China Resources Land plans more shopping centers in northeast to tap growing demand

China Resources Land Ltd, a business unit of centrally administered State-owned conglomerate China Resources Group, is planning to run more than a dozen mega integrated shopping complexes in the country's northeastern region by the end of the 14th Five-Year Plan period (2021-25), a senior executive said.

The plan was triggered by the fast growing consumption power in the area, especially among millennials (those born in the 1980s and 1990s). Leveraging the advantages of "first-store economy", one-hour high-speed train journeys between major cities and its surrounding towns, as well as the nation's demand for building smart and green cities while preserving their unique features and history, the company mulled the steps to tap the sector, said Wang Yong, general manager for the northeastern region of CR Land Ltd.

The company to date operates six commercial property projects of CR Land Ltd in cities including Shenyang, Dalian and Anshan in Liaoning province, and Harbin in Heilongjiang province.

It is building six more projects in the northeastern and northern cities such as Changchun, Jilin province and Hohhot, the Inner Mongolia autonomous region. All will be put into operation by the end of 2025.

Based on the existing residential and commercial project development business, Wang said CR Land Ltd will actively respond to the government's call to participate in urban construction through an integrated development model in a large area of land, forming a diversified urban growth model with factors including infrastructure improvement, industrial upgrading and the renewal of historical buildings to achieve high-quality growth.

"In the meantime, these businesses will also promote the development of smart cities with distinctive characteristics such as green cities, help shape a high-quality and efficient urban operation model, and enhance the economic value of the projects and their surrounding areas," he added.

The northeastern region of CR Land Ltd is conducting road reconstruction in Shenyang's Huanggu district, after building parks, and completing street, factory and civil building reconstruction projects over the past several years.

Since the government set the target of basically achieving a new type of urbanization by the end of 2025 and taking a leading role in smart city development, supported by smart governance, green environment and digital technologies earlier this year, Wang stressed the new type of urbanization is not simply demolishing and rebuilding buildings. It is the measures and technical solutions to stimulate the areas' growth potential and highlight their cultural background within cities, or even in the world.

For instance, the company transformed the erstwhile Shenhai power station－once a plant providing power to millions of residents in Shenyang's Dadong district－into a large community, namely the City of the Time, with residential, commercial, educational, cultural and ecological functions and other supporting services.

With more than 60,000 square meters of park areas, the community formed by the commercial blocks and historical building has become a vibrant community and business place within the city.

Wang said that together with China Resources' assets and engineering experience, this business segment will significantly contribute to smart city development in China's northeastern region. The company is keen to further transform its role as an urban investment and development operator during the new five-year development route.

The regional branch of CR Land Ltd saw its total volume of retail sales exceeding 30 billion yuan ($4.64 billion) in the group's commercial projects in the northeastern region over the previous Five-year Plan period (2016-20).

Over the long term, Wang said the GDP growth potential of the four core cities in the northeastern region, including Shenyang and Changchun, are expected to reach 800 billion yuan on an annual basis in the coming years. Wang added the flow of population, consumption upgrading and the flexible business environment will push the company to deploy more resources in this lucrative market to support the economic growth of the northeast.

"Major cities such as Shenyang, Dalian and Changchun are ideal places to develop retail and commercial businesses because they are supported by well-laid high-speed railway networks. There are several key cities connected to the city by one-hour high-speed train service. The stores owned by global brands in Shenyang certainly can also serve consumers living in surrounding cities," he said.

With consumption already becoming a major engine for China's economic growth in recent years, efforts to boost domestic spending will be further intensified this year to upgrade the area of consumption for high-end products, create jobs and new business patterns, as well as expand foreign trade, said Wang Bin, deputy director-general of the department of market operations and consumption promotion at the Ministry of Commerce.

"The government will strive to improve the purchasing power of consumers, improve the consumption environment and create more consumption growth points in both urban and rural areas," he said.

Thanks to recovery in the consumer market, total retail sales of consumer goods hit 21.19 trillion yuan in China in the first half, up 23 percent year-on-year, the National Bureau of Statistics said.