Nation steady as she grows

PUBLISHED : Friday, 01 October, 2010, 12:00am
UPDATED : Friday, 01 October, 2010, 12:00am

China's economic might continues to astound the world. It safely navigated though the dark days of the global meltdown to emerge as the world's second-largest economy, behind the United States.

The country's GDP was US$4.99 trillion last year, and its purchasing power parity was US$8.77 trillion. Its economy continues to expand, notching up an average growth rate of 10 per cent for the past three decades. And China is also the world's second-largest trading nation, its largest exporter, and the second-largest importer.

It now has a new and financially powerful middle class, who are making their presence felt throughout the country.

It was a major sign of China's progress that an international forum on urban competitiveness was staged in Nanjing earlier this year. A worldwide survey of major cities, looking at criteria such as carbon emissions, economic output, the number of patent applications held, and many other factors, put Shanghai in the top 40 of 500 cities for the first time. Other major metropolises, such as Beijing and Shenzhen, just missed the top 40. And cities that had previously received little attention, such as Erdos, Hohhot, Quanzhou and Xuzhou, climbed up the rankings significantly.

Indicators are particularly favourable in the hotel sector thanks to the emerging middle classes who now have more disposable income.

'We have seen business grow by 40 per cent on the mainland compared with the first half of 2009,' says Sarah Chen Yen-ching, vice-president of sales and marketing for Shangri-La Hotels and Resorts.

'According to government tourism statistics, growth is up by as much as 39 per cent in some secondary cities, so this is very much a key driver for our hotels' revenue.'

Shangri-La, which has built many properties in major mainland cities, recently opened in Wenzhou and Ningbo, and is overseeing the construction of properties in Diqing, Haikou, Lhasa, Shenyang and Tangshan. It also plans to launch a new brand of lifestyle business hotel in Shanghai next year.

'We are looking at 20 to 30 new hotels in the next three or four years,' Chen says. 'Our main clientele is either the business sector or government officials, plus of course Mice [meetings, incentives, conventions and exhibitions] clients and participants.

'The new wealthy in China are looking for comfort - somewhere that is both familiar and luxurious.'

Recent years have seen other big players in the hotel industry opening on the mainland. The most notable new arrivals are concentrated in Shanghai, where The Peninsula opened on the Bund in a new building; Fairmont restored the venerable Peace Hotel; and PuLi - which bills itself as an 'urban resort' - broke new ground in Jingan district.

International tourism is regarded as the next big thing by many in the industry.

Melvyn Yap, regional director at Silversea cruise lines, has been following the market closely.

'The Chinese market is growing in wealth. However, we have not seen massive volumes of Chinese travellers jumping into the luxury travel segment yet,' he says.

'We see the Chinese going after property, cars, watches and designer products. Travel is an intangible experience and very difficult to show off, hence those emerging classes will still take the 12-day, 14-country Europe coach tour, take loads of pictures and buy souvenirs to show off.

'When they discover that their neighbours and friends are doing exactly the same thing, they will start to explore exclusive getaways.'

While the nation's economy continues to build momentum, its sporting prowess is also admired and its athletes are planning to increase the gold medal count in the 2012 London Olympics.

That's only two years away and, in the meantime, China continues to rack up its own gold reserves - and quite a lot of other assets as well.