January 15, 2010

CHINA: Escape redefined

. LONDON, England / Financial Times / Ars & Leisure / House & Homes / January 15, 2010 By Marisa Mazria-Katz On the outskirts of China’s tropical city of Sanya, Buddha statues guard temples that exalt longevity and happiness. Here, larger than life pictures of smiling Chinese centenarians hang from the rooftops of bamboo-covered walkways connecting the temples. In the distance, a 108-metre statue of Guan Yin Buddha, about 60 metres taller than the Statue of Liberty, stands on a plinth in the South China Sea. Since the 1990s throngs of pilgrims have left mainland China and headed south to Sanya in Hainan province, in hope of reaping blessings, and longer life spans from these sanctified structures. Tourists, though, are a relatively new phenomenon. For decades Hainan Island, the province’s main land mass, was used as a place to send criminals, including politicians who broke ranks with rulers. In 1927 a communist crackdown in Shanghai forced dissidents to seek refuge on Hainan’s equatorial shores. About 10 years later the territory was invaded and occupied by the Japanese. For six years mainland refugees joined forces with the island’s native Li population and fought to regain control of the province. The beach at Da Dong Hai in the tropical city of Sanya, Hainan province, China Despite reasserting its hegemony, China’s efforts to shake off the island’s image as a hotbed for convicts and outcasts were seemingly futile until the late 1980s. Beijing detached Hainan from nearby Guangdong province’s jurisdiction so the 34,000 sq km island – about the size of the Netherlands – became its own province and a special economic zone. The strategy involved lowering taxes, developing the land and attracting investment. What ensued was a Dubai-style property explosion. People from across China flocked to Sanya’s beaches to make a fast fortune on homes that often doubled in price just weeks after purchase. But in the mid-1990s the bubble burst and scores of buildings were left unfinished. A palpable recovery started about a decade later, prompting big developers and hoteliers, such as Ritz-Carlton and Kempinski, to scoop up pristine beachfront plots in this year-round temperate city. Efforts to ensure that today’s growth avoids a 1990s-style bubble are under way. A high-speed rail link is being built that will cross the 302km between Hainan’s capital, Haikou, and Sanya. This will slash the journey time from three and a half hours to 80 minutes. In addition, a master plan unveiled in 2008 outlines growth and development initiatives set for completion between now and 2020. The city of 536,000, which is home to more than 20 ethnic groups, will see the creation of an international tourism freeport, a cruise terminal, an Olympic water sports training base and a yacht exhibition venue. Some call Sanya the Miami of China, others compare it to Hawaii but for American expatriate Mario Cavolo, Sanya, which he now calls home, is “China’s Cancún of 20 years ago”. Cavolo, a motivational speaker who runs Sanya Expat, a website to help non-natives navigate the city, first visited four years ago. “When I got here there were just a few old hotels. It was just like Cancún before [the Mexican] government invested. I looked at it and thought it was gorgeous,” says Cavolo. With translucent waters and white sands lining its edge, it’s not difficult to see why Sanya is often called a paradise. The plethora of natural treasures makes it an easy sell for estate agent Jackie Chen of the Sanya Trust Bond Real Estate Consulting Company. “Sanya is one of the hottest destinations for mainlanders,” he says. “It’s extremely relaxing, especially for those sick of big city life.” Indeed, the pace could not be more different from that in China’s big cities. Pavements are relatively empty and traffic jams are rare. Current global economic woes have yet to undermine Sanya’s growth. The hope, Chen says, is that the expanding class of wealthy Chinese, which has grown 20.3 per cent in the past two decades, “will choose Sanya as the spot for their second home or for their retirement”. The exponential rise of China’s middle and upper classes has resulted in a drastic change to Sanya’s terrain. Plots of undeveloped land are being groomed for golf course residences such as the $1.2bn Sanya Bay. Located in the city’s Haipo development zone, it occupies a total of 7 sq km. Prices for a 150 sq metre, one-bedroom villa here are RMB3m ($439,000). When completed, in roughly 10 years, Luneng will also include a yacht club, mall and hospital. A clutch of similar initiatives is in the pipeline along Sanya’s coast. Yet, for the most part, condominium towers such as the Mangrove Bay Mansion mega-development, which has taken more than 1m sq metres of land for a luxury apartment complex, are set to dominate the city’s skyline. A 67 sq metre, two-bedroom apartment at Mangrove starts at about RMB649,000. Public relations representative Stella Zhang moved to Sanya from the mainland in 2005. Even with the government’s attempt to overhaul the city’s reputation, it took a few years before colleagues back home saw her move as positive. “In the beginning, when people heard the name Sanya they basically thought it was small and not economically strong,” says Zhang. “But now their opinions are changing. There is so much growth here on every level. Because of that, this city is starting to attract people who appreciate a higher standard of living. And you can definitely find that here. This is what life in Sanya is all about.” In 2006 she purchased a 50 sq metre studio in the Hui Feng International Residence in a district known as Mountainside for RMB229,000. Today the property, which has communal gardens, swimming pools and a gym, is worth RMB478,000. Soon after his first visit, Cavolo decided to purchase a one-bedroom apartment for about RMB478,000 in the Lan Hai Garden development, a short walk from the beach in the central Da Dong Hai area. With a boardwalk and a slew of restaurants and nightlife spots, this quarter is arguably the liveliest area in Sanya. With more developments planned, Cavolo expects property values, which he says have already doubled since 2004, to rise further. In spite of the attractive returns, foreigners are still a small fraction of the investors in Sanya, mainly because mortgages are available only to natives. Those wishing to circumvent the law can do so with a Chinese co-signer or spouse. The growing tourism industry, which welcomed nearly 6m travellers in 2008, up 12.2 per cent from 2007, lured native New Zealander John Close to establish a flower and vegetable farm in Sanya. No one, not even citizens, can purchase land in China, so Close has leased 10,000 sq metres of farmland for 10 years at RMB7,375 a year. Hotels are seeking vegetables that suit the western palate, he says. “Infrastructure development and increased tourism caused me to change the thrust of what I am growing to adapt to hotel industry needs.” In the past decade Sanya has ushered in the most five-star hotels in China and last year clinched the title of the country’s top domestic travel destination. “Sanya may be growing faster then the Chinese planned,” Close says. “And it’s only going to continue to grow and get more popular. There are plans for hotels all up and down the coast. I want to make vegetables for all of them.” [rc] © Copyright The Financial Times Ltd 2010.