X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SANTA BARBARA, CA & SHENZHEN, CHINA-With a Q3 economic growth rate of 8.9% and an even stronger industrial growth rate, China appears to be surging far ahead of the pack in emerging from the global recession. At a late October conference in this California city on Asia and the Global Financial Crisis, Federal Reserve chairman Ben Bernanke commented that Asia in general and China in particular appear to be leading the global recovery, with recent data indicating a strong rebound is well under way in the region.

But analysts warn that the spurt may be short-lived unless North America and Europe significantly raise their level of imports from the Asian giant. According to official government figures, China’s exports were down 15.2% in September from a year earlier. The good news in this is that forecasters had anticipated a 21% drop.

Nonetheless, the year-over-year decline represented bad news for US and European investors, who in recent years had poured a lot of capital into building large distribution centers, the majority of which served primarily as way stations for Chinese manufactured goods that were wending their way to overseas markets. Though more recent construction had included a sizable number of buildings aimed at meeting China’s internal distribution needs, the global economic downturn ate into tenancy at domestic distribution centers as well.

Last December, ProLogis, was forced to sell its China developments at a substantial loss to GIC Real Estate, the property investment arm of the Government of Singapore Investment Corp. Though the Denver-based REIT vowed to invest another $1 billion in China’s first- and second-tier cities over this year and next, so far it has made no moves to do so.

Properties serving China’s domestic market have performed better than those serving export needs, according to Jing Ulrich, chairman and managing director of China equities for JPMorgan. She believes the domestic distribution and manufacturing segment will lead the nation’s way out of the recession. “We think exports will eventually stage a rebound, but China’s growth in the near term will be led by domestic economic consumption,” she said at a recent conference in Shenzhen.

Ulrich bases her view on the fact that the country’s electric power generation grew 9.3% in September on a year-over-year basis. JPMorgan had forecast it would not make that type of gain for at least two more months, indicating that China’s economic growth is accelerating at a faster pace than expected. “This suggests industrial activity is firmly on a recovery path in China,” Ulrich concluded.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.