SHANGHAI: Wu Zheng loves the waves and the beaches in Hawaii. He loves the moderate temperatures and its short, relatively speaking, nine-hour flying distance from his home in Shanghai.
But most of all, he loves the 4.5 square kilometres of land his company hopes to help transform into The Villages of ‘Aina Le’a, a new development on the northwestern shore of the Big Island.
The ambitious plans call for shopping, schools, golf and some 2,300 homes, the first of which are already under construction.
For Mr. Wu, the chairman of Shanghai Zhongyou Real Estate Group, the investment in Hawaii is more than buying a chunk of paradise. It’s a step toward bigger foreign markets for a Chinese firm looking to expand away from a country with a slowing economy and shaky property markets.
“Hawaii is a bridge between China and the American continent,” Mr. Wu said in an interview.
“We will soon visit New York for meetings to look at other projects. We also want to look at London.”
China has long been among the most buoyant places on earth to build virtually anything, with a decades-long urbanization project that has planted vast new forests of condominium and office towers.
But a slowing economy has taken a heavy toll on the country’s real estate sector. Housing starts are tumbling at a double-digit rate amid indications that the long-standing property boom is careering. Land sales and land values are all falling fast. (Although home sales were up sharply in August, the sudden gain followed months of declining prices.)
What’s happening with property developers offers a window into the global reverberations of China’s economic slowdown, whose consequences are likely to extend far beyond sinking domestic exports and stock markets. As opportunities shrink at home, a broad new suite of Chinese firms suddenly has a new reason to go elsewhere, armed with expertise and capital accrued over the past years of breakneck growth.
“The high-speed growth of China’s real estate industry has ended,” said OuYang Jie, executive vice-president of Future Land Development Holdings, one of China’s top 20 developers, which this year is expected to sell more than $6-billion in property. In the future, “we will have to fight for our meals in other people’s bowls.”
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