By Lucinda Shen and Linette Lopez| Original Source
Wang Jianlin, chairman of Chinese property developer Dalian Wanda Group, sits in a meeting room as he arrives for the launch ceremony for the Qingdao Oriental Movie Metropolis on the outskirts of Qingdao, Shandong province September 22, 2013. REUTERS/Jason Lee (CHINA – Tags: BUSINESS ENTERTAINMENT REAL ESTATE) – RTX13U9F
China’s richest man thinks Beijing needs to cut its growth forecast and deal with it.
Real estate mogul Wang Jianlin told Sandy Li at the South China Morning Post that the country needs to accept lower growth and transform the economy.
“China needs to drop the fantasy of keeping a high growth rate of 7% or 8% and just accept 6%, 7%, or even 5% percent,” he said. “China’s economy needs to transform from relying on investment and exports to consumption. That’s a painful process. If the transformation doesn’t happen now, it would be even more painful in the future.”
Wang, founder of conglomerate Dalian Wanda, is worth an estimated $35.1 billion.
In July, his company announced that it would close 40 department stores in the country — that’s almost half of the 99 it owns. It also announced that it would close 80 karaoke dens.
Consider that a big reversal. The company has 100 malls across China, and in March it announced plans to build 800 more by 2020.
Based on the drawdown announced in July, though, it’s unclear if this kind of expansion is still in the cards for Dalian Wanda. Wang clearly sees something coming.
The Chinese government posted second-quarter gross domestic product growth in July that beat forecasts at 7.0%, though many analysts expressed reservations with the numbers.
Chinese markets have experienced a wild ride since then, with the Shanghai composite tanking and the country’s government embarking on a devaluation of the yuan.
The country’s employment market has shown strains, international investors have fled from the country, and the Chinese establishment has started investigating high-profile figures in the media and finance communities.
Wang’s son, Wang Sicong, appeared recently in a BBC documentary, commenting on how the Chinese government controls all aspects of it’s youths’ lives and culture — and how deviance from the government norm would be “suicide.”
Read the South China Morning Post article here.
‘Drop the fantasy’: China’s richest man Wang Jianlin says Beijing must give up high growth rate plan
Wanda head, China’s richest man, tells government to avoid future pain by ending growth ‘fantasy’
By Sandy Li and Reuters, email@example.com
China’s richest man Wang Jianlin said the government needs to give up the “fantasy” of maintaining high economic growth rates, as his real estate flagship listed in Hong Kong announced moves to list on the mainland as well.
“China’s economy needs to transform from relying on investment and exports to consumption. That’s a painful process. If the transformation doesn’t happen now, it would be even more painful in the future,” Wang said.
From left, Wanda Commercial board secretary Winston Wang, group vice-president and chief financial officer Geffrey Liu, director and president Qi Jie, director and executive president Qu Dejun and Wanda Commercial chief financial officer Liu Xiaobin prepare to announce the company’s interim result at J W Marriott in Admiralty. 27AUG15. Photo: Edmond So
“China needs to drop the fantasy of keeping a high growth rate of 7 or 8 per cent and just accept 6, 7 or even 5 per cent.”
Wang’s Wanda Commercial Properties, the world’s second-largest commercial property owner and operator, yesterday said it will submit an application to the China Securities Regulatory Commission to list A shares in the domestic market early next month.
The plan comes eight months after the firm listed on the Hong Kong stock exchange in December.
The initial public offering raised about HK$28.8 billion in the biggest listing in the city last year.
The company’s shares jumped 7.99 per cent to close at HK$48 yesterday, at par with its debut price.
Wanda Commercial, which owns 112 shopping malls and 64 hotels in China, announced the proposed flotation plan to raise about 12 billion yuan in an exchange filing last month.
“The A-share listing plan aims to broaden the funding channel and general working capital,” said Wanda Group vice-president and chief financial officer Geffrey Liu Chaohui. “Lots of our fans in the mainland hope to see us list in the domestic market.”
The listing, which has not yet been finalised in Shenzhen or Shanghai, secured approval from Wanda’s shareholders on August 18, he said. The final timetable depends on when the CSRC allows offerings to resume.
The firm needs capital to finance its rapid expansion, with plans to add 22 malls and 10 hotels by the end of this year, it said.
Wanda Commercial reported core profit, excluding a 3.9 billion yuan revaluation gains on investment properties, jumped 116.65 per cent to 2.26 billion yuan for the first six months of the year.
Turnover was up 32.87 per cent to 30.89 billion yuan, with 67.91 per cent from property sales, 20.52 per cent from property leasing and 6.02 per cent from hotel operations.
The company said devaluation of the yuan has not affected the sale of its luxury residential project in London. It has pulled in 3.8 billion yuan, or 42 per cent of the projected nine billion yuan pre-sale revenue from the project, since it launched in November.
“The weakening yuan in fact has encouraged more mainland buyers to sign on to the deal,” Liu said, adding that mainland buyers accounted for 20 per cent of customers, while the rest were from Europe or local residents.
The company’s parent, Dalian Wanda Group on Thursday announced it has reached an agreement to acquire 100 per cent of World Triathlon Corp for US$650 million, which will help it to become the largest sports operating company in the world.