Zhang Xin, chief executive of Soho China, the property company, has called the top of China’s urbanisation drive.
“By now, most of the cities in China are built,” she said on the fringes of the World Economic Forum in Davos. “Even small towns are quite built. So I think the intense urbanisation has come to an end.”
Ms Zhang is sometimes called “the woman who built Beijing” because of her company’s extensive developments in the capital. She was talking on Wednesday at Credit Suisse’s Women of Impact Dinner, at which she was a guest of honour.
Other people attending the dinner included George Osborne, UK chancellor of the exchequer; Sheryl Sandberg, Facebook’s chief operating officer; Tony and Cherie Blair, Britain’s former first couple; and chief executives including Ellen Kullman of DuPont and Güler Sabanci of Sabanci Holding.
Ms Zhang was interviewed onstage by Stephanie Ruhle, the journalist and co-host of the dinner, who asked about China’s slowing growth rate. “With urbanisation coming to an end, it’s slowing down,” Ms Zhang said.
However, speaking earlier in the day at the forum, Chinese Premier Li Keqiang had a different message for attendees.
“The potential demand for real estate will remain huge for quite a long time in China, given the large number of rural residents moving to urban areas every year,” he said, according to an official account of his remarks.
About 10m people moved into the cities from the countryside last year, bringing China’s urbanisation rate close to 55 per cent, according to official figures released on Tuesday.
China’s economy last year grew at its slowest pace in 24 years and on Tuesday the IMF lowered its forecast for Chinese growth this year from 7.1 per cent to 6.8 per cent, citing an ongoing slowdown in property and investment.
Many analysts believe the pain has only just begun in China’s real estate sector.
Average nationwide housing prices were down 4.3 per cent in December from a year earlier and overall sales fell 7.6 per cent last year from a year earlier.
But total investment in the sector was still up 10.5 per cent last year, contributing to a massive oversupply of unsold apartments across the country.
On Tuesday Chen Zhenggao, China’s minister of housing, urban and rural development, said the government would stop building subsidised, low-cost housing in third and fourth-tier cities where the oversupply problem is particularly severe.
The government will instead begin subsidising households to help buy some of the apartments left empty by China’s multiyear construction boom.
Beijing says by the end of this year it will have built 46m units of low-income subsidised housing in the past five years, a policy that has exacerbated a housing glut caused by the already frantic investment by commercial real estate developers such as Soho China.
Asked separately about the government’s broader reform agenda, Ms Zhang said: “This is the only moment in the last 20 years where people are less certain about the direction: will we continue to reform, continue to open up? There are very contradictory signs. It’s difficult to say.”
This article has been amended since publication to reflect the fact that Zhang Xin was interviewed by Stephanie Ruhle, not Tina Brown as originally stated.
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