G20 to benefit Hangzhou e-commerce

By Wang Jiamei Source:Global Times Published: 2016/9/7 23:38:39

Surge in city’s real estate prices could hurt Internet economy: expert

Hosting the Group of 20 (G20) summit has brought global attention to Hangzhou, capital of East China's Zhejiang Province, which is expected to see long-term benefits in sectors such as real estate, tourism and e-commerce, experts said on Wednesday.

With the city home to China's largest e-commerce companies, the Hangzhou summit was a huge platform for China to present its Internet economy to the world, Ye Hang, a professor at the College of Economics of Zhejiang University, told the Global Times on Wednesday, adding that even the G20 leaders' communique included an e-commerce-related initiative.

"We welcome the Business 20's (B20) interest in strengthening digital trade and an Electronic World Trade Platform (eWTP)," the communique wrote.

The B20 policy recommendations to the G20 include a proposal to establish the eWTP as an open, transparent and not-for-profit platform. The proposal was originally led by Alibaba founder and chair of one of the B20 taskforces Jack Ma Yun.

China economist at the Economist Intelligence Unit Su Yue said the G20 summit may have succeeded in highlighting what the city can offer in the information technology industry, such as in the Internet-plus and e-commerce sectors. This could help attract foreign investment, although there may be some wariness over the space for other companies, given Alibaba's domestic dominance.

"It's a big advertisement, and the world has been aware of Hangzhou's innovation and Internet sectors which will motivate them to go global in the future," Ye said. "Other than that, the summit has certainly improved the city's image, thus tourism and conferences will benefit from it."

"The city's infrastructure has also been revamped to prepare for the G20, which could help lift local real estate prices.  The home price-to-income ratio is still low compared with Beijing and Shanghai, pointing to room for price expansion," Su told the Global Times on Wednesday.

A Shanghai-based securities analyst surnamed Li echoed Su's views, noting that even before the summit, shares of some relevant companies had already received a boost.

For instance, share price of Shenzhen-listed Hangzhou Binjiang Real Estate Group jumped 10.89 percent in August, outperforming the benchmark Shanghai Composite Index, which gained 3.56 percent during the same period.

But Ye said it remains to be seen whether Hangzhou home prices will soar to the level of Shanghai and Beijing.

"I personally don't want to see property prices surge, which will have a negative impact on the growth of the local Internet economy," Ye noted.

As to whether Hangzhou will become China's new first-tier city, Ye said the G20 summit may not have much to do with this because the city is already at the forefront of China's economic development in terms of innovation and transformation, with its GDP growth reaching 10.8 percent during the first half of the year, ranking first among the country's major cities.

"Hangzhou is a candidate as a future first-tier city, given its strong human resources, relatively good business environment and high value-added industries," Su noted. "On the other hand, Hangzhou's GDP is still far below other first-tier cities.  It faces competition from other prefectures in the Yangtze River Delta, such as Suzhou, in terms of capital and human resources."

Posted in: Economy

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