(Yicai Global) Feb. 1 -- Some experts think China's real estate companies cannot go abroad to develop, but Wei Jianguo, former vice minister of commerce, disagrees, arguing now is the best time for Chinese real estate developers to go overseas.
Wei made these remark at the 2018 (ninth) Chinese real estate leader annual meeting held in Beijing on Jan. 27. The time has come for the real estate industry to go global and this is also a need of the Belt and Road initiative, Wei said.
Following the establishment of Shenzhen Special Economic Zone in China's southeastern Guangdong province in 1980, the brainchild of late Chinese leader Deng Xiaoping -- the architect of modern China -- and China's accession to the World Trade Organization, the Belt and Road has become the third segment of China's reform and opening. In the first two phases, China sought to entice foreign capital, equipment, technology and talent. In this cycle, however, China is promoting its own capital, equipment, standards and management to the outside world, not merely in the fields of economy and trade, but in almost every arena, including culture, science and technology, tourism, agriculture and infrastructure. After 30 years' reform and opening, China has cultivated many of its own entrepreneurial teams and is now replete with a variety of its own products. Domestic enterprises today require a strategy, especially a global one. The needs of the times thus dictate that China's real estate sector must foray abroad, Wei said.
Going global for the real estate industry is also a need of the Belt and Road initiative, he said. Wei, who spent 20 years in Africa, has presided over the Forum on China-Africa Cooperation and the China-CELAC Forum. His own personal experience is thus the proof of the pudding.
To cite examples, China erected 12,000 housing units in one African country, and the locals were very grateful because they had lived in primitive dwellings for generations, he said. Some 90,000 workers in Cambodia now live in homes Chinese developers built, and the country's private entrepreneurs likewise constructed affordable housing for military personnel in Ghana.
For the realty sector to venture overseas is also thus a need of foreign governments, as senior Nigerian government officials told Wei, because the country's greatest need is housing. The old capital of Lagos lacks space for further development and housing demand in the new capital Abuja is also insatiable, and so the authorities hope Chinese will help develop housing there. Venezuela and Kenya also desire similar construction. Many other Asian, African and Latin America nations also need Chinese real estate firms to erect housing.
"Africa now has 1.4 billion people and the populations of Indonesia and Latin America are also rising dramatically. Some 93 port cities in 65 countries along the Belt and Road urgently cry out for Chinese development," he said.
When domestic realty companies go overseas, they should refrain from fierce competition among themselves and must also have the correct information to avert risks, he said. "These countries are not home. We must build a world community of destiny by taking cautious steps."