‘Multilateral Co-operation is Key to Building Sustainable Infrastructure and Successful Cities in Times of Global Uncertainty’: Dr Zhu Min, Former IMF Deputy Managing Director

HONG KONG--()--The 2017 World Built Environment Forum Annual Summit launched its second annual event today in Shanghai at the Pudong Shangri-La Hotel, bringing together leading experts from within and outside the industry to discuss the geopolitical, social and industry trends that will have the greatest impact on the built environment in China, Asia and the world.

In the Summit Address, Dr. Zhu Min, former Deputy Managing Director of the International Monetary Fund (IMF) and President of the National Institute of Financial Research at Tsinghua University highlighted the rise of populism and the ambiguities of “Trumpnomics” as important factors contributing to global economic uncertainty. With multilateral organisations facing populist criticism, Dr. Zhu called for greater co-operation and responsible investment and emphasised, “The risks of a strong US dollar should not be underestimated.”

Speaking to over 700 international leading figures from across built environment professions, Dr. Zhu issued a stark warning about the levels of corporate debt in Asia. While corporations in the developed markets had been deleveraging, in emerging markets a combination of increased debt levels and low revenue generation raised the prospect of a financial crisis. Dr. Zhu pointed to a “permanent loss of 12% of GDP growth” globally since 2008. Nonetheless, global growth in the last three years had been stronger than expected. Dr. Zhu described a “new normal” characterised by low growth, low inflation, low productivity, low oil prices and low interest rates concluding that “We are at the beginning of a new economic era.”

Dr. Zhu concluded that low growth appeared to be a structural phenomenon, and would continue for some time, acknowledging that overall risk was lower than in 2008 but added that policy makers had fewer options for dealing with market stress. A greater concentration of important risks such as negative inflation, negative interest rates and low trade was raising systemic risks in Asia. Asian economies were subject to additional stress, due to a combination of a strong dollar, rising interest rates, lower liquidity and volatile currency markets. Alongside the economic outlook, Dr. Zhu stressed the challenge of rising populism and disparities in wealth distribution, both of which have reached levels comparable to the 1930s.

In the opening keynote speech, Professor Wang Wen, Executive Dean of the Chongyang Institute for Financial Studies at China’s Renmin University called on the built environment sector to rise to the challenge of green financing and green infrastructure set at the recent G20 Summit in Hangzhou. Professor Wang Wen stressed that GDP growth from infrastructure investment will offset the increased debt from construction spending. Across Asia, Professor Wang identified electricity generation and transport as the most significant infrastructure gaps, when compared to Germany, Japan and the US.

As an update on the progress of the ‘One Belt One Road’ initiative, Professor Wang Wen noted that by June 2016, Chinese companies had undertaken 38 large-scale transportation infrastructure projects across 26 countries, delivering 8445km of high-speed rail and 3700km of other rail lines. In the same period, China had constructed 17 hydropower projects abroad, with a total capacity of almost 10 million kilowatts. “Infrastructure has to protect the environment,” Professor Wang said, to stress the importance of evaluating risks when evaluating an infrastructure project’s financial viability. In particular he highlighted the uncertainties in estimating and realising the return on investment, geopolitical threats including political instability, conflicting legal requirements across different jurisdictions, and environmental risks.

With these risk factors in mind, Professor Wang called for the built environment sector to: make greater use of green financial tools, invest more in green infrastructure, and support multilateral cooperation on green infrastructure.

The subsequent panel discussion delved into the topic of geopolitics and the built environment, as the world is ever more connected at every level from the individual citizen through to multinational organisations and governments. To question the effects of globalisation in economies and to investigate whether these trends are transitory or lasting disruptors with lasting implications, the Summit called upon the expertise of Professor Wang Wen, Dr. Zhu Min, and Nick Brooke, Chairman, Professional Property Services Ltd.

The Summit continued with speakers on the major themes of Key Drivers for the Built Environment, Key Drivers for Real Estate, China’s One Belt One Road Policy, and Successful Cities. Amongst the extensive roster of lead speakers on infrastructure and construction as related to the built environment, were Hongbin Jiang, Director of Capital Projects & Infrastructure (CP&I), Corporate Finance, PwC China; and Zuomin Wu, General Secretary, China Engineering Cost Association (CECA) – issues discussed included technology, data/digitalisation, skills gap/NextGen, financing, and sustainability.

The discussion on Key Drivers for Real Estate was centred around workplace, FM (Strategy) and technology – with lead speakers including Dominic Thasarathar, Industry Strategist: Construction, Energy, Natural Resources, AUTODESK; and Linda Chandler, Smart Cities Lead, Microsoft Services, APAC. Key discussion points included new trends in the workspace, FM, what tenants and investors want, technology/automation, market transparency, and financing models.

The impact of the One Belt One Road Policy on the built environment and what makes a project investible, as well as the risks to delivery from an investor’s perspective. Lead speakers included Ivan Wang, Associate Partner, McKinsey; Sir Danny Alexander, Vice-president, Asian Infrastructure Investment Bank (AIIB); Chris Birdsong, Chief Executive Officer, Asia Pacific, Atkins; and Sun Weijia, Director General, International Exchanges and Cooperation, COSC. A key point for the discussion panel was how One Belt One Road will connect national and regional economies via a network of strategically-located cities. The expert panel – Rafi Rich, CEO, S.U.iT.S; Zhang Hongtao, Counsellor of the State Council, China; David Prat, Managing Director, Green Tech Water, China-Britain Business Council (CBBC); amongst others – debated the conditions needed to create the OBOR inter-city infrastructure.

The final session of the day on Successful Cities centred on how cities are increasingly looking to each other for opportunities to collaborate and share best practice, as well as how competition between cities can lead to innovation and upwards pressure to improve the quality of the built environment in order to attract major employers and a skilled workforce. The expert panel included Tom Murphy, Senior Resident Fellow, ULI and Former Mayor of Pittsburgh; Albert Chan, Director of Planning and Development, Shui On; Hungchih Liu, Senior Vice President, Strategy & Development, Greater China, AECOM; and others.

About RICS

Confidence through Professional Standards

RICS promotes and enforces the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure. Our name promises the consistent delivery of standards – bringing confidence to the markets we serve.

We accredit 125,000 professionals and any individual or firm registered with RICS is subject to our quality assurance. Their expertise covers property, asset valuation, real estate management; the development of infrastructure; and the management of natural resources, such as mining, farms and woodland. From environmental assessments and building controls to negotiating land rights in an emerging economy; if our members are involved the same professional standards and ethics apply.

We believe that standards underpin effective markets. With up to seventy per cent of the world’s wealth bound up in land and real estate, our sector is vital to economic development, helping to support stable, sustainable investment and growth around the globe.

With offices covering the major political and financial centres of the world, our market presence means we are ideally placed to influence policy and embed professional standards. We work at a cross-governmental level, delivering international standards that will support a safe and vibrant marketplace in land, real estate, construction and infrastructure, for the benefit of all.

We are proud of our reputation and work hard to protect it, so clients who work with an RICS professional can have confidence in the quality and ethics of the services they receive.

For more information, please visit: http://www.rics.org/us/about-rics/where-we-are/asia/

About the World Built Environment Forum

The World Built Environment Forum (WBEF) is a global network of professionals who create and manage the environments the world needs. It sets the standard for dialogue and cooperation that is vital for our sector. The Built Environment has become the focal point for the most pressing global issues: migration and urbanisation; housing supply and affordability; infrastructure and resilience; technology and data; climate, carbon & resource scarcity, and ultimately responsible growth.

About the Annual Summit

The Annual Summit offers a regular meeting place for the World Built Environment Forum to discuss the most pressing challenges and identify valuable solutions, as well as network with international peers. Held in a different urban hub every year, the summit looks at the built environment through a holistic lens, bringing together stakeholders from all aspects of the sector to explore common issues, how these interact across the built environment, and to build a basis for collaboration between disciplines.

Contacts

Media enquiry:
RICS East Asia Public Relations Representatives
Ms Penn Leung, 3159-2986
penn.leung@creativegp.com
or
Ms Peggy Mak, 3159-2982
peggy.mak@creativegp.com

Release Summary

‘Multilateral Co-operation is Key to Building Sustainable Infrastructure and Successful Cities in Times of Global Uncertainty’: Dr Zhu Min, Former IMF Deputy Managing Director

Contacts

Media enquiry:
RICS East Asia Public Relations Representatives
Ms Penn Leung, 3159-2986
penn.leung@creativegp.com
or
Ms Peggy Mak, 3159-2982
peggy.mak@creativegp.com