Chinese cities dominate the rankings in JLL’s City Momentum Index 2019
The Index reveals where in the world to find the highest levels of socioeconomic and commercial real estate dynamism.
China is home to 9 of the top 20 cities in the world today, enabling Asia Pacific to take a total of 19 seats in all, highlighting the continuing shift of fast urban growth from the West to the East, according to the sixth City Momentum Index (CMI) published by JLL (NYSE:JLL).
The absence of European and American cities in the index demonstrates a marked East-West growth divide, thereby reflecting Asia’s continued rapid urbanisation and economic growth driven by globalisation, innovation and demographic factors.
JLL’s CMI ranks 131 major established and emerging markets across the globe by tracking a range of socioeconomic and commercial real estate indicators over a three-year period to identify the world’s 20 most dynamic cities—markets that are undergoing the most rapid change.
Jeremy Kelly, Director of Global Research at JLL, says: “Asia continues to show strong momentum, with cities that are successfully expanding their innovation economy punching above their weight in terms of attracting capital, companies and people.”
“It’s clear that the technology and innovation sector is a key driver of both real estate and economic momentum–driven by large technology firms as well as dynamic start-ups in cities such as Bengaluru, Hyderabad, Ho Chi Minh City and Shenzhen.”
Chinese cities fast-track toward maturity
China continues to be home to many of the world’s most dynamic cities, with its nine major ones—Xi’an (9th), Guangzhou (10th), Nanjing (11th), Beijing (13th), Shanghai (14th), Chongqing (16th), Hangzhou (17th), Shenzhen (19th) and Chengdu (20th)—featuring in this year’s CMI Top 20.
“Chinese cities are evolving of truly global scale, where momentum is more dependent on levels of innovation, entrepreneurship and liveability. They are home to a new breed of energetic tech-savvy firms that are extending their global footprints, facilitated by the ‘Belt and Road Initiative’,” says Kelly.
Of the 9 cities cited in the CMI, Xi’an has emerged at the top spot nationally (ninth globally) for the first time. Located at the core position of the Silk Road economic belt, Xi’an plays an important role in connecting the Asia-Pacific Economic Circle and the European Economic Circle. The city strives to become a ‘western’ global city and an international metropolis.
Guangzhou (in 10th position globally) fares well on several socioeconomic measures, and has a stronger real estate momentum than its national peers. Having lost some ground in the recent years to neighbouring Shenzhen, the city is regaining momentum as it prioritises R&D, biotechnology and IT, as well as financial services and advanced manufacturing. Guangzhou is geographically well placed to benefit from agglomeration benefits of the Greater Bay Area.
Pave the way for sustainable momentum
While strong growth brings opportunities for economic and social development, it also brings challenges that cities must address to ensure short-term growth transitions into long-term momentum. Investing in infrastructure and increased transparency is essential to facilitate this transition.
Kelly adds: “These cities need to address the environmental and social impacts of rapid growth such as social inequality, congestion and environmental degradation. The provision of smart, efficient and productive real estate and increased transparency are key factors in driving long-term, sustainable growth.”
Investment in transformative real estate drives sustainable growth
Thoughtful and innovative development—such as regeneration projects that nurture new businesses, improve lives, and have a long-term vision—is essential, as are large-scale infrastructure projects that help combat problems around congestion and improve accessibility, according to Kelly.
Smart infrastructure and sustainable technology create liveable cities
Technological innovation, in the form of greener and smarter buildings, also plays an important role in answering the environmental challenges brought about by the rapid growth. Xi’an has installed an innovative 100-metre-tall air-purifying tower to reduce smog and improve air quality.
Foreign direct investment (FDI) is crucial for long-term momentum
Long-term FDI and transparent governance often support sustainable, long-term momentum and a maturing economy.
Indeed, China’s fastest growing cities have been successful over recent years, attracting high levels of FDI. Results of JLL’s latest Global Real Estate Transparency Survey show that most Chinese cities— particularly, Beijing and Shanghai, both of which are on the cusp of joining the ranks of the world’s transparent real estate markets—have increased transparency.
“For a city to successfully transition from short-term momentum to long-term growth it must plan for a sustainable and inclusive future,” concludes Kelly.
For more information, download the City Momentum Index here: https://www.joneslanglasalle.com.cn/en/trends-and-insights/research/city-momentum-index-2019