Entering into 2013, the global economy continued to face uncertainties. European economies stagnated with no sign of recovery while the United States was still on a bumpy road of economic recovery. At the start of the year, a series of economic stimulus measures implemented by the Japanese Government have once offered a ray of hope to the market but their effectiveness was doubted by the market afterwards. In addition, the Federal Reserve Board of the United States signalled the timetable of phasing out quantitative easing, triggering capital outflow from the emerging markets and significant fluctuations in global financial markets in the second quarter. Under the influence of decreasing external demand and the intention of new Chinese leaders to maintain sustainable economic development through long-term reform instead of shortterm stimulus polices, the economic growth of Mainland China showed signs of slowing down. According to the data provided by National Bureau of Statistics of China, the year-on-year growth in GDP in the first quarter and second quarter of 2013 were 7.7% and 7.5% respectively. The pace of growth started to decelerate but could still fulfil the targeted growth rate of 7.5% set by the Central Government. The weak external demand increased pressure on the manufacturing and export industries of China, and increased the downside risk of China's economy. In response to this, both International Monetary Fund and HSBC have downgraded their forecasts on economic growth of Mainland China where HSBC adjusted downward the GDP growth of Mainland China in 2013 and 2014 from 8.2 % and 8.4% to the same level of 7.4%.
Currently, the Central Government adheres to the general approach of pursuing growth amidst stability and focuses on enhancing the quality and efficiency of economic development. In view of this, the Central Government continues to implement active fiscal policies and prudent monetary policies while strengthening and improving the macroeconomic control measures with a view to stemming excessive credit and production capacity as well as laying a solid foundation for the long-term economic development. Under the "Twelfth Five Year Plan", service sector is positioned as the core industry for creating employment opportunities, and urbanisation will also be on top of the agenda of the Central Government in the forthcoming future. The active promotion of urbanisation and development of service sector are favourable for turning domestic consumption into the new economic growth driver, which will ultimately lead to the achievement of the objective of promoting a stable and healthy growth of property market.
Since 2011, the Central Government implemented control measures on property market, among which "purchase restriction" and "mortgage tightening" effectively curbed investment and speculative housing demand. However, Mainland China's property market control has not passed the critical stage at this moment. Under the continued loose monetary environment, the investment demand prevents the drop in property prices, which makes the general increase in housing prices continue despite the implementation of control measures. With the purpose of promoting the stable and healthy development of property market, Wen Jiabao, the then Premier of the State Council rolled out five measures to strengthen the control on property market (or "The New Five Directives") in the State Council's executive meeting chaired by him in February 2013. During the meeting, it is reiterated that not only will the Central Government insist on the implementation of control policies focusing on "purchase restriction" and "mortgage tightening" and crack down on investment and speculative demand resolutely, but will also require local governments to formulate and announce the annual price control targets of newly built commodity housing. Thereafter, major cities announced their local rules of "The New Five Directives" successively. With the exception of some cities where measures are considered to be comparatively stringent by the market, the measures implemented in the vast majority of cities are relatively moderate.
On the other hand, the Central Government also speeds up the planning and construction of affordable housing programme. The goal is to complete the construction of 4.7 million units of affordable houses in urban areas and commence new construction of 6.3 million units in 2013. In order to ensure the safety standard of the construction, the Central Government will strengthen the planning, design and quality of the construction. Besides, the Central Government clearly stated that the establishment of the Personal Housing Information System had to be accelerated in various cities. In principle, every city at municipality level or above has to complete the establishment of Housing Information System by the end of the period of the "Twelfth Five-year" to strengthen market regulation and to be alert against market risks.
The foundation of the business development of the Group is well established as NWCL has extensive experience in property development in Mainland China and an excellent management team which always grasps market opportunities. The Group aligns itself with the development strategy of China and actively satisfies the rigid demand for self-occupation and improved accommodation. Apart from offering products which cater to the needs of mass public, the Group also focuses on developing mid- and high-end products with high-quality and multifunction and improves the standard of ancillary services. To satisfy the everincreasing housing demand of middle- and high income classes in Mainland China, the Group is dedicated to create a green environment and to actively promote a healthy and environmentally-friendly lifestyle. The excellent products of the Group have been popular among the users over the years, which enables the Group to build a nationwide brand with sound reputation and to gain widespread market recognition.
Dr Cheng Kar-shun, Henry
Chairman and Managing Director
Hong Kong, 25 September 2013