China’s "Two Sessions" for 2020 were postponed for more than two months due to the COVID-19 pandemic. The meeting finally commenced on May 22. The government work report, delivered by Premier Li Keqiang, reviewed China’s social-economic development in 2019 and set economic development goals for 2020.
Compared to prior years, the report pays only moderate attention to the real estate market. Nevertheless, in terms of the country’s economic, industrial and regional planning for the coming year, we anticipate that the statements in the report will still have a significant impact on China’s real estate market. In this update we interpret the report’s key messages and the implications for China’s real estate market, with excerpts from the full text of Premier Li’s speech.
Despite the impact of the unprecedented confluence of events that have led the central government to abstain from setting a specific target for economic growth this year, we believe that plentiful signs of positivity remain for the healthy development of China’s real estate markets in the future.
The retail property market will benefit greatly from concerted recovery efforts to boost consumer spending, backed by a pedestrian infrastructure program designed to help get people back shopping. The logistics sector can expect a boost from the knock-on effects of the retail recovery. Office and data center markets are set to ride the wave of renewed promotion of the digital economy, and all commercial real estate sectors will gain from uninterrupted urbanization and the emergence of city clusters. And finally, the residential market continues to be underpinned by an anti-speculative ideology and bolstered by a capability for government market intervention in the name of stability.
