China’s real estate market (CHINA’S WEALTH MARKET Part III)

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China’s private banking industry 中国私人银行业 Part III

Real estate prices continue to rise in Tier 1 cities like Shanghai.  It was estimated this week that prices rose to 22,376 yuan ($3,366) per square meter in October, 2010.  It is expected that the Chinese government will continue with measures meant to curb real estate prices and avoid a painful deflation of Chinese asset values such as is happening across the globe with few exceptions.

The commercial market has also defied dire predictions as increased retail demand has taken much of the excess space resulting from the large increase in business districts and opening of massive new commercial structures.  Demand is simply eating up space in Shanghai and many other Tier 1 and 2 cities.  This is mainly due to the extremely hot retail sector as shown by the new Barbie flagship store in Shanghai and numerous other successful launches this year.

Cash deposits are expected to top their 2009 10% growth in 2010 fiscal year and remain the fastest growing asset class.  Regional distribution of wealth is expected largely remain the same with Guangdong, Shanghai, Beijing, Jiangsu and Zhejiang leading the field and Shandong, Liaoning, Hebei, Fujian, Sichuan and Henan provinces following. In total, these 11 provinces make up over 80% of China’s wealth.

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