China’s Jumbo Freight Carrier Takes Flight
China Ties to Boost Vancouver: Real Estate Panel
Metro Vancouver isn’t in a real estate bubble and markets will remain stable in 2013 – as long as interest rates remain low, immigration targets are met and Europe’s economy doesn’t melt down, a panel of real estate developers told more than 1,100 real estate professionals, business leaders and B.C. politicians on Thursday.
Colin Bosa, CEO of Bosa Properties, Tony Astles, executive vice-president of Bentall Kennedy, and Eric Carlson, president and CEO of Anthem Properties provided the Urban Development Institute’s annual market forecast while Diana McMeekin, president of Artemis Marketing, moderated.
Bosa said that as long as people continue to move to British Columbia, the real estate market will remain stable.
He compared conditions in 2009 to those today and found that demand is similar, although immigration numbers were down in 2012 and two federal immigration programs – the investor program and the skilled worker program – are under review and could be subject to change.
In terms of supply, he said, more units were built in 2012 than 2009, but not many more than the 15-year average.
“The good news for all the salespeople in the room is, you’re going to sell lots of real estate this year, but the bad news is you’re going to have to work at it,” Bosa said, adding that projects near transit service will continue to sell well.
Southeast False Creek and Coquitlam Centre are two areas with a lot of unsold inventory, Bosa said. He said realtors in those areas might have to “sharpen their pencils” and that prices might decline.
However, he said Metro Vancouver condominium developers showed in 2009 that developers can “turn off the tap” quickly when the market slows.
Bosa said he believes people – and their money – from China will continue to flow into B.C. because they want to invest outside China and they want their children to grow up in North America.
“They like it in British Columbia because it’s safe and they’re accepted here,” Bosa said.
“There is a good quality of life with universal health care and good schools.”
Two things that could stop the flow of people from China in to British Columbia would be a recession or a change to Canadian immigration policy, Bosa said.
“If you buy good real estate at fair prices, you can’t go wrong,” Bosa said. “It’s not that hard.”
Carlson said B.C. and Canada were protected between 2009 and 2011 while the rest of the world was reeling from the economic crisis. Canada did not really need the extremely low interest rates as much as the rest of the world, and the low rates coupled with immigration, stimulated the housing market.
“We felt a bit smug if we were provincial in our outlook. That ended in 2012. … We started to feel the malaise for the first time,” Carlson said.
But he forecast that 2013 would be a stronger year because of B.C.’s ties to China and the U.S., which are both seeing economic recovery.
– Vancouver Sun
Advice for Canadians from CIBC’s Prentice
Further to a previous post on the subject, Canadians should heed Mr Prentice’s words.
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The Harper government’s new foreign investment rules for state-owned enterprises leave plenty of room for such companies to invest in Canada’s oil and gas sector, but investors need to consider not only the higher regulatory hurdles but an uneasy political climate, Canadian Imperial Bank of Commerce vice-chairman Jim Prentice says.
In a speech to an investors conference in Whistler, B.C., the former Conservative industry In minister also warned that Canadians need to be wary lest their uneasiness with foreign, government-controlled companies results in Canada failing to attract needed capital for jobs and growth.
In a lengthy review of the government’s new guidelines which were released last month, Mr. Prentice said they strike a reasonable balance between ensuring that important parts of the economy do not fall under the control of foreign governments, and they attract much-needed capital.
“The new rules, at the most basic level, are a positive step for our country because they recognize and declare that Canada must and will remain open for business – and that means open to foreign investment,” Mr. Prentice said in the speech delivered late Thursday.
In December, Prime Minister Stephen Harper unveiled new rules that prohibit takeovers by foreign SOEs in the oil sands, and impose greater screening on other acquisitions by such companies to ensure they operate in a market-friendly manner and will not lessen productivity in the Canadian economy. As he announced the guidelines, Mr. Harper also approved CNOOC Ltd.’s bid for Nexen Inc. and the acquisition by Malaysia-based Petronas of Progress Energy Corp.
In an interview after his speech, the former minister said he has travelled to China since the new policy was released and has found that business leaders there are confident they can do business here, including making investments in the oil sands so long as they do not seek majority positions in that sector.
“There is a recognition that while the oil sands have been carved out in terms of changes of control in terms of oil sands resources by state-owned enterprises, there will still be amply M&A activity, but subject to increased regulatory uncertainty,” he said. But even with the new uncertainty, Canada’s is perceived as a more welcoming environment that most other developed countries.
He told investors that SOEs will likely have to shift their focus from acquiring mid-cap companies to partnering with larger firms in joint ventures. An example of that kind of deal was unveiled just days after Prime Minister Stephen Harper announced the new regime, with EnCana Corp. signed a $2.2-billion joint deal with PetroChina to jointly develop unconventional, liquids-rich gas fields.
The review of significant acquisitions by SOEs “have been and will remain primarily a political question,” he said, adding Ottawa has plenty of flexibility to interpret the new rules in the most politically advantageous way. “With the stakes this high, there is always the possibility – perhaps even the likelihood – that politics are going to trump policy.”
And he noted there is “enormous public sensitivity” to the acquisitions of significant resources assets by non-western SOEs.
However the former politician had a warning for Canadians: “As highly as we regard ourselves, our resources and our businesses, the hard truth is that people will move on and look elsewhere if ever we close ourselves off to the world, And with them will go potential jobs and opportunities.”
– Globe and Mail
China’s Energy Industrial Revolution
A couple graphs in a lengthy Asia Times article caught my eye. China is reducing its energy intensity as it rapidly modernizes, according to the authors.
Figure 4 – China’s energy intensity, 1980-2008, and projected to 2050.
Source of primary data: historical energy intensity calculations based on National Bureau of Statistics of China data; energy intensity data 2010-2050 based on projections from the Energy Research Institute of China.
China, however, has been following a quite different pathway in terms of its energy intensity. In Figure 4 we plot its energy intensity since 1980, and project its energy intensity forward based on projections of researchers at China’s official Energy Research Institute. [7]
Since the growth of GDP is expected to be substantially higher than that of energy consumption in the next decades, the estimated energy intensity can be anticipated to decline quickly after 2010.
We interpret this chart to mean that China was able to accomplish the quite unprecedented feat of quadrupling GDP from 1980 to 2000 while “only” doubling energy consumption – thus accounting for the continuing decline in energy intensity (admittedly from a very inefficient starting point).
Figure 5: China: Projected carbon emissions from thermal power generation, 2000-2040
Source: Authors’ calculation.
This fifth chart tells a remarkable story. We can read off the level of CO2 emissions for 2000 (around 0.5 Gt CO2) rising to more than 3 Gt CO2 by 2010 and an anticipated level of 5.3 Gt CO2 by 2020 from conventional thermal power stations.
By integrating under the curve, we estimate that total CO2 emissions due to China’s fossil-fuel-based electric power generation over the next three decades between 2011 and 2040, would be about 140 billion tonnes.
Yes, China’s carbon emissions from electric power generation will continue to rise – but we anticipate that they will plateau in the 2020s and then start to decline – steeply, as thermal power generation declines.
For the entire article, see: http://atimes.com/atimes/China/OA26Ad01.html
CFO: Lenovo May Eye RIM for Takeover
A senior Lenovo executive said on Thursday that the Chinese computer maker may consider Research in Motion as a takeover target, sending the Blackberry maker’s shares up 2 percent just a week before it launches a make-or-break line of redesigned smartphones.
But Lenovo, which vaulted into the personal computer market with its 2005 purchase of IBM’s PC division, would face formidable hurdles if it tried to buy a company that Canadian Prime Minister Stephen Harper once described as a national “crown jewel.” The Chinese company would also encounter tough regulatory scrutiny in Washington, cybersecurity experts say.
Lenovo, on track to become the world’s largest PC maker, has held talks with RIM and its bankers about various combinations or strategic ventures, its chief financial officer, Wong Wai Ming, said on Thursday.
“We are looking at all opportunities – RIM and many others,” Wong told Bloomberg in an interview at the World Economic Forum’s annual meeting in Davos, Switzerland. “We’ll have no hesitation if the right opportunity comes along.”
A spokesman for Lenovo said Wong was asked about RIM by the Bloomberg journalist and that Wong was speaking broadly about Lenovo’s M&A strategy.
– Reuters