Update
It is four weeks since I posted an entry. It is now nearly two weeks since I returned from China.
I have had a lot to do since getting back. We are still operating without Lua, which means that we are that much more stretched. The UK property rental market continues to be slow, but tenants give notice, new tenants have to be found, students come to the end of their academic year, washing machines fail, and so do shower pumps. The odd tenant needs to be evicted.
My visit to China, which seems a long time ago, was educational. My thinking on the place changed in a number of ways. First, I became less convinced about the high-end market. It is true that very rich Chinese, Taiwanese, Macanese and Hong Kongers are buying to Zhuhai, and to some extent moving there. It is true that in common with very many societies, China is becoming more unequal, which, in a time of rapidly increasing GDP per capita, means that many very rich consumers are being created, especially in the Pearl River Delta area. However, there is a large supply of property coming onto the market, and a large proportion of apartments of this type, in builds as old as five years, have never been occupied. This feels very bubble-like. I remain sanguine about the more mainstream apartments that ordinary local office workers and managers can realistically aspire to rent and buy.
I became even more bullish about Hong Kong. The recent price performance and severe constraints on supply, together with the low funding costs courtesy of Ben Bernanke outweigh, in my opinion, the 'everybody is moving to China' argument. Location is critical in Hong Kong, because transport in the very centre is poor and, currently, all the big international employers are based there. There are big cultural problems about relocating big banks to cheaper locations, and I am confident that the Central area of Hong Kong, especially 'mid levels near the escalator' and 'west Soho' will be expensive for a very long time to come.
I am working with some guys at China Direct Partners with a view to working with large UK and European developers to source materials and supplies direct from a network of factories in China. China Direct Partners are in the business of Direct Global Procurement: i.e. they work with companies to extend their supply chain beyond the traditional national boundaries and bypassing distributors. Although the product are tiles and curtain walls, the tools are a sophisticated computer system all accessible to clients, factories and freight forwarders through a web interface. I am very excited by this new development.
I have acquired a cheap second hand Blackberry. These strange devices are no longer a mystery to me. It has required some dedicated problem solving on my part to get the set of google mobile tools working on a blackberry - including google sync, google mail and google maps, but I have managed it. I am on a very good data bundle deal with Yes Telecomm, which I recommend.
