Shanghai, October 15, 2021 — Cushman & Wakefield, a leading global real estate services firm, recently released its report titled The Finance Sector – Reforms and fintech to propel sector demand for leased office space in China.
According to People’s Bank of China data, at the end of Q1 2021, financial sector institutions in China had total assets of RMB 364.62 trillion (or US$ 54.69 trillion), an annual rise of 9.5%, and total liabilities of RMB 331.60 trillion, a yearly rise of 9.6%.
Towards the end of 2019, the State Council of China circulated the ‘Opinions on Further Improving the Utilisation of Foreign Investment’ (Guo Fa 2019 No. 23). One of the main goals of this document is to promote the further development of the financial sector in China. Additionally, with the establishment of the Beijing Stock Exchange, performing SMEs are expected to benefit, while during the next five years, the 14th Five-Year Plan (FYP) will look towards:
- The further internationalisation of the renminbi (RMB);
- The further development of the capital markets;
- The further firming of financial market regulatory standards, and;
- A continued relaxation of the capital account.
According to Penser, with an average value of US$ 26.8 billion, mainland China is now home to eight of the world’s leading fintech unicorns. That is roughly eight times the size of the average value of fintech unicorns in North America.
During the height of the COVID-19 outbreak period in China during the early part of last year, an increased usage of online financial services was witnessed. Firstly, online banking and wealth management services saw a surge in activity. Secondly, online insurance brokerage business activity also witnessed an increase, and, thirdly, more people shopped online from home during the lockdown period.
When considering the financial sector and cities in China, after many years of development and maturity, some cities in the country now offer financial sector services that are world leading. When considering fintech, China achieved remarkable results, with five cities in the top 25 fintech cities group globally as recognised in the Global Financial Centres Index report.
Looking at demand for Grade A office space in China’s four major financial centres of Shanghai, Beijing, Shenzhen and Guangzhou, we can see that between Q2 2020 and Q2 2021 financial sector office leasing activity was robust for all cities.
Jonathan Wei, Head of Project and Occupier Services, China, said, “Cushman & Wakefield has offered financial institutions comprehensive real estate services for years. The recent recovery of global economy, recent reforms and establishment of Beijing Stock Exchange shall further boost business opportunities in finance sector. Cushman & Wakefield will continue delivering the best service to financial institutions in the future.”
Shaun Brodie, Head of Occupier Research, Greater China, said, “given the size of the financial sector in China, the recent and future sector reforms, the outlook for fintech and the impact of the COVID-19 outbreak, the financial sector is poised for continued industry growth in China and this growth will translate well for the commercial Grade A office property market in many of China’s major cities.”
Download the report.