand for prime office properties in Shanghai, and especially Puxi, was strong late last year. While Shanghai’s residential prices and rents have fallen since early 2004, office prices and rents have continued to rise, according to property researchers DTZ.

David Hand, managing director for Jones Lang LaSalle in Beijing, said that compared with a decade ago, China’s larger cities were not at risk of witnessing a major price correction since the volumes of both supply and demand had risen sharply since then, making for a healthier market.

But he nonetheless pointed out China’s property market remained “embryonic” in many respects.

“We still have to get to the point where there is an active secondary market,” added Anna Kalifa, the head of research for Jones Land LaSalle in Beijing.

Mr Hand also noted that multinationals generally preferred to lease expensive office space while Chinese companies were more prone to buying properties.

A handful of international property developers are taking their first tentative steps into the Chinese market, although the risks and barriers to entry are still considered high.

Meanwhile, London’s West End remains the most expensive location in the world, at $191.60/sq ft a year. It is followed by London’s City at $125.80, central Tokyo at $124.36, outer Tokyo at $119.51 and Paris at $96.12.

By contrast, downtown New York is $37.80/sq ft a year and Pudong in Shanghai is $37.61.

Some experts caution against direct comparisons of office costs, given that rent is often measured in different ways in different countries. - By Jim Pickard in London and Andrew Yeh in Beijing      FINANCIAL TIMES      26 January 2005

Fast-lane Shanghai hit by power crunch, traffic

Shanghai is expected to show slower economic growth this year as China's richest city and commercial stronghold grapples with power crunches, a property bubble and traffic snarls, the mayor said on Tuesday.

The city of 20 million -- roughly the population of Australia -- should nonetheless grow 11 percent and rack up its 14th year of double-digit growth, mayor Han Zheng told an annual meeting of the city's parliament.

Despite electricity shortages brought on by a scorching summer and frigid winter and Beijing's efforts to rein in investment in sectors from steel to property nationwide, Shanghai's economy grew 13.5 percent in 2004 -- its fastest rate since 1998.

Han said the city would build more power plants and encourage energy conservation after a summer heat wave forced 1,000 firms to shut temporarily for the second year running, including Volkswagen AG's local plant.

A freezing winter also taxed the grid, at one point forcing more than 800 firms to shift production to graveyard shifts.

"We will enhance our energy security by developing a number of electrical power and liquefied natural gas projects," he told parliament members in a Russian-style exhibition hall, without giving details.

Shanghai raised power generating capacity by more than 10 percent in 2004 and plans to invest another 20 billion yuan ($2.42 billion) to improve grid transmission.

Han, mayor since 2003, also took aim at soaring property prices and increasingly gridlocked traffic, two other corollaries of breakneck growth, promising more affordable housing and greater investment in roads and public transport.

The city is luring multinationals seeking a manufacturing base in low-cost China, but also houses the Asian headquarters of the world's largest auto maker, General Motors Corp , and U.S. conglomerate Honeywell International Inc. .

Shanghai hosted a Formula One Grand Prix in 2004 and is preparing for the World Expo in 2010.

Actual foreign investment rose 12 percent to $6.54 billion in 2004, while exports leapt 52 percent to $73.5 billion, Han added.

Booming trade propelled Shanghai past Rotterdam to become the world's second-busiest port in 2004. Container traffic rose 29 percent to 13.55 million 20-foot equivalent units.

Some previous Shanghai mayors have gone on to join the rarefied ranks of China's cabinet in Beijing, including former president Jiang Zemin and former premier Zhu Rongji.

Concerns had surfaced Shanghai may be losing its attraction for multinationals compared with cheaper Chinese cities, because of rising housing and consumer goods prices, traffic jams and bureaucracy.

"If not addressed promptly and effectively, they will undermine Shanghai's long-term development," Han said. "We must take these problems very seriously." ($1=8.276 Yuan) - REUTERS     18 January 2005

Shanghai Property Synopsis

Having grown at a phenomenal rate in the past several years, Shanghai's residential property market continues to improve but has eased into a steadier pace. The buoyant rebound has been in part due to speculative buying and developers cashing in on the rising demand.

However, to avert any possible overheating, the government introduced several measures in the past year such as more stringent regulations for developers, credit access and transfer of properties. With fears of excessive supply and speculative activity in check, the market has been brought into better balance.

Since the last trough in 1999, home prices have risen some 90 per cent. In 2003 alone, prices went up 25-40 per cent while the increase has moderated to 12-15 per cent for the first eight months of this year.

Investment grade properties, which encompass mid- to high-end apartments or villas in the US$1,500-US$2,000 psm price range, have also seen their prices rise - possibly even more for those in the city centre due to their limited supply.

With supply of investment grade developments in prime locations being restrained by recent regulations, existing or soon-to-be-launched projects will be well placed to meet the still-rising occupational demand.

Two such properties coming up in the next six months are phases two and three of New Westgate Garden at Fuxing/Zhaozhou Road near Huaihai Road and Chevalier Place in the prime district of Huashan Road.

Apart from capital appreciation, rental demand remains healthy as more multinational corporations continue to make Shanghai their regional base. High-end apartments in the city are usually the preferred choice of expatriates and can command an average rent of US$17 psm per month, translating to yields of 7-8 per cent.

Unlike other Asian countries that have a more mature economy and property market, Shanghai's economy and property market are still at the growth stage. Demand for housing will continue to grow - both for owner occupation and investment - and prices should continue to see a steady rise in tandem with economic growth. - 2004 Oct    SINGAPORE BUSINESS TIMES

Luxury marques make a beeline for Shanghai

Plaza 66, Citic, Portman, New Sogo, Times Square, Three on the Bund and soon 18 on the Bund: in China's wealthiest city Shanghai, skyscrapers are pushing through old suburbs and temples to luxury abound.

'Five years ago, there were about 20-30 luxury shops here. Today, everyone is here and their networks in continental China are becoming more and more significant,' McKinsey management consultant Jacques Penhirin told AFP.

Christian Dior, which has been in China since 1998, has, for example, doubled its space at its top-flight Plaza 66 store and is planning to open Dior Hommes in December to join Hermes, Vuitton, Prada, Celine, Versace and Cartier at the elite location. Shanghai is the most international city in China and counts a high number of Western and Asian expatriates among its population of 17 million people.

Many among the Chinese diaspora have also returned to put down roots, such as Yue-Sai Kan, one of the most powerful women in China.

In 1992, she successfully launched the first Chinese cosmetics company, which has since come under the control of cosmetics giant L'Oreal with Ms Kan as vice-president of its China operations.

But Shanghai is an expensive city in a largely poor nation, in which McKinsey estimates only 300,000 people in a population of 1.3 billion have more than US$1 million in assets, excluding property. This has made the metropolis merely a shopwindow for most, displaying luxury items that are highly taxed in mainland China.

'Prices can be 30 per cent higher in Shanghai compared to Hong Kong,' Mr Penhirin said.

People are still buying though, with gifts to smooth business transactions and pamper wives and mistresses making up a 'not insignificant' part of the turnover, he said.

Dior couture and perfume Asian representative Pierre Denis is in no doubt that 'luxury in Shanghai, as in China, is a reality'.

'China, with Hong Kong and Taiwan, represents 10 per cent of the business of Christian Dior couture,' he told AFP.

For Chinese consumers, who have suffered many years of privation under communist rule, 'luxury begins with handbags and skin creams or lipsticks', he said.

Most interested are a new generation of women in business, aged between 25 and 35, he said.

Nonetheless, an average Dior bag is double the city's average monthly wage, retailing for 6,000-8,000 yuan (S$1,205-1,607) with the mean salary between 3,000 and 4,000 yuan.

Not all the labels have set up shop in Shanghai, but the most important are here and they agree that there is strong potential in the Chinese market.

It is a matter of 'familiarising the Chinese with the new names that they do not know and are beginning to see in the local fashion magazines', Mr Denis said. - AFP    2 Nov 2004

Shanghai snippets

Among Shanghai’s home-grown talent are Joan Chen, the glamorous, American-based actress who starred in ‘‘The Last Emperor’’ and ‘‘Twin Peaks,’’ painter Chen Yifei and veteran soccer star Fan Zhiyi, whose athletic prowess helped China reach the World Cup finals for the first time.

Shanghai is the only Chinese city with two international airports. The new facility at Pudong handles the bulk of international flights, while the older Hongqiao has domestic flights and short-haul flights to such destinations as Hong Kong.

The legendary Peace Hotel Jazz Band is still going strong nightly. When China opened up to tourism in the 1980s, the old-timers regrouped and have even been on overseas tours, playing the traditional jazz they used to play in nightclubs in pre-1949 Shanghai.

Actor Dennis Hopper, known for his role in the influential movie ‘‘Easy Rider,’’ recently wound up filming a futuristic television series in Shanghai.

When former U.S. President Bill Clinton stayed at the Portman Ritz-Carlton, chefs rustled up the president’s preferred low-fat breakfast muffins and - to feed accompanying bodyguards and staff - placed orders for 8,000 eggs, 200 kilograms (440 pounds) of fruit and 300 Peking ducks.

One of the city’s most famous dishes is Shanghai hairy crabs, only in season for a short time (usually mid-to-late November) and much prized by gourmet diners in Shanghai and elsewhere.

Mao-tai, the fiery and powerful rice wine used to toast people at traditional banquets in Shanghai and other parts of China, won an award at the San Francisco World Expo back in 1915.

The top-selling household appliance in Shanghai is the color television. Some 806,914 are purchased annually, followed by 428,585 electric fans and 420,585 air conditioners.  - INTERNATIONAL HERALD TRIBUNE

Shanghai Port aims for #1  

The Shanghai government's port operator is planning to spend 5 billion yuan, or $604 million, on the first phase of a deepwater project that may make the city the world's biggest container handler by 2010.    

Shanghai Port Container and its state-owned parent company will invest the money in Yangshan port, which is being constructed 28 kilometers, or 17 miles, from China's largest commercial city, the company said Saturday in a statement in the Shanghai Securities News.  

China is pushing ahead with the $16 billion project to help end transport bottlenecks caused by surging foreign trade. Overseas operators, including Hutchison Whampoa and PSA, have expressed interest in investing in Yangshan, which is designed to handle 25 million standard containers annually, more than Hong Kong's total of 21 million containers last year. 

"The investment will help to ease berth constraints for Shanghai port and create room for future expansion," said Ma Ying, a Shanghai-based analyst at Haitong Securities. Shanghai Port's "earnings may get a boost from 2006 after the Yangshan Port starts operation."  

Chinese ports including Shanghai, Ningbo and Shenzhen handled 48 million 20-foot cargo containers last year, 30 percent more than in 2002 and surpassing the United States for the first time, China\'s Ministry of Communications said in January.  Hong Kong is the world's busiest port, handling 21 million containers last year, followed by Singapore with 18 million and Shanghai with 10.65 million, the Oriental Morning Post said in January.   Shanghai's container traffic may more than double to about 25 million containers by 2010, Shanghai Port said.  Yangshan port, which will have 52 berths when completed in 2020, will enable bigger container ships to dock at Shanghai. 

PSA, which operates Singapore's port, Hutchison Whampoa, controlled by the Hong Kong tycoon Li Ka-shing, and P&O Ned Lloyd Container Line are among overseas companies that have been in talks to invest in the project, the Shanghai government has said. . China's container shipments are still rising after the government introduced measures this year to cool economic growth, shipping lines such as China Ocean Shipping Group and Kawasaki Kisen Kaisha of Japan said last week.  

Shipments to and from China rose 29 percent in May, according to the latest figures from the London-based Drewry Shipping Consultants. That was the same rate as April and higher than March. . The government is trying to slow economic growth to 7 percent this year, from a seven-year high of 9.1 percent in 2003, by clamping down on lending to industries such as steel and real estate, where an investment boom has contributed to transport bottlenecks, energy shortages and rising raw materials prices. 

China's exports surged 47 percent in June to a record $51 billion, while imports jumped 51 percent to $49 billion, the Beijing-based Ministry of Commerce said last week. The nation's share of world trade has tripled to about 7 percent in the past decade, making China the world's third-largest importer.   Shanghai Port will spend 2.55 billion yuan to take a 51 percent stake in Shanghai Yangshan International Container Wharf, the company said in its statement. Shanghai International Port will invest 2.45 billion yuan for the remainder, it said. . Shanghai Port's net income rose 28.3 percent to 998.8 million yuan last year from a year earlier as revenue climbed a third to 3.3 billion yuan.   First-quarter profit dropped 7.6 percent because of higher costs, while sales jumped 20.5 percent to 912.8 million yuan. . Shareholders will vote on the investment plan on Aug. 20, the company said. Shanghai Port may sell additional shares or convertible bonds to finance the investment, said Ma at Haitong.  - by  Jianguo Jian      Bloomberg News    July 19, 2004

Starry-eyed Broadway producers dream of China

NEW YORK: If starry-eyed young actors dream of making it big one day on Broadway, what do starry-eyed Broadway producers dream of? China, baby.

Next week the Nederlanders, one of the big three Broadway theater owners, are planning to announce the details of a new company they have formed that, among other things, will present and market tours and live entertainment in China. The entry of the Nederlanders into the Asian market is only the latest sign of how sizzling it has become.

"The Broadway brand is very hot to them," said Simone Genatt, one of the creators of Broadway Asia Entertainment, a company that produces and presents tours in Asia. "There are a lot of theaters going up across mainland China."

The company, Nederlander New Century, to be unveiled officially next week, was first put together a year ago as a joint venture of Nederlander Worldwide Entertainment and a group based in China, Beijing Time New Century Entertainment. The plan was first reported in Crain's New York.

Broadway shows have been in Japan for years and the touring business has been spreading to South Korea, Singapore and other Asian countries. China represents a significantly larger marketplace. In September 2005, its Ministry of Culture announced that it would allow foreign investment in the entertainment industry; Nederlander New Century is the first company to be established under the new rules.

Taking Broadway to China over the past decade has been a slow process and at times a thorny one; presenters sometimes have to cope with a bramble of bureaucracy and an audience that is by and large unfamiliar with the Western musical.

It does not help that most of the productions presented have been in English. Tickets are less expensive in China, so the tours need to be produced more efficiently.

But the rush of eager producers and presenters is growing crowded. At the head of the pack are three operations based in New York: Broadway Asia Entertainment; the British impresario Cameron Mackintosh (who brought a production of "Les Misérables" to China in 2002); and Disney Theatricals, part of Walt Disney Co.

Independent tours are dancing into China as well: A tour of "Mamma Mia!" will go to Beijing for a short engagement in August.

Broadway Asia Co. was created in 1991 by Genatt and Marc Routh. Two and a half years ago it entered into a formal partnership — creating Broadway Asia Entertainment — with the Frankel/Viertel/Routh/Baruch Group, the producing and management company behind "Hairspray," "The Producers" and the latest revival of "Sweeney Todd."

Broadway Asia, which holds the Asian licensing rights to the Rodgers & Hammerstein library, has already produced a tour of "The Sound of Music" in China. Tours of "The King and I" and Chinese-language versions of "SpongeBob SquarePants Live!" and the Off Broadway musical "I Love You, You're Perfect, Now Change" are scheduled to begin in the next few months.

Genatt said Broadway Asia was also creating theatrical training schools in several Asian cities, teaching the fundamentals of musical theater performance. Although the labor for the shows is local, the performers in the tours have in most cases come from English-speaking countries.

"We want to help build the infrastructure for the future of Chinese touring," Genatt said, adding that Broadway Asia was one of the producers of a planned $12 million original Chinese musical, "The Monkey King."

Disney Theatricals jumped into the mix in 1995, when "Beauty and the Beast" opened in Tokyo. Four yeas later, a licensed Chinese-language production of "Beauty" was presented in Beijing, where it ran for four weeks.

David Schrader, managing director and chief financial officer of Disney Theatricals, said one of the main challenges in many parts of Asia was finding theaters. Major cities like Beijing and Shanghai have elaborate performing arts centers that play host to orchestral and dance performances, leaving small gaps for theater.

The government is building more theaters and converting some buildings that were meant for other uses. But given the current landscape, Schrader said, touring is more logical than producing blockbusters from the ground up. That has not stopped Disney from trying for extended runs.

The longest engagement for Disney so far — and for any Western musical, Schrader said — was a 13-week run of "The Lion King" at the Shanghai Grand last year.    - by Campbell Robertson    INTERNATIONAL HERALD TRIBUNE     14 March 2007

Shanghai Covets a Big Role on Asia's Cultural Stage
  
Chang W. Lee/The New York Times
A visitor with masks at the Shanghai Museum, one of several new spaces in the city

With its bold and luminous cut-glass design, the Shanghai Grand Theater can stake a claim to being the heart of this city, and the dazzling impression it makes fits this pulsing business center's glittery self-image to a T.

On a recent night here, as a full house settled in to watch an entirely Chinese production of a Broadway-style dance theater show, "Wild Zebra," the opening event in an international dance competition, the city's vice mayor delivered a booming inaugural exhortation that recalled the style of party cadres past.

Shanghai, he announced stiffly, is moving toward the great goal of creating a modern international culture center in Asia. His language was perhaps a bit blunt, but given Shanghai's cultural ambitions, it was difficult to gainsay the message for exaggeration.

For as long as the Communist Party has ruled China, Shanghai has suffered a deep inferiority complex in relation to the capital, Beijing. The early 20th century was Shanghai's moment in the sun, when it had a global reputation as a flashy and fleshy sin city with top-flight Western architecture and a cabaret culture to match.

But much of what was most vibrant then was derived from abroad, at a time when the country was carved up into imperial concessions, and Shanghai was China's main door to the world. Before that, Shanghai, a mere infant of a city, had hardly registered in the long tableau of Chinese history.

Nowadays the city's cultural profile is changing as fast as its skyline, which barely 15 years ago was a drab and low-slung jumble and today ranks easily as one of the world's most fantastic. Determined to raise the city to the level of regional rivals like Tokyo and Hong Kong as well as Beijing, Shanghai officials have made culture a major priority.

Beijing has its Forbidden City, its prestigious national schools and museums, its centuries-old neighborhoods that breathe Chinese culture, none of which Shanghai can realistically challenge. But like Tokyo, all but destroyed in World War II, this city is making a virtue of its newness.

As a cornerstone of the revival, which began in earnest in the early 1990's, the Shanghai government spent $226.8 million, an immense sum in a country still classified as a developing nation, to build a world-class cultural complex in the center city. The recently built structures include the Shanghai Grand Theater, the equally striking Shanghai Museum, in the shape of an ancient Tang vessel, and the Shanghai Art Museum.

The city's investment in premium performance and exhibition spaces, though still modest in comparison with major Western artistic centers, has given Shanghai not only a blush of self confidence but also a cockiness in its rivalry with Beijing.

"Shanghai can already attract talent from all over the country, in fact all over the world," said Chen Feihua, director of the Shanghai dance school that created "Wild Zebra." "Our production values are broader and fit international tastes. `Wild Zebra' has toured on the best stages of Europe, Paris, Berlin, Madrid and other cities, and there is a business element to this that is very particular to Shanghai." He continued: "We go into these markets, and when we return home, we don't just smile and wave goodbye, we bring home 10 million euros. Our friends in Beijing look at our ability to do something like this with a lot of envy."

Shanghai's strategy of build and hope the visitors come seems to be gathering momentum but draws mixed reviews even among the city's artists, who are debating how the city goes about becoming a world-class cultural center.

An ambitious private museum, the Shanghai Gallery of Art, opened in January at Three on the Bund, a lavishly restored building in the historic riverfront district. It has become a premier place for displaying new Chinese artists and established stars. "Shanghai has already become an attractive cultural city," Weng Ling, director of the museum, said. "What we need now is more professionalism, more cultural exchanges and more support for artists."

Across the Huangpu River in the Pudong district, reclaimed swampland that is now home to the city's tallest, most gaudily lighted skyscrapers, the city government is planning a new art museum in collaboration with the Guggenheim Museum in New York, raising doubts among some who wonder whether Shanghai is going too far, too fast.

"A year ago someone told me that China has built 35 cultural complexes, but who is going to perform in them?" asked Kai-Yin Lo, a Hong Kong designer who has advised that city on its artistic development. "The Germans and the Japanese have learned the lesson of hardware: that without the software, you can't maintain the flow. Just look at Bilbao."

"Freedom, too, is very important," she added. "That is what we in Hong Kong can boast."

Urban and cultural development experts agree that museums and other institutions are a starting point. But they say that to emerge as a real cultural powerhouse, a city must fulfill a variety of criteria, including some that defy government planning here.

"Cities that are really vibrant are creative in a lot of different ways," said Richard Florida, a professor of economic development at Carnegie Mellon University in Pittsburgh and the author of "The Rise of the Creative Class . . . And How It's Transforming Work, Leisure, Community and Everyday Life." "You look at a city like Pittsburgh, which built huge artistic institutions, really huge places, and drove all of their artists out — people like Andy Warhol or Billy Strayhorn, because they were too edgy and unconventional, or maybe gay."

Professor Florida said that so far the greatest cities of East Asia were falling short of these criteria. "It is important to have the institutions, but you also need vibrant street culture and an open culture, not only openness toward ethnic diversity, but also diversity in sexual orientation and freedom of expression," he said. "Asia certainly needs a city like this, and Shanghai could be the one. Certainly the city that figures it out first will have some tremendous advantages."

By reputation Shanghai is China's most cosmopolitan city, but even some artists who have succeeded here say the city falls short of the diversity needed to become a world-class cultural center.

"They don't have any international students, and I haven't noticed any international teachers, either," said Yuan Yuan Tan, 28, a native of Shanghai who dances with the San Francisco Ballet. "If Shanghai wants to be an international cultural center, they have to do something about that. The reason I left is that I wanted to explore what ballet is all about, and if I had stayed put, that wouldn't have happened.

By one important measure, however, Shanghai has already succeeded. Increasingly, artists based here have proved they can flourish internationally with little need, as in the past, to go to Beijing first to establish themselves.

"As a new city, the software or the quality of the people and their artistic taste has to be boosted gradually," said Yang Fudong, a specialist in elaborate and deliberately puzzling multimedia displays who has become one of China's best known artists internationally.

At the Shanghai Gallery of Art recently, Mr. Yang was putting the finishing touches on a new exhibit, a labyrinthlike construction with two film projectors casting their images across the faces of people who wander inside. "In Shanghai I see people taking in the shows, going to the museums, even taking their children to the museums, and that's a beautiful thing," he said. "One doesn't become a fat man overnight, so we shouldn't be impatient."     -  NEW YORK TIMES    Published: July 7, 2004



Whether you call them delusions of grandeur or visionary thinking, China's biggest city has plans that are nothing if not bold

Shanghai 04
Jan 15th 2004 | SHANGHAI
From The Economist print edition

Apart  from a dozen Chinese tourists posing for a photograph, the platform at the oval dome-covered Longyang Road Station is nearly empty as the world's fastest train pulls in. Minutes later, with all but a handful of its 500 seats unoccupied, the train glides off, levitating on an electromagnetic cushion that propels it with barely a judder to its top speed of 430kph (267mph). It takes just eight minutes to complete the journey to Pudong International Airport, an ultra-modern structure of glass and steel 30km (19 miles) away.

Considering the thrill of being on the world's first maglev train in commercial use—and the half an hour or more saved on the journey—it might seem odd that so few people are trying it out. Since daily services were launched on December 29th, about 1,000 tickets a day have been sold on weekdays (out of 12,000 available). At weekends, when novelty-seekers are out in greater numbers, the total still only rises to about 5,000, according to Song Xiaojun, general manager of Shanghai Maglev Transportation Development Co. If the arrival of maglev is a great boon to Shanghai's overburdened transportation system, few appear to be aware of it.


It is more than just a cautious approach to rolling out this new, German-supplied, technology that is keeping numbers down. While other countries, including Germany itself, have hesitated about adopting maglev because of the high cost and uncertain returns, Shanghai has happily poured $1.2 billion into its track—even though a glance at a map immediately suggests the risks involved. Longyang Road Station, the only stop apart from the airport, is on the city's eastern fringe, a considerable distance from most residential areas. A taxi ride between the airport and Longyang costs little more than the 75 yuan ($9) price of a maglev ticket and saves the hassle of a transfer.

Shanghai's gamble on maglev, in which seven big state-owned companies have a stake, reflects an approach to the city's development that places great store on massively expensive and commercially dicey projects. Since the early 1990s Shanghai has been driven by a desire to reclaim its pre-communist era status as a regional financial capital and a cosmopolitan haven for international capitalists eager to penetrate the Chinese market—that lavish but raffish world immortalised in Vicki Baum's novel, “Shanghai '37”. China's former prime minister, Zhu Rongji (who previously served as Shanghai's party chief and is normally known for his hard-headedness), strongly backed the maglev project when it got under way in 2000.

Cynics should perhaps beware. The city's “build it and they will come” mentality has, after all, paid off handsomely before. Many people scoffed when Shanghai announced plans in 1990 to develop what was then just an expanse of marshy land, villages and old factories into the city's new financial district. Today Pudong, as the area is called (and where the maglev is located), is a stunning conglomeration of soaring office towers and hi-tech factories (pictured above) that has attracted tens of billions of dollars in foreign investment. Last year, it is reckoned, it sucked in just under $6 billion, more than a tenth of the total for the entire country.

In the next few years, changes in Shanghai—whose GDP, according to the official figures, grew last year by a sizzling 11.8%—could be similarly dramatic. In September, the city is due to host China's first Formula One car-racing event. This has involved one of the biggest outlays of any Formula One venue in the world, with $310m being spent on a 5.5km circuit and related facilities now under construction on the western outskirts of the city.

The plan is to turn this into the centrepiece of a new “auto city” in which all aspects of the industry from manufacturing to sales will be concentrated. Yu Zhifei, deputy general manager of the track's developers, Shanghai International Circuit Co, admits that a lot of Chinese do not know what Formula One is and that many who do are sceptical about the track's ability to make money. But he says he is confident that the facility, with a seating capacity of 200,000, will turn a profit as Chinese consumers' new-found penchant for cars continues to grow apace.

The car craze is evident in the worsening congestion of Shanghai's streets. But to the maglev's operators, this is comforting. “Within a few years, it'll be very inconvenient to take the road to the airport,” enthuses Mr Song. And next year, he says, work should begin on extending the line another 7km to the site where the World Expo will be held in 2010 on the banks of the Huangpu River, much closer to the city centre. The hope is that it will become the main way to visit the fair, an event that lasts several months.

Shanghai's planners regard the World Expo as the city's greatest opportunity to show off its resurgent glory. Scepticism may abound about the ability of World Expos to generate profits. Hanover, site of the last such event in 2000, suffered a disappointing turnout. But Shanghai sees it as comparable to Beijing's hosting of the Olympic Games in 2008: an event that will fix the world's attention on the city's, and the country's, achievements. Compared to that, the $3 billion needed to build the facilities and relocate tens of thousands of residents to the outskirts is a trifle. And, anyway, by then the maglev's operators hope to be making a profit.

Shanghai ends reign of the bicycle

Its biggest city, Shanghai, plans to ban bikes from all major roads next year to ease congestion, state-run newspapers said on Tuesday.

Police will also raise fines tenfold for such cycling infractions as running red lights, Shanghai Daily reported.

Once hailed as the perfect form of proletarian transport, the bicycle used to reign supreme in China as undisputed king of the road.

In fact it was the only way most people had of getting to work.

Each morning, swarms of blue-coated cyclists would pour down special cycle lanes or often fill entire roads, making it hard for the occasional goods lorry or communist party limousine to pass.

Growing wealth
Shanghai was a major centre of the world's biggest bicycle industry and home to many of the earliest factories turning out such brands as Flying Pigeon, Phoenix and Forever.

In recent years, though, Shanghai has developed into a centre of China's new car industry and growing affluence has created a surge in private car ownership.

The number of private cars in Shanghai is expected to top 200,000 by the end of this year.

But while bikes may not be considered cool by the new middle classes, there are still a lot of them about.

Shanghai's urban population of some 20 million own some 9 million bicycles - and the number continues to grow by 1 million per year.

A lot of people are angry at the new rules, saying it is the rising number of cars that are the problem rather than the bikes.

"The way things are now, with cars, bikes and pedestrians all competing desperately for space, it's complete chaos," one resident told BBC News Online.

"But it is very sad that bicycles are the ones that have to go and Shanghai is now becoming a place just for cars, " she added.

Shanghai has in fact taken greater steps than other cities like Beijing to limit the numbers of cars on its streets. It has already raised registration fees and restricted access to the city centre.

Nevertheless, police officials blame bicycles for causing traffic problems by ignoring traffic lights and occupying vehicle lanes.

One Shanghai cyclist contacted by BBC News Online predicted that the new rules might be similarly ignored.

"At the moment on roads where you are not allowed to cycle you simply go up on the pavement and cycle there."     - By Tim Luard     BBC Online     9 Dec 2003


Shanghai has now 304 star-rated hotels, with 15 five-star, 27 four-star and 110 three-star hotels, according to commission statistics. - China Daily     5 Nov 2002

 NEWS STORIES 

MEDIA FACTS:

Average cost of 30"spot during prime time on Shanghai TV - News & Variety, the city's most-watched local channel (based on published rate card)

18:45-19:10 - $8,434
19:10-19:55 - $6,024
20:00-21:00 - $3,886
21:00-21:40 - $2,610

Top 10 brands by adspend on TV (2004):
1. Oil of Olay (Procter & Gamble)
2. KFC ( Yum! Brands)
3. McDonald's (McDonald's Corp.)
4. Rejoice (Procter & Gamble)
5. Nestle - coffee, tea and powdered dairy (Nestle)
6. SK&F - OTC pharmaceutical (SK&F)
7. Danone (Danone)
8. Colgate (Colgate-Palmolive)
9. Huangjindadang - tonic/vitamin
10. Pantene (Procter & Gamble)
(Local channels only, based on rate card.)

Top 10 advertising categories on TV (2004):
1. Skin care
2. Tonics & vitamins
3. Hair care
4. Fast food
5. Passenger vehicles
6. Toilet & liquid soap
7. Entertainment & cultural exhibitions
8. Toothpaste & oral hygiene
9. Skin cleansers
10. Communication equipment & services
(Local channels only, based on rate card.)

Top 5 local channels by ad revenue:
1. Dragon TV
2. East Movie Channel
3. Shanghai TV - News & Variety
4. Shanghai TV - Movie & Drama
5. Shanghai TV - Sports

Sources: Nielsen Media Research & AGB Nielsen Media Research, China   2006

Shanghai building sites to get 'black boxes'

The city will install 'black boxes' on cranes and construction site equipment to help track the cause of building-site accidents, local media reported.

Workplace accidents are rife in booming China, where patchy safety enforcement and corner- cutting by contractors result in the deaths of thousands in the country's coal mines, factories and on building sites every year.

'They will work like the black boxes on aircraft,' Shanghai Daily yesterday quoted Sun Jianping, deputy director of the Shanghai Construction and Transport Commission, as saying.

They would help inspectors discover the cause of accidents involving machinery and whether human error or mechanical breakdown were to blame, Mr Sun said. Shanghai is in the throes of a major construction boom, in part spurred by its preparations for the 2010 World Expo, which has been touted by local authorities as a coming-of-age party for the east Asian financial capital.

The city had recorded 16 accidents at building sites this year, nine of which were caused by human error, the paper said.

On Thursday, China passed a law obligating Chinese officials to provide accurate and timely information about public emergencies. -- Reuters   2007 September 1

 


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