Archives June 2015

Wealthy Chinese lift travel spending

Wealthy Chinese spent more on traveling last year with interest in experiential travel emerging as a new trend, a survey has found.

They spent U.S.$58,000 in average household consumption on travel last year, an increase of 5.5 percent year on year, according to the Chinese Luxury Traveler 2015 jointly released by the Hurun Research Institute and ILTM Asia. Their expenditure per capita hit U.S.$22,600.

The wealthy spent an average of 20 days on travel during the year, up 10 percent or two days more than 2013, according to the report which surveyed 291 super rich travelers, or those who spent U.S.$30,000 or more on travel last year.

Australia was the top destination for the wealthy Chinese, with France in second spot. The Maldives came in third in the preferred international luxury travel destinations, followed by Dubai, the survey found.

Leisure trips, polar exploration and global travel were cited as top choices last year, the report said.

The North Pole and South Pole have become popular as one third of the respondents said they went to either place last year, spending an average of U.S.$19,300 per capita.

“The recent popularity of Antarctica for the Chinese luxury travelers shows how much experiential travel is now on the cards,” said Rupert Hoogewerf, Hurun’s founder.

The report predicted holiday themes to change among the luxury travelers to enjoying local life and culture as well as novel and extreme challenging experiences.

Domestically, Sanya in Hainan Province, Tibet and Hong Kong were the most popular destinations for luxury travelers, the survey found.

Average new home price rises slightly in May

More cities nationwide witness increase compared to April

The average new home price in China’s 100 major cities increased by 0.45 percent month-on-month in May mainly due to the central government’s policy support, data from a property research firm showed Monday.

Analysts expected the recovery to continue in the second half of 2015.

The average new home price in the 100 cities rose to 10,569 yuan ($1,705) per square meter in May from 10,522 yuan per square meter in April, which was a 0.01 percent month-on-month drop, according to a report released by property research firm China Index Academy (CIA) on Monday.

Moreover, 48 cities out of the 100 saw monthly price growth in May compared to 39 in April. The other 52 cities had monthly home price drops in May, while 60 cities had month-on-month price falls in April, the CIA report said.

“The real estate sector recovered in April and this development continued in May, thanks to the authorities’ supportive policies, especially the new mortgage policy issued at the end of March,” Gu Yunchang, deputy head of the China Real Estate and Housing Research Association, told the Global Times on Monday.

A joint notice on March 30 from the People’s Bank of China (PBC), or the central bank, the Ministry of Housing and Urban-Rural Development and the China Banking Regulatory Commission eased mortgage conditions for second-home buyers and waived transactions taxes on apartment sales.

Afterward, Beijing announced lower down payment requirements for first-time buyers and easier conditions for second-home purchases, which took effect on Monday.

The PBC has also cut interest rates three times since November 2014, lowering homebuyers’ financing costs.

Gu said these policies not only lowered the threshold for homebuyers but also gave them confidence in property transactions.

However, the recovery is more obvious in the first- and second-tier cities while third- and fourth-tier cities are still in the process of selling their large home inventories, Zhang Hongwei, research director at Shanghai-based property consultancy ToSpur, wrote in a research note sent to the Global Times on Monday.

“For the whole market, especially in small and medium-sized cities, there will not be a home price surge like what we saw in 2009 due to the remaining inventory of homes as well as the current supply and demand situation,” Gu said, noting destocking should be property developers’ top task instead of charging high prices blindly.

He also predicted that the property market may perform better in the third quarter of this year.

Zhang said transactions will increase in June because besides supportive policies, property developers, especially the listed ones, will try harder to promote sales in June to meet mid-year sales goals.

FTZ to support Shanghai’s innovation plan

Shanghai’s pilot free trade zone will beef up support for the city’s initiatives to build a global technology innovation center and a world financial hub, the zone’s regulator said.

“The expanded free trade zone is off to a good start in its first month of operation. Progress is being made on all fronts,” said Sun Jiwei, executive deputy director of the zone’s administration and head of the Pudong New Area.

The FTZ’s steering committee has set 39 tasks it wants to accomplish this year to push forward reforms. They include the transformation of the government’s role and follow-up management, as well as the promotion of the “four centers,” Sun said, without elaborating.

To support the city’s goal to become a world-class center of innovation, the zone will boost finance’s role in the technology sector, reform the management of venture capital and private equity funds, expand government-led funds and boost participation of private capital, he said.

The regulator is also considering setting up an investment bank in Zhangjiang High-Tech Park. The regulator will encourage the park to work with financial institutions to develop financial products and services for firms in the technology sector, Sun added.

Efforts will also be made to further boost trade facilitation for high-tech companies, such as streamlining clearance procedures for imports and exports of biological materials in a bid to cut research and development costs for biomedicine firms, Sun said.

The FTZ is seeking to attract more multinational financial institutions after the BRICS New Development Bank chose Lujiazui for its headquarters.