The local economies of the mainland's 50 major cities are growing at a rapid pace and will account for 12 per cent of global economic growth over the next decade, according to property consultant Jones Lang LaSalle.
'By 2020 the 'China50' is expected to be an economy of US$6.7 trillion (from the current US$2.9 trillion) - larger than today's Japan,' JLL said in its research report 'China50: Fifty Real Estate Markets that Matter'.
The report assesses how recent and future changes to the country's economic and policy landscape are impacting the dynamics of real estate markets across 50 of its most important secondary and tertiary cities. It finds that they offer substantial commercial real estate opportunities, said Michael Klibaner, JLL head of research for China.
'The pace of commercial real estate activity is remarkable. Over 80 million square metres of retail and nearly 30 million sq m of grade A offices will be built in the China50 cities over the next decade as they grow and modernise,' noted the report.
Among the cities highlighted in the report are the impressive growth rates of Chengdu, Chongqing, Dalian, Hangzhou, Nanjing, Shenyang, Suzhou, Tianjin and Wuhan.
The 10 fastest-growing large cities in the world (by GDP) are all in the China50, and Chongqing is the planet's fastest-growing large city, according to JLL. Klibaner said he believed that recent changes in political leadership on the mainland will have only a limited impact on major projects in Chongqing as they had the backing and sponsorship of the central government.
Bo Xilai, who took over as Chongqing party secretary in late 2007, was removed from office last week.
In terms of development sectors, Klibaner said there was huge growth potential in the China50 cities' retail property market, supported by a growing middle income group.
Citing manufacturing costs that were higher than nearby Asian countries such as Indonesia, Klibaner said that for JLL clients, China was not an export but a domestic market. Retailers went to second- and third-tier cities because of growing domestic markets, and a number of fast-fashion retailers had opened for business in second-tier cities in the past 18 months.