*Cover Photo from http://www.adamjacobsphotography.com

2019 Third Annual China – U.S. Urbanization and Redevelopment Forum

China Index Academy & Columbia School of International and Public Affairs

October 3-4, 2019

Columbia University, New York

*Cover Photo from http://www.adamjacobsphotography.com

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*Cover Photo from http://www.adamjacobsphotography.com

Table of Contents

Event Sponsors & Partners............................................................................................. 1

Opening Remarks & Keynote Speeches ....................................................................... 2

Merit E. Janow ........................................................................................................................... 2

Dean and Professor, School of International and Public Affairs, Columbia University . 2

Vincent Mo ................................................................................................................................. 2

President, China Index Academy; Founder and Chairman, Fang.com .............................. 2

Chinese Cities: Urban Form and Spatial Design .......................................................... 3

Weiping Wu, Professor and Director, Urban Planning Program Graduate School of

Planning and Preservation Columbia University .................................................................. 3

Panel I: Opportunity Zones in the U.S. – a model for real estate and economic

development ...................................................................................................................... 4

Chelsea Cruz, Associate Director, Community Development Finance, Outreach &

Education, Federal Reserve Bank of New York .................................................................... 4

Reid Thomas, Executive Vice President and General Manager, NES Financial ............... 5

Arturo Franco, Vice President, Research, Data and Insight, Mastercard Center for

Inclusive Growth ....................................................................................................................... 5

Howard W. Buffett, Adjunct Associate Professor and Research Scholar, Columbia

University ................................................................................................................................... 5

Panel II: Urban Redevelopment in China ...................................................................... 6

Hong QIN, Director of Urban Renewal Research Center, National Development and

Strategy Research Institute, Renmin University of China ................................................... 7

Yu HUANG, CEO of China Index Holdings ............................................................................ 7

Gang WANG, Secretary-General at C-REITs Alliance .......................................................... 8

Photos ................................................................................................................................ 9

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Event Sponsors & Partners

Founded in 1946, the Columbia University School of International and Public Affairs (SIPA) is the world’s largest and most global graduate school of international and public affairs. With more than 1,300 graduate students – 60 percent of whom are international – and several hundred faculty, SIPA’s mission is to educate the next generation to lead and serve in the global public interest and to create and share new knowledge on the world’s most pressing challenges. SIPA’s core fields of instruction and research cover international trade, finance and development; urban and social policy with a global perspective; international security, foreign policy and humanitarian affairs; energy, environment and sustainability; and key regions of the world. SIPA has over 75 full time faculty comprised of economists, political scientists, legal scholars and natural scientists, and a remarkable mix of scholars and practitioners. SIPA is also home to 7 research centers, and research and programs that focus on China.

China Index Academy (CIA) is one of the subsidiaries of China Index Holdings Ltd. and also the longest-running organization of China Index Holdings. CIA with its subsidiaries and branches have established the CREIS database which is a professional real estate database on land, residential and commercial real estate projects. CIA also provides the specific real estate data information, analysis reports, SaaS tools and promotional services for real estate developers, financial institutions, brokers, brokerage firms, property and upstream and downstream service companies.

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Opening Remarks & Keynote Speeches

Merit E. Janow

Dean and Professor, School of International and Public Affairs, Columbia

University Dean Merit Janow opened the 3rd Annual China – U.S. Urbanization and Redevelopment Forum by extending a warm welcome to guests and speakers from the China Index Academy and Columbia University. She expressed deep appreciation for the continued collaboration with China Index Academy to address the pressing issues related to the future of cities in the US and China. Dean Janow emphasized Columbia and SIPA’s commitment to be an open intellectual environment to students and professionals around the world and its interest in studying developments in China and areas of common learning such as urbanization, sustainability, and other areas. Dean Janow recalled the themes of the previous two years’ forums focusing on opportunities for foreign direct investment and issues in urban regeneration and civic tech participation in an urban context. She believed a focus this year on “Opportunity Zones” in the US may benefit the Chinese audience to inform lessons of how the Opportunity Zone Initiative is aimed at promoting growth and improving income equity and public health in urban areas in the US.

Vincent Mo

President, China Index Academy; Founder and Chairman, Fang.com

The keynote speech delivered by Dr. Vincent Mo presented findings of the 2019 “City Biological Age” research by the China Index Academy. The idea of the biological age of a city is inferred from the state of human development, in this case indicating the actual state of infrastructural functions of a city, in contrast to the conventional concept of the chronological age of a city. This year’s study expanded the scale based upon the evaluation system from the 2018 research by

including additional metrics indicators and compared 5 cities in China (Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou) with five cities in the U.S (NYC, Los Angeles, Chicago, San Francisco, and Washington, D.C.). The study identified that Shenzhen has the youngest biological age, while New York City has the oldest among the ten cities.

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The study also provided comparative insights on cities between China and the US in terms of residential buildings, transit systems, ecosystems, communication systems, and disaster prevention systems. Some of the major findings include: most residential buildings in the five Chinese cities were built after 2000, while most were constructed before 1960 in the US; Chinese cities have significantly newer transit and subway systems and thus perform better; Chinese cities face more severe air pollution problems than US cities; urban network speeds tend to be faster in the US, almost double the speeds in China; disaster prevention and fire emergency systems in China are lagging behind relative to the US.

Chinese Cities: Urban Form and Spatial Design

Weiping Wu, Professor and Director, Urban Planning Program Graduate School of Planning and Preservation Columbia University

From 2000 to 2010, China added 23,700 sq.km of urban land, in contrast with the added 4,800 sq.km from the rest of East Asian countries combined. This rapid expansion has resulted in mass inter-provincial migration and made some major cities popular destinations for a large volume of foreign direct investment. Interestingly, in many Chinese cities, urban construction is booming at a faster rate than population growth. As a result, urban density decreased in 370 cities in China, while most cities in East Asia Pacific are becoming more crowed. Professor Wu compared the usage of industrial land in cities in the context of urbanization. Cities in a transition economy, such as Shanghai and Tianjin, have a higher percentage of industrial land compared to cities with a land market tradition, such as London and Paris. Professor Wu also explained China’s infrastructure financing in a global context by comparing it with both industrialized countries and other developing countries. Last but not least, Professor Wu discussed the unique presence of super blocks in Chinese cities. She noted that the monotonous land use within super blocks tends to be

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less pedestrian friendly and creates disconnections between land use and public transit. Drawing lessons from Barcelona, Chongqing, and Yunnan, Professor Wu demonstrated how to create more pedestrian-friendly blocks and more transit-oriented development models by increasing street network density.

Panel I: Opportunity Zones in the U.S. – a model for real estate and economic development

This panel presented workshop participants with the concept of Opportunity Zones (OZs) in the United States, including their purpose and how investors, developers, the government, and other actors, such as universities, can participate in the development of OZs. The panel included a brief look into how the impact of OZs – social, environmental, economic – can be assessed and reported to stakeholders.

Chelsea Cruz, Associate Director, Community Development Finance, Outreach & Education, Federal Reserve Bank of New York Ms. Cruz first provided an overview of the Investing in Opportunity Zones Act and then discussed issues related to the qualifications as an OZ, capital use and investment examples of the Opportunity Zone Funds, guidance offered by Treasury and IRA, as well as the rationale for building the OZ Impact Reporting Framework.

Ms. Cruz highlighted the New York Fed’s commitment to collaboration with all stakeholders to achieve the goal of economic development in OZs to ensure that investments result in meaningful and inclusive public benefits. An effective OZ framework should focus on transparency, authentic community engagement, expanding the conversation, and learning over time. She also emphasized the importance of two-way

From left to right, Arturo Franco, Thomas Reid, Chelsea Cruz, and Howard W. Buffett during Panel Discussion I.

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education between the communities and investors, trusted intermediaries and data reporting in OZ investment.

Reid Thomas, Executive Vice President and General Manager, NES Financial Mr. Thomas’s presentation outlined the mission of NES in helping OZs achieve what he saw as transformative potential and in assisting well intended investment programs to succeed in doing the good that they are intended to do. NES Financial is a Silicon Valley headquartered Fintech company with 15 years of specialty financial administration leadership. NES Financial provides purpose-built OZ tracking and reporting on financial, tax and impact, treasury management on controls and audit trails, as well as third party fund administration on accounting and investor services. Mr. Thomas outlined three main motivations behind investing in OZ funds: tax exemption, financial return, and social impact. He noted that social impact is the most important factor in measuring the success of OZs as it can be used to measure global phenomenon, and the real estate sector will lead the current day vast investment projects. He believed that OZ funding will continue to rise in the near future.

Arturo Franco, Vice President, Research, Data and Insight, Mastercard Center for Inclusive Growth

During the presentation, Mr. Franco discussed two parallel tracks led by Mastercard to address the need for development insights for local economic development, particularly in the context of OZs. The tracks aim to inform the communities about the OZs and to measure the effectiveness of OZs through community engagement, and thus create more viable programs. From experiences of community leaders to national

policy makers, Mastercard learned that there is high demand for timely and granular data and access to such data is key to effective location-based policy decisions.

Howard W. Buffett, Adjunct Associate Professor and Research Scholar, Columbia University

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Professor Buffett’s presentation focused on three areas crucial to the success of OZs: important momentum in the OZ market, how universities can act as anchor institutions, and impact measurement and reporting. He noted that there has been both uncertainties and positive developments in the OZ market. While many people are concerned about the lack of federal guidance related to OZs and fear that OZs may not lead to the type of social impact intended by the legislation, there have been numerous fund managers, projects, and other organizations that have indicated a distinctive commitment to community engagement and positive social impact. Professor Buffett pointed out that, as an educational institute, Columbia SIPA can contribute to the OZ success in five ways: 1. convene both local and national groups across sectors around the subject; 2. encourage OZ investors to focus on long-term social and economic goals; 3. contribute research and data for OZ evaluators, funds and communities; 4. deploy the use of University assets with OZs (real estate, endowment, etc.) or support local entrepreneurship; 5. help OZ collaborators develop appropriately rigorous impact measurement approaches.

Panel II: Urban Redevelopment in China

This panel introduced to workshop participants the concept of urban renewal in China, background of urban renewal development, relevant policy support systems, as well as the enormous potential for future development. The panel focused on case studies to analyze how urban renewal contributes to maintaining city’s youthfulness and inform the participants of the practice of urban renewal in China.

From left to right, Gang Wang, Yu Huang, Hong Qin, and Xing Chen (Moderator) during Panel Discussion II.

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Hong QIN, Director of Urban Renewal Research Center, National Development and Strategy Research Institute, Renmin University of China Professor Qin’s presentation focused on the practice of urban renewal in China. China has gone through rapid urban development during the past two decades and the population of rural and urban broke even in 2010. She highlighted the necessity for industrial structural adjustments in major Chinese cities in response to the rapid urban population growth. In Beijing, for example, the share of the service industry in gross city product grew from 62.11% in 2003 to 81% in 2018, while the primary industry and secondary industry share reduced from 2.56% to 0.4% and from 35.33% to 18.6%, respectively.

Starting in 2014, the priority of urban renewal policy in China has shifted from expansion development to intensive development. The National New Urbanization Planning (2014 – 2020) policy stressed the control of the urban development boundary and the promotion of the compact development. Local governments in Shanghai, Guangzhou, and Shenzhen have all passed the legislation to promote the implementation of urban renewal measures.

Professor Qin noted that urban renewal has also become a hot topic in the capital market. An increasing number of real estate developers, investment institutions, and real estate funds have started to integrate industrial resources to set up urban renewal funds to upgrade, rejuvenate and rebuild the urban stock assets, so as to realize the enhancement of asset value.

Yu HUANG, CEO of China Index Holdings During the presentation, Ms. Huang used Shenzhen as a case study to demonstrate how urban renewal rejuvenates large cities in China and has helped Shenzhen build a demonstration pilot zone of economic development. The development of Shenzhen was restricted by its limited land resources and outdated urban planning. Through years of effort in retrofitting the old city areas and making urban renewal on top policy priority, Shenzhen’s urban renewal has come into a stage of comprehensive development, keeping its economic growth at a high rate. China Index Academy’s 2019 “City Biological Age” Research identified Shenzhen as the most youthful city in 2019 out of the 10 cities evaluated, particularly in terms of the city’s construction and population. Renovation of old villages, industrial districts, residential districts, and commercial districts in Shenzhen have enabled a breakthrough for urban rejuvenation by attracting a younger

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population, economic growth and modern infrastructure. Ms. Huang cited multiple examples of urban renewal from Futian and Yantian districts in Shenzhen, including the upgrading of a low-end furniture warehouse into a high-end business center, the renovation of an urban village (Gangxia Village) into a metropolitan center, and the renewal of old residential areas into modern communities.

Gang WANG, Secretary-General at C-REITs Alliance Mr. Wang’s presentation offered an overview of the current status and outlook of Real Estate Investment Trusts (REIT)s in China. He believed that the real estate industry has entered the next stage in China, and Private Equity Real Estate (PERE) and REITs will dominate China’s real estate market in the near future. Mr. Wang noted that although the sale of commercial housing in China is slightly larger than that of the US, the scale of REIT-like products is significantly smaller in China while the potential market demand is vast.

Mr. Wang compared the differences between equity REITs and REIT-like products in terms of investor range, investment term, negotiability, income distribution, stratification, and sources of revenue. He provided insights on the organizational form and management models of REITs in different countries/regions, including Japan, Singapore, Hongkong, China, and the US. Regarding the development steps of REITs in China, Mr. Wang

commented that the current priority is to solve issues related to public offerings, and the next step should focus on equity fund issues and, finally, tax issues.

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Photos

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