Learning to live with Asia's expanding cities

Learning to live with Asia's expanding cities
Ursula Schaefer-Preuss / Special to The Daily Yomiuri

Every day, Asia's cities expand by about 120,000 people, a level of urbanization unprecedented in human history. For many, this conjures up visions of an apocalyptic urban nightmare in which Asia's population will increasingly inhabit a twilight world of teeming, filthy, polluted streets.

However, the reality could be a whole lot rosier, for both Asia's urban poor and the environment.

Many of today's Asian cities already have populations exceeding those of some medium sized countries and are 10 times larger than cities in Europe at comparable levels of development. By 2015, half of the world's 22 megacities of more than 10 million people will be in Asia.

In addition, the region is home to vast, growing "mega regions," such as that stretching from Tokyo to Osaka, Kyoto, Kobe and Nagoya that will by 2015 accommodate about 60 million people. The Hong Kong-Guangzhou-Shenzhen region will by the same year be home to double that number.

Over the next 20 years, Asia's cities will be expected to accommodate at least 1.2 billion more people. The new urban dwellers are already on the way from the farm or have been born in the cities. There is nothing that can be done to stop this urbanization process, since this generation will need jobs and services. They won't find these in the countryside.

In many ways, these urban pressures in Asia are comparable to those faced in developed countries around the last decade of the 19th century. The influx then to the cities culminated in a situation now in which most of the urban areas of the developed world contain more than 90 percent of the population.

Back in the 1890s, the life expectancy for a male worker in a city like Manchester, England, was a mere 19. At least with all our present-day medical advances, the average male life expectancy today in a country like Bangladesh is three times more.

Likewise, Charleston, S.C., in the same era saw 323 children dying within a year of birth per 1,000 live births. Even in Asia's worst slums, the average infant mortality is now one-third of this rate.

Yes, the cities then were difficult places. But just as they do now, they also offered a wealth of opportunities.

Given a choice between stagnant rural poverty and promising city squalor, history has shown that people will always choose the latter.

If you live in an urban slum in Asia you can still go to the air-conditioned mall. And there is a health clinic on the next block, even if it is a pale shadow of the facilities available to the rich.

However, new systems are needed to assimilate the large influxes of people projected. Basic needs such as water, sanitation and housing are already stretched, with the poor usually the first to lose out.

Investing in required infrastructure is not just a matter of money, something that many Asian economies have a lot of. It is a matter of getting a consensus on how projects should be implemented and who should pay for them.

There is no easy solution to these problems, as there has been insufficient time for management systems to evolve gradually, as they did in Western Europe and North America. And large migrant concentrations can, and do, become ghettoized, as was particularly seen with immigrant societies of North America and Europe. The crucial need in such circumstances is to ensure that there is a way out of this environment. If not, social tensions will build and grievances fester. Even in developed countries this is a major challenge.

So, while the reality is far from doom and gloom, symptoms of stress abound in Asia. Therefore, the region needs help in managing its cities. And it is in everyone's interest, including the developed world, that they get this help quickly.

Asia, particularly China and India, will contribute more than half of the rise in the globe's greenhouse gases over the next 20 years. Most of this contribution will come from urban development, either directly or indirectly. If global warming is to be fought, the main battleground will, therefore, be Asia's cities.

They must become less car-oriented, denser (because densities are falling rapidly), use less energy and branch out into using different types of energy. This in turn requires the provision of new types of infrastructure at an unprecedented rate.

Asia's megacities can give billions of poor people access to a standard of living the average person in industrialized countries only gained in the last decades of the 20th century.

The challenges ahead are not beyond our wit and capacity to solve. But they will require genuine partnerships taking in cities and national governments as well as richer and emerging economies.


Schaefer-Preuss is vice president of the Manila-based Asian Development Bank, which is holding its 40th Annual Meeting in Kyoto later this week.

(May. 2, 2007)

Singapore developer to double China spend

sgSingapore developer to double China spend

GUOCOLAND Ltd, a Singapore-based developer controlled by Malaysian billionaire Quek Leng Chan, may double its investment in China this year to US$5.4 billion to tap growing demand for new homes.

Unit GuocoLand China Ltd is in talks that which may be completed in as soon as six months about several projects in Tianjin, Beijing and Shanghai, Violet Lee, managing director of GuocoLand China, said in Beijing on Friday.

Singapore developers including CapitaLand Ltd have expanded in China as construction increases amid rapid growth in the nation's urban population. China posted economic growth of 10.7 percent last year.

"I'm not building enough to meet China's demand," Lee said. "With this rate of urbanization, there'll always be this continuous demand for housing."

Guocoland China also plans to expand into the management of properties and real estate investment trusts by 2010, Lee said. The company has two million square meters of property reserves in China, she said.

"The market is just enormous," Lee said. "The appetite is there, the need is there."

Parent GuocoLand agreed to purchase a 90 percent stake in Beijing Cheng Jian Dong Hua Real Estate Development Co for 5.8 billion yuan (US$750 million), the company said in a statement to the Singapore stock exchange on Friday.

Beijing Cheng Jian owns the development and land use rights to the Dongzhimen site, a 106,000 square meter parcel in central Beijing, the statement said. The property will be developed into a retail, hotel, office and residential complex with up to 600,000 square meters, Bloomberg News reported.

SINGAPORE CapitaLand said it plans to invest 3.37 billion yuan, or $407 million, in 15 malls in China that will be anchored by Wal-Mart Stores

SINGAPORE CapitaLand said it plans to invest 3.37 billion yuan, or $407 million, in 15 malls in China that will be anchored by Wal-Mart Stores, the world's biggest retailer.

Singapore-based CapitaLand, the biggest Southeast Asian developer, said Friday that it will hold a 65 percent interest in the malls, while Shenzhen International Trust & Investment will own the remainder. Shenzhen International, controlled by the Chinese government, is CapitaLand's partner in six other Chinese malls anchored by Wal-Mart.

The purchase will help CapitaLand, which set up two of Singapore's five property trusts, increase its assets as it prepares to sell shares in a fund that owns retail property in China. CapitaLand's investment in malls with Wal- Mart stores may increase its rental income as competition mounts in China's $600 billion retail market.

"CapitaLand is building up its war chest in China," said Chris Reilly, a fund manager at Henderson Global Investors in Singapore. "If you want to package a China fund, you need to bring in some components that the international investing community is familiar with, such as CapitaLand, to take a couple of the risk factors out."

CapitaLand and Shenzhen International's 21 properties in China will be valued at 1.3 billion Singapore dollars, or $764 million, and be spread across the country, CapitaLand said Friday. The malls will be opened by the end of 2006 and are expected to have a yield of 8 percent to 9 percent, the company said. The yield, similar to that of other CapitaLand malls in China, measures the annual rental income as a percentage of asset value.

The malls will form part of a property trust of Chinese assets valued at 500 million to 1 billion Singapore dollars in which CapitaLand is planning to sell shares by 2006, the company's chief executive, Liew Mun Leong, said.

"This is an ideal opportunity for us to create a retail property fund," Liew said in a statement Friday. "We have confidence China's retail market will have astronomical growth."

CapitaLand said the agreement also gives it the right to take part in a commercial project being developed in Shenzhen, China, neighboring Hong Kong, which will house Wal-Mart's Asian head office and a Sam's Club store, a warehouse-style retail chain owned by Wal-Mart.

The Singapore developer will also have the right to invest in 17 other malls anchored by Wal-Mart, as well as other retail projects for the U.S. company that Shenzhen International embarks on until the end of 2010, CapitaLand said.

"With this partnership, CapitaLand has a head start in the fast-growing China retail property market, especially with the unique opportunity to penetrate the relatively untapped provincial cities," Liew said. "These 21 malls are expected to generate attractive returns."

Shenzhen International's chairman, Li Nan Feng, said he expects the joint venture to become China's biggest commercial property developer in three to five years.